This year’s GP contract carries considerable financial risk. Accountant Kay Botley explains how practices can plan ahead and stay financially resilient
The announcement of the GP contract for 2026/2027 requires careful financial planning by practices. Following unsuccessful contract talks between GPC England and the Government and a lack of assurances, collective GP practice action began last month, encouraged by the BMA and targeting Data Sharing Agreements (DSA).
What are the main financial changes set out in the latest contract and how can practices ensure they maintain financial stability while meeting the contract’s requirements?
1. Model the funding changes and real-terms implications
The new contract includes a 3.6% cash uplift to the core GP contract, equating to around £485 million nationally and incorporating a 3.5% pay assumption. Despite this, many practices remain cautious about the real-term impact.
Compared with wider NHS funding growth and ongoing inflationary pressures, the uplift may not fully offset rising operating costs. Notably, the 3.5% pay assumption falls below recent National Minimum Wage increases and applies to only a portion of the contract sum, with practices still responsible for employer national insurance and pension contributions. The impact on cash flow and budgets will therefore vary depending on staffing structures.
Staffing costs remain the largest expenditure for most practices, and even small increases in salaries, pensions, or employer national insurance can significantly affect cash reserves over a year. Accurate financial planning, including rolling budgets and cash flow forecasting, is essential to model the effects of changing costs and income throughout the year.
Scenario planning further helps assess affordability under different assumptions, such as funding shortfalls, increased locum costs, or fluctuating patient demand.
2. Review workforce plans
The contract introduces changes to funding streams supporting GP recruitment and workforce capacity. PCN-level Capacity and Access Payment funds have been redirected into a practice-level reimbursement scheme worth £292 million, aimed at recruiting additional GPs or increasing sessions for existing staff. Restrictions on the Additional Roles Reimbursement Scheme (ARRS) have also been relaxed, giving practices more flexibility in allocating funds.
However, details released in the updated Statement of Financial Entitlements raised concerns, particularly for practices in deprived areas. Practice level reimbursements are limited to additional salaried GP sessions and exclude work by partners. It was initially thought locums were also excluded though there has since been clarification from NHS England that locums GPs can be funded via the new scheme, as long as they hold an employment contract for the additional sessions.
Concerns remain that the scheme may proves less advantageous for practices in deprived areas, where it can be a struggle to recruit. There is also no guarantee this funding will continue beyond 31 March 2027, and claims must be made within a narrow three-month window via CQRS, creating potential cash flow challenges.
Practices able to recruit should continue reviewing operational efficiencies alongside workforce plans, considering role redistribution, cross-skilling opportunities, and technology solutions to reduce administrative burden.
3. Forecast for increased operational demands to ensure sustainability
The contract places additional emphasis on patient access targets, requiring quicker responses to requests and accountability for same-day triage and next-working-day updates. While these changes aim to improve access, they create operational and financial challenges amid workforce shortages and rising demand.
Additional service expectations can strain staffing budgets, overtime costs, and resource allocation. Accurate financial forecasting and performance monitoring are therefore critical to balance service delivery with sustainability.
4. Strengthen financial systems
Strong financial systems are increasingly essential. Modern cloud-based accounting software provides real-time visibility of income, expenditure, and cash flow, supporting faster, informed decision-making. Integrated systems reduce manual administration and improve reporting accuracy, while automation streamlines processes such as invoice approvals, payroll reconciliation, and expense tracking.
Regular management reporting should compare actual performance against budgets and forecasts, with variances investigated promptly to prevent escalation. Reliable financial systems also support scenario planning, allowing leadership to model funding assumptions, recruitment plans, and cost pressures before committing to decisions.
Rolling budgets allow organisations to continuously reassess their expected financial position by extending the forecasting period each month or quarter. This creates greater visibility over future cash requirements and allows management teams to react quickly to cost increases, funding delays or operational changes before they become larger financial issues.
Similarly, detailed cash flow forecasting is becoming increasingly important across healthcare organisations. A profitable organisation can still experience financial difficulty if cash inflows and outflows are poorly timed. Forecasting cash flow over at least a 12-month period enables practices to identify pinch points in advance, manage working capital effectively and make informed decisions around recruitment, investment and expenditure.
In an increasingly challenging healthcare environment, practices that combine robust financial processes, accurate forecasting, and operational oversight will be better positioned to manage uncertainty, maintain financial resilience, and make confident long-term decisions.
The 2026/2027 GP contract underscores the importance of these measures, ensuring practices can meet new access demands while safeguarding financial stability.
Kay Botley is head of healthcare at Duncan & Toplis
