Exclusive: Government admits that GP earnings estimate is wrong

The NHS agency that reported GP earnings growth of 30 per cent in 2004/5 to £106,000 on average has admitted its findings are flawed, after concerns were highlighted by GP newspaper.

Hamish Meldrum
Hamish Meldrum

The figure is likely to have been inflated artificially by superannuation payments after changes to accounting rules and GP pension payments under the new GMS contract.

NHS pensions include a 14 per cent contribution from the employer, and 6 per cent from employees.

Prior to the new contract, health authorities paid the 14 per cent directly, but now the funding is included in practice income and is paid out by GPs themselves in addition to the employee contribution. The full 20 per cent is to be included on tax returns as a personal pension contribution.

A spokeswoman for the Information Centre for Health and Social Care, which published the figures, told GP: ‘The analysis did not take account of the changes in GPs’ contributions to their own pensions resulting from their new contracts.’

She said the organisation ‘regrets the omission’ and would begin work with HM Customs and Revenue (HMRC) statisticians immediately to revise earnings statistics.

‘We recognise that more work is now needed to quantify the im-pact of this change on overall earnings,’ the spokeswoman said.

GPC chairman Dr Hamish Meldrum said: ‘The error means the average GP pay for 2004/5 is well below £100,000, not the six-figure income as reported. It also means the percentage rise in pay is substantially below the 32 per cent claimed by the government.’

However, the error was not picked up by a technical steering committee comprising representatives from the BMA, NHS

Employers and the four UK health departments, which approved the earnings statistics for publication.

Several accountants reported concerns this week that employers’ superannuation contributions are inflating the pay figures (GP 8 December 2006).

They said HMRC data used to calculate GP earnings for 2004/5 did not differentiate between tax returns that included employers’ superannuation and those that did not. Variation in accountants’ approach to filling in tax returns that year is likely because Inland Revenue rules changed part way through the tax year.

nick.bostock@haymarket.com

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