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What do the NHS pay awards mean for GP practices?

The governments in England and Wales have accepted recommendations from the NHS Pay Review Body and the Doctors' and Dentists' Review Body (DDRB). GP Business looks at what this could mean for practices.

Picture of UK money
(Picture: Rosemary Calvert/Getty Images)

What is the Agenda for Change (AfC) award?

The NHS Pay Review Body has made recommendations on pay for NHS staff paid under AfC in England, Wales and Northern Ireland. Scotland had already awarded a 5% increase in June. The governmens in England and Wales have accepted the recommendations.

The changes will see NHS staff receive at least a £1,400 pay increase for 2022/23, which will be backdated to April. This will be enhanced for those at the top of band 6 and on all points in band 7 so it is the equivalent of a 4% pay rise (which will be greater than £1,400). Overall the increase to AfC is 4.75%.

GP practices are not covered by AfC, but many practices use the bands and the annual pay increases as a guide on what to pay staff.

What has the government agreed for GPs?

The GP contract in England is excluded from this year's pay award because it is covered by the five-year deal that began in 2019 and has fixed rises applied each year. Core GP funding rose by 3% in 2022/23.

However, the DDRB continues to make recommendations for salaried GPs and the government has agreed that these doctors should receive a 4.5% increase. As is the case with all staff employed by practices, it is up for practices to decide what actual pay increase they give to their salaried GPs.

The GP trainers' grant and appraisers' grant will also be increased by 4.5%.

All other doctors will receive a 4.5% rise, with the exception of junior doctors. Junior doctors, which include GP registrars, are also subject to a multi-year pay deal that delivers a fixed 2% rise per year.

Will practices get additional funding to cover the rises?

No. GP practice funding in England is covered by the five-year deal and the government has said that multi-year deals like this should not be revisited. The 3% core funding rise for the contract this year clearly falls far short of the pay awards backed by the government.

In Wales negotiations for the GP contract are ongoing but the government suggested that the 4.5% uplift could also apply for this.

What are the implications for practices?

Accountants have warned that the average GP practice in England face losses of between £35,000 and £40,000 if they fund the pay awards

Specialist medical accountant James Gransby, a partner at RSM UK, told GPonline: 'Each practice will be different. But a practice would typically spend approximately £80 per patient on staff costs – around £15 to £20 of this would be on salaried GPs typically, the rest is admin, nurses, etc – a 4.5% rise therefore equating to a £3.60 per patient increase in total staff costs.

'So a GP practice with a 10,000-patient list would experience a £35k to £40k unfunded increase in staff costs which if this were a four-partner practice could see their profits fall by around £10k per partner for this year. This may mean having to make difficult decisions over staffing levels.'

Andy Pow, a specialist medical accountant with Mazars, told GPonline that general practice faced a 'perfect storm', with the impact of unfunded pay rises compounding the financial hit for GPs from annual allowance pension tax penalties triggered by soaring inflation.

He also suggested that if practices were unable to match pay rises awarded in secondary care, their ability to retain staff could be undermined.

What are the wider implications of the pay award?

There could also be other significant implications for primary care in England. The Treasury has provided no additional funding to the DHSC to cover the cost of a higher than expected pay award. The DHSC has said that it will be 'reprioritising' its existing spending plans to pay for the increase 'whilst minimising the impact on front line services'.

However, at an NHS England board meeting earlier this month, officials warned that any pay award over 3% could lead to spending cuts on primary care.

NHS England chief financial officer Julian Kelly said the health service was funded for a maximum pay settlement of 3%. He told the board meeting that every percentage point over 3% costs the NHS somewhere between £900m and £1bn – suggesting that the health service now faces a shortfall of up to £1.75bn.

'We would then be looking at having to cut back on investment in our major areas,' he told the meeting. 'Our major areas are primary care, cancer care, or indeed at the margin some big capital investments.'

What have the unions said?

BMA England GP committee chair Dr Farah Jameel said the pay award was 'a kick in the teeth' to both GP partners and salaried GPs in England.

She said: 'For GP partners, locked in a five-year pay deal that was agreed pre-pandemic, and now with inflation sky-rocketing, to offer nothing in addition to recognise their intense efforts and transformation of services during COVID-19, nor to pay their staff the recommended uplift, or meet the increased costs of running practices, is a complete insult.'

At a meeting on 21 July the GP committee backed plans to step up talks with the BMA council over possible industrial action by practices in England.

Junior doctors also look like they are heading towards industrial action. Junior doctor pay has fallen by 26.1% in real terms since 2008/9 and the BMA was already pushing for a significant pay rise to achieve pay restoration.

BMA junior doctors committee co-chairs Dr Sarah Hallett and Dr Mike Kemp said the pay announcement demonstrated 'the blatant disregard our politicians have for junior doctors in England'. They added: 'Our members have been clear. Refusal to commit to [pay restoration] by the end of the year leaves junior doctors in England no choice but to press ahead with preparations for a ballot for industrial action.'

The Royal College of Nursing's council has also voted to ballot members on industrial action and other unions have said they will be consulting members on what action they wish to take.

More information

We will be updating the Agenda for Change pay bands on our website as soon as this information is made available.

Government statement on the pay award

NHS Pay Review Body recommendations and report

DDRB recommendations and report

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