Practices 'need overdrafts to counter falling profits'

Practices struggling with falling profits should consider taking out overdrafts and slashing staff costs, medical accountants have warned.

Bob Senior, a director at Tenon Financial Services, told the Primary Care Live conference in London this month that growing inflation and the pay freeze would hit profits at least into next year.

'At the moment it's hard to see how most GPs' profits can be sustained and why they should not fall by 3-4 per cent a year,' Mr Senior said.

Practice managers 'need to make sure they either warn their partners that their drawings might dry up, or put an overdraft facility in place. Possibly both,' he said.

Mr Senior said that practices trying to cut costs often focus on bills and equipment, but staff salaries account for more than half of their spending. Accountants warned last month that dispensing practices were being forced to cut staff (GP, 19 September).

Mr Senior urged practices to make better use of their assets, for example by 'hot desking', rather than reserving consultation rooms for specific doctors.

He also warned them not to rely on practice-based commissioning to generate extra income.

'Don't expect it to be there in perpetuity,' he said. 'I personally would not be putting £100,000 into these new structures.'

jonn.elledge@haymarket.com

Comment below and tell us what you think

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register

Already registered?

Sign in

Follow Us:

Just published

UK COVID-19 vaccination programme tracker

UK COVID-19 vaccination programme tracker

GPs across the UK are playing a leading role in the largest-ever NHS vaccination...

GP-led sites behind almost three quarters of COVID-19 jabs in England

GP-led sites behind almost three quarters of COVID-19 jabs in England

GP-led vaccination sites have delivered nearly three quarters of COVID-19 vaccine...

GPs should ignore calls to throw away usable COVID-19 vaccine, says RCGP

GPs should ignore calls to throw away usable COVID-19 vaccine, says RCGP

Suggestions that vaccination sites should throw away usable doses of COVID-19 vaccine...

GPs urged to use influence to dispel COVID-19 vaccine myths and boost BAME uptake

GPs urged to use influence to dispel COVID-19 vaccine myths and boost BAME uptake

GPs have been encouraged to use their ‘huge influence’ to bust misinformation around...

Six in 10 over-80s vaccinated against COVID-19 as figures expose regional variation

Six in 10 over-80s vaccinated against COVID-19 as figures expose regional variation

Six in 10 people aged over 80 in England received a first dose of COVID-19 vaccine...

Summary of changes to the GP contract 2021/22

Summary of changes to the GP contract 2021/22

The BMA and NHS England have agreed minor changes to the GP contract for 2021/22....