Reeves’s NI raid ‘will cost GP surgery equivalent of five nurses’ salaries’

Dr Richard West warns practices could be forced to shut up shop after National Insurance rise and increase in the national living wage

The Chancellor’s budget raid could cost a GP practice the equivalent of five nurses’ salaries, estimates suggest.
GP surgeries, care homes and hospices are among those demanding an exemption from the rise in National Insurance, saying the extra tax on employers may force some to close.
The Government had said that the public sector would be exempted from the rise.
However, on Thursday night, Darren Jones, the Treasury minister, said GP practices were “not part of the public sector” and would face extra costs.
Dr Richard West, chairman of the Dispensing Doctors Association, has written to the Health Secretary, warning that such a hike, combined with the increase in the National Living Wage, could force surgeries to shut up shop.
Dr West, whose practice serves 16,000 patients in rural Suffolk, said: “Our accountants have calculated that the practice will incur additional costs of £140,000 from next April. This includes the costs associated with the rise in employers’ NICs and the Living Wage. This is equivalent to several senior clinical staff.”
The figure is almost as much as the combined starting salary of five nurses, who earn £29,969.
Dr West said: “The increased costs associated with the Budget will have to be met by reducing patient services and/or making staff redundant.”
Ahead of the election, the Health Secretary vowed to transfer billions of NHS funding to GPs, saying this would “fix the front door to the NHS”.
He said: “It’s at the crux of the crisis in the NHS because, unless we fix the front door to the NHS in general practice, we’re not going to get the rest of the system working.”
In his letter to Mr Streeting, Dr West said: “General practice is the front door to the NHS. The increase in employers’ NICs and Living Wage could close many of those doors for good.”
Under the changes announced by Rachel Reeves, employers’ contributions will increase by 1.2 percentage points to 15 per cent from April and firms will have to start paying for staff who earn more than £5,000 a year, instead of £9,100.
Dentists and pharmacists would also be affected by the changes.
The Independent Pharmacies Association said the Budget was a “wrecking ball” to community pharmacies, saying it would cost the sector £1.25 billion and push many out of business.
Dr David Wrigley, a GP and deputy chairman of the British Medical Association (BMA), said the impact of the tax rise would be “monumental”.
He wrote on X: “Make no mistake. The impact of NI rise/lower salary threshold on NHS GP surgeries across the country will be monumental. Many are already on a financial tightrope due to yrs [sic] of neglect. We need a rapid announcement of full reimbursement.”
Neil O Brien, the former health minister, said it would be “totally unfair” not to reimburse all GPs.
Dr Jess Harvey, a GP based in Shropshire, told BBC Radio 4’s Today programme that practices will “really struggle”.
“During these contract negotiations for our new contract, unless we’re getting given suitable remuneration to cover this National Insurance inflation, then we’re going to really struggle,” she said.
“There are going to be practices which start to make redundancies. There are practices that were already considering redundancies because it’s so hard to manage financially, and if we don’t get enough money to continue to run these practices, then we’re not going to be able to provide the service that people want.”
When asked if GP wages should “take a hit” to cover costs, Dr Harvey said: “How general practice is funded, this isn’t about GPs, this isn’t about my wage. I don’t want an increase in my wage.”
Helen Morgan, health and social care spokeswoman for the Liberal Democrats, said: “We are urging the Chancellor to change course and exempt GPs from a tax hike,” she said.
“This new Government must not make the same mistakes as the Conservatives, fixing the GP crisis is crucial for saving the NHS.
“If people can be checked quicker, fewer will end up in hospital for treatment. That’s better for patients, better for the NHS and better for taxpayers.”
The British Medical Association on Thursday said health ministers were “locked in discussions with the Treasury” over the issue.
Dr Katie Bramall-Stainer, chair of the BMA’s GP committee, said she had held discussions with Stephen Kinnock, the health minister, while Phil Banfield, the BMA Council chairman, did the same with Wes Streeting, the Health Secretary.
She argued that NHS GP practices do “count as public sector”, citing the Freedom of Information Act 2000 which defines them as “public sector authorities”.
On Friday, Downing Street suggested GPs could get extra funding, in the light of the National Insurance hike, as part of their contract.
Negotiations on the deal are due to start within weeks.
Terms are negotiated annually but were imposed this year, with many GPs currently taking part in “work to rule” protests against their current contract, which boosted funding by 7.4 per cent.
A No 10 spokeswoman said contracted workers, including GPs, were not eligible for an exemption from the NICs hike, which she said was consistent with the approach of previous governments.
“There is a general process whereby departments, the Department of Health, for example, confirm their funding for general practices,” she said.
The spokeswoman added: “I think that’s part of the annual GP contract process. I believe that will take place later in the year.”
The Royal College of GPs said it has contacted Wes Streeting, seeking assurances that practices will be protected like “the rest of the NHS and public sector”.
Professor Kamila Hawthorne, the College chairwoman, said: “We are writing to the Health Secretary today asking for urgent assurances that GP practices will be given the same protection as the rest of the NHS and public sector and receive the necessary funding to cover these additional costs.
“We have very serious concerns about the impact of the increase in National Insurance employer contributions on GP practices right across the country, many of whom are already struggling to keep their doors open and make ends meet due to historic chronic underfunding.
“They are working their hardest to provide quality care for their patients against a backdrop of significant budget constraints and staffing challenges – and this added level of insecurity will only compound these pressures.
“For some, this extra financial burden will be the straw that breaks the camel’s back, forcing them to make tough decisions on redundancies or even closing their practice, and ultimately it is our patients who will bear the brunt.”
Ruth Rankine, director of primary care at the NHS Confederation, said: “Our members across primary care will be deeply concerned if the employer National Insurance contribution uplift has to come out of their core budgets.
“GP surgeries may operate as independently-owned partnerships but they are wholly funded to provide NHS services and so they should be given the same support as NHS trusts and other organisations in the public sector.
“As primary care providers have already not been given extra funding to cover the full cost of the recent pay awards, while also having to pay out higher cost of living allowances and increases in the minimum wage, this development could create a perfect storm in which some practices have no choice but to close or to cut back on their services as they cannot afford to keep them running.
“Already, there are over 200 fewer general practices open in England than there were two years ago at a time when the population continues to grow and people have more complex healthcare needs.”