Pay rise will not stem falling profits

The 2.29 per cent funding uplift proposed by the Doctors' and Dentists' Review Body will not arrest the decline in practice profits, experts have warned.

The Review Body advice, which has been approved by all four UK governments, said that the gross funding rise would boost net income by 1.5 per cent.

However, most practices will not receive the full increase because the complex allocation formula favours those with little or no correction factor.

The 2.29 per cent rise means some practices could see core pay increase by more than 10 per cent. The BMA estimated earlier this year that non-MPIG practices would receive core pay rises of up to 8 per cent from a 2 per cent deal. Other estimates put this as high as 11 per cent.

The review body report in figures

Recommended increase in gross income
0.77% Minimum uplift in global sum that practices will receive
8%+ Potential uplift for practices without MPIG
2.53% Recommended increase for practice staff pay
91% Practices currently on MPIG

Source: Doctors' and Dentists' Review Body, BMA

But practices with large correction factors will receive a minimum uplift of just 0.7 per cent. Such an increase is likely to be wiped out by ballooning practice expenses.

Bob Senior, an accountant with Tenon, said these practices would face 'a choice of taking a profit cut or slashing services'.

'This increase might stop the drop in profits being too painful, but it's hard to see how it's going to improve them,' he said. As a result, 'practices are moving maintaining their profits up their own agenda'.

Dr David Jenner, GMS contract lead at the NHS Alliance, said factors such as lost local enhanced services could cancel out the uplift at many practices.

'We are near the stage where the majority of GPs will have to think about cutting services and staff - things they have talked about but not done,' he said.

The BMA estimates that net income fell by 8 per cent between 2006/7 and 2008/9.

Jon Ford, head of the BMA's health policy and economic research unit, said the pay deal would increase gross resources for most practices. 'There is quite a lot to be grateful for.'

GPC chairman Dr Laurence Buckman welcomed the recognition that partners deserve the same rise as other doctors.

As GP went to press, the GPC was awaiting accounts for the last quarter, so that it can write to practices explaining how the changes will affect them.

Other recommendations by the Review Body include:

  • GP registrar supplement cut from 50 to 45 per cent;
  • Increase salaried GP pay range by 1.5 per cent;
  • Increase GP trainer grant and educator pay scale by 1.5 per cent.

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