GPs face pension cost hike as DH shifts £35m admin bill to providers

GP practices face a rise in the employers contribution they pay towards NHS pensions from next April under DH plans to transfer the £35m cost of administering the pensions scheme to providers.

GPC pensions committee chair Dr David Bailey (Photo: Ray Farley)
GPC pensions committee chair Dr David Bailey (Photo: Ray Farley)

A consultation published by the DH says administering the NHS pension scheme will cost £35m a year for the next two years, and that it is 'no longer appropriate' for this cost to be met centrally.

In line with a similar process that will see GP practices' CQC fees rise seven-fold over two years by 2017, the DH plans to shift the costs to employers.

Divided by the 1.5m members of the scheme the £35m annual administration cost is equivalent to '0.08% of a member's annual pensionable earnings', the document says.

The consultation says the favoured method of collecting the funds is to raise employer contributions. 'The most administratively simple way to collect the levy is to add it to the monthly standard employer contribution rather than require separate payment,' it says. 'For instance the current rate of 14.3% would be increased marginally to 14.38% to collect a levy of 0.08%.'

GP funding

GPC pensions committee chair Dr David Bailey told GPonline that GP leaders would demand full reimbursement of the increase costs for practices.

It was 'very much official policy' increasingly to transfer costs to NHS provider organisations, he said, warning that small providers like GPs - which are unable to increase income by raising prices - were simply unable to absorb these increased cost pressures.

'It is likely to be part of the employer contribution,' he said. 'I expect it to be fully reimbursed, but the risk is they will stop reimbursing that and they will expect us to consume our own smoke.

'We are small providers who can't raise prices - that is one of the reasons why general practice is on its knees at the moment.'

Although the costs to each practice would be likely just a few hundred pounds, he said it was 'still an unavoidable extra cost' that would take hundreds of thousands or even millions of pounds out of general practice nationally.

Dr Bailey said the GPC planned to factor this cost into ongoing GP contract negotiations over an unavoidable expenses uplift for the profession.

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