The DDRB calculated a 1.34 per cent investment would bring 'no net pay rise for GPs' but allow them to maintain income as expenses rise. But ministers cut the award to 0.8 per cent for GMS practices, saying they should cut expenses by 1 per cent to maintain their income.
Laurence Slavin, a partner at specialist medical accountants Ramsay Brown and Partners, said it was a 'flight of fancy' to think GPs could find 1 per cent savings in their expenses.
He said practice profits were likely to fall by between 5 and 7 per cent in 2010/11, in line with the trend in recent years.
Average GMS profit per partner could drop by around £8,000, he said.
'GPs have faced no pay rise since 2005 and since then have looked at their expenses to maintain profits.
'The problem facing GPs is that they are having to work harder and spend more money to maintain their performance.'
He said QOF and patient survey targets had brought higher administration and staff costs.
'I suspect it will be almost impossible for GPs to absorb that without freezing staff pay (again) and either cutting profits or services,' he warned.
GPC chairman Dr Laurence Buckman said the pay deal was 'effectively a cut'. 'Some practices will have to look at staffing levels,' he said.
'Absolutely zero practices will attempt to find this efficiency. Let's be clear, an efficiency saving means a cut. Nobody really believes it's anything else.'
The formula to distribute the 0.8 per cent pay rise was not yet agreed but would inevitably be 'very complicated' this year, he added.
If last year's 'iterative' funding formula is used again, practices will receive differential uplifts, with non-MPIG practices receiving more than those with high correction factors.
England's health secretary Andy Burnham said the pay uplifts were 'a good deal for the government and the NHS'.