A detailed analysis of the 2018/19 GMS contract has led accountants to predict that practices in England with static list sizes are likely to see a lower increase in funds than the 3.4% announced by NHS Employers on 20 March.

Luke Bennett, a director of the Association of Independent Specialist Medical Accountants, said: “0.8% of the investment is to allow for the predicted increase in the population. Therefore, a practice with a static list size might reasonably expect an increase of not 3.4%, but 2.6%.”

Mr Bennett, a partner at accountancy firm PKF Francis Clark, said that funding increases will depend on practices’ individual characteristics and sources of income since different increases will be applied to different income streams.

He added: “Practices will have to fund increases in expenses out of the increased income. Significantly, the NHS pay deal agreed by union leaders and ministers on 21 March is likely to lead to increases in staff salaries, particularly at the lower end of the pay scales.”

“While most practices are not contractually bound by the Agenda for Change pay rates, they are in many cases competing with secondary care to attract staff.”

Mr Bennett added: “All practices will see some sort of increase in funding and this is to be welcomed as a measure to help maintain financial stability for struggling practices. There may be a further uplift in funding once the Doctors’ and Dentists’ Review Body has reported in May. It is hoped that the difficulties in recruiting and retaining GPs will be recognised in the DDRB report.”

ENDS

Notes for editors

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Accountants are calling for urgent consideration to be given to restoring local knowledge and contacts within primary care support services in England. A briefing submitted to GPC England by the Association of Independent Specialist Medical Accountants (AISMA), says that the centralisation of primary care support services, outsourced by NHS England to Capita, has led to the loss of local knowledge and contact base. The briefing highlighted significant concerns relating to Capita’s performance with regard to practice payments and pension administration.

Andrew Pow, AISMA board member, said: “If there is one aspect that should be considered urgently it is the need for the local support services interface to be restored, so that managers have a “go to” person to contact who can deal with issues in their area.

“This would result in returning the significant amount of lost management time to general practice so that managers can get on with the important job of managing their practices at what is a very difficult time for the sector.”

The AISMA briefing to GPC England highlighted problems in three areas; failure to pay practices in a timely manner for work performed; failure to process the correct pension deductions and update pension records; and failure to provide a clear interface between support services and GP practices to resolve issues quickly.

Dr Krishna Kasaraneni, BMA GP England Executive Team lead on PCSE, said:

“There have been some improvements in the way the PCSE contract has operated since its launch in 2015, largely down to continued pressure from the BMA, LMCs and other organisations. However, there has been a worrying loss of expert knowledge in key areas which AISMA highlights, especially in the administration of key accounting and financial operations. Far too many mistakes are occurring which has left practice payments, pension payments and GP training grants in a state of confusion. The BMA has made it clear to PCSE that this situation must be addressed as a matter of priority.”

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Commenting on the announcement by the BMA’s Scottish GP committee, Pauline Hogg, Scottish board member for the Association of Independent Specialist Medical Accountants, said:

“The funding injection promised in the new contract should give GPs in Scotland a measure of financial stability for the next two years. There should be more winners in terms of income, although we will have to wait and see how the new funding formula will affect currently high and low earning practices and what the funding gap is for the practices losing out under the new formula.

“The contract is ambitious and extra resource is promised. This, however, will not be fully in place until 2021. During this time there will need to be major upskilling for GPs, practice managers, nurses and other healthcare staff.

“The new contract, however, will do nothing to address current workforce problems. There are simply not enough GPs in Scotland and many will continue to feel overloaded as they try to plug the gaps.

“The interest free loans for practice premises should help practices struggling to attract new partners, although going down this route appears to ultimately mean that practices will give up ownership of their premises.

“Phase two of the new contract will bring about big changes to the way in which GPs are paid. It will be very interesting to see how the impact of direct reimbursement of practice expenses plays out among GPs working to adopt innovative ways of delivering services.”

Yesterday’s announcement that inflation in the year ended September 2017 increased to 3% means higher earning GPs who are subject to annual allowance pension tax charges face increased tax bills in 2017/18.

The September inflation rate is used by the NHS pension scheme to set the revaluation rate each year which is inflation plus 1.5%. This means that the value of career earnings will be increased by 4.5% in 2017/18; a significant increase in the value of pension benefits.

Although the annual allowance calculation is meant to exclude inflationary rises, the inflation rate used in the calculation is that of September 2016 (which was only 1%), not the September 2017 rate of 3%.

Therefore, as benefits in 2017/18 will increase by 4.5%, and the allowance for inflation is only 1%, higher earners are going to be taxed on a 3% increase in their career earnings.

Luke Bennett, partner at PKF Francis Clark and Executive Committee member of the Association of Independent Specialist Medical Accountants, said: “This seems unjust, when in reality the uplift is only 1.5% above inflation. The position will correct itself if inflation falls back next year, but that’s no comfort to those facing high annual allowance tax charges in 2017/18.”