Exclusive: GPC bid to take half of practice funding out of Carr-Hill formula

Half of practice funding could be removed from formula weighting if the GPC gets its way in imminent contract negotiations.

Funding for staff should not be subject to the formula (Photo: SPL)
Funding for staff should not be subject to the formula (Photo: SPL)

GP leaders want to overhaul the funding formula, which can create two-thirds differences in funding
between practices with similar population sizes.

GPC chairman Dr Chaand Nagpaul told GP it was not right that funding for fixed practice costs, such as staffing and administration, and money recycled from scrapped QOF points and enhanced services, should be subject to formula weighting.

The GPC believes allocating all practice core income through the Carr-Hill formula, which weights it according to the profile of patient lists, exaggerates disparities.

NHS England is reviewing the formula and hopes to introduce a deprivation factor into weighting from 2015/16. But the GPC believes it must push for a much wider-ranging reform of core funding when negotiations begin shortly for next year’s GP contract.

‘There is considerable work in practices that does not relate to the Carr-Hill formula,’ Dr Nagpaul said.

Fixed costs of running a practice, he argued, are not related to the formula weighting factors.

‘By applying the formula to the entire practice budget, we are seeing huge variation in weighting, resulting in practices with similar population sizes receiving widely varying levels of funding,’ he said.

‘We think that having a fixed, non-weighted – or off-formula – [funding stream] would narrow the spectrum and be more reflective of the similarities between practices.’

Two recent changes to GP funding highlighted problems with the formula. Recycling of funds from scrapped QOF points and enhanced services in the 2014/15 contract created winners and losers as the money was redistributed through Carr-Hill. The GPC said those funds should have been delivered off-formula.

Dr Nagpaul said that after the last contract, you could have had two practices earning £100,000 from the QOF, which when reinvested through Carr-Hill delivered £75,000 to one and £125,000 to the other, ‘for money that has nothing to do with the formula’.

The GPC believes the MPIG withdrawal has also highlighted funding disparities caused by the formula.

Dr Nagpaul will ask the BMA policy unit to calculate the proportion of practice costs which are fixed and should not be paid through the formula. Asked if that would be as much as 50%, he said: ‘I’m guessing about that. It would be substantial.’

He added: ‘It is something we will propose to NHS England and we think this is the time to do this.’

At the LMCs conference last month, GPs urged the government to ensure reviews to funding formulae reflect the needs and circumstances of local populations.

GPC deputy chairman Dr Richard Vautrey told GP that any new formula should better reflect the needs of populations with high inequalities.

He said the GPC would look for a mechanism to protect practices serving vulnerable populations,
such as homeless people, which cannot work under a national funding formula.

Free GMS financial forecast

Medeconomics has teamed up with specialist medical accountants to produce individual forecasts of practice financial performance as the MPIG is phased out.

View a sample report here

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