Last week Rachel Reeves, the chancellor of the exchequer, presented a budget designed to help the NHS, providing £22.6bn of extra funding over the next two years.1 Unfortunately, the main way of paying for this welcome increase is to raise employers’ national insurance contributions, a move that risks damaging the service the government claims it wants to save.2
This tax has been raised from 13.8% to 15%, and the threshold of earnings at which it kicks in has been reduced from £9100 to £5000. NHS trusts and the rest of the public sector will be sheltered from this tax rise, but GP surgeries, social care providers, and hospices—which are all private businesses with contracts to provide public services—will take the full financial hit.
The news has not been well received within general practices, and practice managers up and down the country have been poring over spreadsheets, working out what the rise, which is due to take effect in April, will do to their budgets. The extra cost for our surgery, which serves just under 13 000 patients, will be around £30 000. Government representatives have repeatedly insisted that because GP partnerships are private businesses they must absorb these new costs.3 A Treasury minister sowed further confusion by suggesting that smaller surgeries would qualify for Employment Allowance, which could offset some of the cost, only to be informed that general practices are not eligible because they provide public services.4
GP partnerships are not like other businesses. We have a single contract, which is with the NHS, and apart from the occasional insurance medical examination there are few other sources of income. Some practices are fortunate to earn a little extra from teaching or research activity, but we are prevented from operating private services from our surgeries. I have no desire to offer non-NHS services, but within this system we have no control over our income, because it is determined by the government, via NHS England. Faced with increased costs, the only option we have is to reduce our wage bill by cutting hours, losing staff, and reducing our service to patients. A significant number of practices are operating on a financial knife edge, where the sum lost will be enough to trigger insolvency and the handing back of contracts.
We were hoping for more from this government. Wes Streeting, the health and social care secretary, spoke of “mutual respect and a spirit of partnership” in a recent speech to the Royal College of GPs.5 He talked of moving the focus of healthcare from hospitals to the community, and some of us thought that meant moving resources in that direction too. There is deep disappointment and a feeling of betrayal now, with doctors divided as to whether this blow to our practices is deliberate harm or just incompetence. It is possible that the government will find some way to compensate for this expense, but it is unlikely that this will make good the damage to trust and goodwill inflicted by this budget.
