After three years of successive income freezes, GPs are having to cut rewards for the work their staff do to improve patient care.
A recent survey by First Practice Management has shown practice managers' bonuses plummeting by 17 per cent, having already fallen by 16 per cent last year.
The average UK practice manager's total income rose by 1.5 per cent this year, including a basic salary increase of just over 2 per cent, despite no rise in practice income.
Steve Morris, who analysed and collated the survey for First Practice Management, said: 'A real slow-down in income has been noticed this year.
'In particular, the number of practices not paying a quality framework or other performance bonus to managers has risen markedly, from 55 per cent of practices last year to 61 per cent this year - an important indicator that the financial squeeze on practices is beginning to bite.'
In Wales, over 75 per cent of practice managers did not receive any bonus at all this year. The area also had the highest number of practice managers in the lowest bonus tier - less than £1,500.
These results will cause concern among GPs and practice managers that there is not enough money to go around in primary care to reward staff adequately.
GPs will also wonder how they can continue to fund staff pay rises, despite having no rise in practice income.
'This is coupled with a period where GPs, managers and their staff are having to work harder and harder to maintain the status quo in terms of income and patient care by engaging in directed and local enhanced service initiatives, like extended opening, and practice-based commissioning,' said Mr Morris.
GPC negotiator Dr Peter Holden said the figures came as no surprise as practice profitability falls.
'What we are seeing are the consequences of three years of de-funding of general practice. You can't pay bonuses when you can't keep up yourself.'
Dr Holden estimates that practice profitability will drop by between 3 per cent and 5 per cent this year.
To stop staff wages eating into practice profits, GPs need more net income and less work-related pay, he said.
'GPs have to start looking at net income and stop being busy fools. GPs can get obsessed with increasing turnover rather than profits. 'We need to be more precise about what we mean by a pay rise.'
Dr Holden said the morale of practice managers and GPs was being affected. 'If we are not getting resources that even match inflation, and all your staff have had a pay rise and you haven't, it only takes a few years and that is a drastic pay cut.'
Mr Morris said many comments accompanying the survey suggested practice managers were not aggrieved about getting less of the practice profits.
'It's a mixed bag. Many will be making recommendations on bonuses to the partners having been in charge of the practice's finances. But there is a great deal of realism. Most know what is affordable.'
The recent cuts to correction factors suggest that for any practice on the MPIG, the pay freeze is likely to continue for years to come, even if more money is pumped into the global sum.
Practice managers' 16 per cent drop in bonuses last year was masked by a basic salary rise of over 5 per cent. This year it is just 2 per cent. Could next year see practice managers' salaries frozen too?
'It will continue to eat into overall income but there is no indication it will start to eat into salaries,' said Mr Morris.
'In 2007 the bonus was 2.7 per cent of overall income. In 2008 it is 2.2 per cent. The loss of a bonus can be quite substantial but hopefully it shouldn't affect basic salary yet.'
Practice managers in Greater London appear to be doing well, and have the largest salaries - over 45 per cent of respondents were earning over £40,000, despite the prevalence of smaller surgeries in the capital.
In smaller practices (less than 5,000 patients), the average UK practice manager income is now £29,875 (£29,500 in 2007), and for the very largest practices, with over 14,000 patients, the average is £44,225 (£41,800 in 2007).
The survey, completed by 1,355 practice managers, represents over 15 per cent of the UK work force, said Mr Morris.
'In the first few years, the lack of pay rise hadn't taken effect - the quality framework was a new income staff shared generously,' he said.
'There is a real desire by GP partners to properly reward and pay staff for their efforts. However, the reality in many cases is that there is no bottomless pot.'
What do GPs think?
We haven't cut back on staff because it's not fair. Every April we go up with inflation and add a bit more. We are a happy practice. Our practice manager gets a large quality framework bonus.
Dr Clarissa Fabre, Uckfield, Sussex
We do give bonuses every year despite the pay freeze. We have always achieved highly straight from the start and its all down to our wonderful staff.
Dr Anita Sharma, GP in Oldham
We decided to honour the Agenda for Change pay award this year because obviously we value our staff.
We haven't offered any bonuses this year because we've seen a drop in our pay. Things are getting increasingly difficult.
Dr Beth McCarron Nash, GPC negotiator and GP, Honiton, Devon
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