As 2024 draws to a close, Pulse looks at the big issues in general practice this year, such as the announcement of a National Insurance tax hike for GPs in the Budget
Ahead of the first Labour budget in 14 years, speculation was rife about what it might bring for general practice.
The BMA made a submission to the Treasury, outlining the priorities for funding with a particular emphasis on the need to boost GP funding, specifically asking for an extra £40 per patient as an increase in core funding. The union also warned that changes to the lump sum pension allowance, national insurance rises and any changes to wider pension taxation could cause practice closures.
On 30 October, chancellor Rachel Reeves announced a £22.6bn funding boost for the NHS over the next two years. The only ring fenced funding for general practice was £100m for upgrades to GP practices, in order to deliver improvements to an estimated 200 surgeries across England.
But neither of these were the headline announcements for GPs. The chancellor announced that the rate of employer National Insurance was to increase by 1.2 percentage points – to 15%. As part of these changes, the ‘Secondary Threshold’ (point at which employers become liable to pay national insurance on an individual employee’s salary ) will reduce from £9,100/year to £5,000/year. Pulse’s analysis of the Budget laid out the details clearly, showing how GP practices seemed to have fallen through the cracks.
Ms Reeves committed to providing funding to cover the costs of this hike in public sector organisations. However, then began the dance of clarifying where GPs stood in this mess. The day after the Budget, chief secretary to the treasury Darren Jones said on BBC’S Question Time that GP surgeries were ‘privately-owned partnerships’ and so would have to pay the increased NIC rates.
The following morning though, he clarified those comments and added that small GP surgeries would be ‘somewhat protected’ by a doubling of the Employment Allowance, which reimburses smaller businesses’ National Insurance costs by £10,500 (up from £5,000). However, the BMA’s GP Committee chair Dr Katie Bramall-Stainer pointed out that GP practices are not eligible for this allowance as they are defined as providing public services.
This ‘cruel anomaly’ was picked up on by the national media as GPs entered a limbo of being both private and public sectors – and receiving the benefits of neither. The BMA asked GPs to write to their MPs to demand a U-turn from the Government on its decision to not refund practices for increased National Insurance contributions (NICs). The trade union said that the Budget had ‘failed to protect GP practices’ in a time where GPs were already under ‘severe financial strain.’
Speaking in Parliament a week on from the Budget, health secretary Wes Streeting assured GPs that he would take their views on the National Insurance hike seriously. Prime Minister Keir Starmer also responded to the concerns, and said that ‘funding arrangements’ for GPs would be set out ‘by the end of the year.’
The potential cost of the hike in National Insurance contributions has been calculated by various parties. Given that the impact will vary practice by practice there is still a lot that is unknown. Data gathered by Berkshire, Buckinghamshire and Oxfordshire LMCs revealed that the Budget changes could cost practices in England a total of £260m and that one in six practices are considering handing back their contract and closing ‘due to no longer being financially sustainable’. An expert FAQ also highlighted that ‘there would not be a single salaried role in a practice that won’t be affected by these changes.’
At the annual England LMC conference last month, GP leaders voted for a ‘special conference’ to be held to discuss how to escalate their protests against the increase in National Insurance contributions. Opposition parties also joined the call in urging the Government to rethink the rise in NIC for GP practices.
Earlier this month, the Government revealed the first details about the next GP contract. An extra £889m ‘on top of the existing budget’ was announced, but there was no specific compensation outlined for the impact of the NICs hike on practices. Dr Bramall-Stainer said that while the funding was a ‘positive starting point’ for the negotiations that would continue into the next year, GP practices had been ‘frantic with worry’ about the rise in NICs. Though initial signs seem positive, the Government should ensure it does eventually address the impact of the tax hike, as GPs certainly won’t forget about it.
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