National Minimum Wage increase and the impact for doctors

The 2023 Autumn Statement saw many changes being imposed to support the Chancellors statement of ‘measures to make work pay’. One of these measures included ‘the biggest cash increase’ to the minimum wage in over a decade, set to take effect as of April 2024.

Despite the benefits to workers whose wages will be increased accordingly, GP practices are fearing that the increased wage will not be met by a proportionate increase in funding for practices who are undoubtedly going to feel the effects.

What are the concerns for GP practices?

The fear for practices is the lack of additional funding to cover the increased wage bills. As staff costs rise, our already pressed healthcare service currently battling the challenges associated with inflation and rising bills, could be under even greater pressure.

In 2023, practice funding was increased to support a payrise of all employed staff  of 6%, however, the funding provided was not sufficient to cover costs as it was based on patient list size as opposed to actual practice staff costs. British Medical Association (BMA) England GP committee chair, Dr Katie Bramall-Stainer, has warned that if the government fail to deliver funding to cover increased costs for GP practices, they would have ‘no choice but to reduce staffing…and at worse, it could see the closure of even more practices’.

The Association of Independent Specialist Medical Accountants (AISMA) recognise the minimum wage increase as greatly affecting the healthcare industry due to many staff within the industry being paid low salaries, if not minimum wage, and therefore the effects of a minimum wage increase will be directly felt.

A breakdown of the issue

The current level of patients per GP is rising, and as result the stress being placed on GP practices is continuing to rise. GPs are currently working at 28% above the ‘safe limit’ of patients per GP as a national average, with September 2023 recording 2300 patients per GP, when the safe limit (that some local medical committees (LMC’s) have cited in the past) is 1800 patients per GP. (Data taken from NHS.)

This issue is spiralling as GP practices in underfunded areas on average receive 7% less funding for about 14% more patients (meaning GPs cannot afford to pay doctors to work there despite the increased amount of patients.)

Something needs to change…

Figure 1 reflects the strong negative correlation of -0.99%, since September 2015 to January 2024, there has been a 34% increase in patients and a 17% decrease in practices. Evidently, these statistics support the need for greater changes within the NHS to better support both practices and their workers. Staff retention and hiring is more crucial than ever in ensuring patients are treated, however, this is not feasible for many practices due to financial pressures (as evidenced by the decreasing number pf practices.) With the minimum wage increase set to take effect in April 2024, the funding for practices should increase accordingly, or else practices will be unable to pay staff.

Figure 1 

Data from NHS England.

Figure 1 

Data from NHS England.

What does this mean for GP Practices going forward?

Contract renewal 

At the end of March 2024, the NHS 5-year contract was renewed. Many GP’s were hopeful for more extensive reforms than previous years to assist with the rising costs associated with the running of GP practices. The contract consultation has concluded and NHS England have released complete details of the contract renewal.

The funding increase breakdown has been detailed below by NHS England:

  • A planning assumption of 2% pay increase for all GPs and practice staff.
  • A planning assumption of 2% uplift to the Additional Roles Reimbursement Scheme (ARRS).
  • 1.68% inflation – which is in line with the Government’s November 2023 GDP deflator forecast.
  • 0.38% ONS population growth.

Data from NHS England.

NHS England have confirmed overall increase in investment of £259m taking overall contract investment to £11,864m in 2024/25. Many within the industry were hoping for more as the increased funding largely covers the increased costs associated with population growth (extra patients) but fails to consider the increased funding required per patient.

Further to the changes detailed above, the NHS have proposed that they will cut bureaucracy for GP practices by suspending and income protecting 32 out of the 76 Quality and Outcomes Framework (QOF) indicators which are used to give individual practices a performance score. This is in addition to helping practices with cash flow and increase financial flexibilities by raising the QOF aspiration monthly payment from 70% to 80% in 2024/25. Directed Enhanced Service (DES) requirements will also be simplified.

For PCNs: 

The Investment and Impact Fund (IIF) indicators will be reduced from five to two and the Capacity and Access Payment (CAP) will increase by £46m to £292m by removing three Investment and Impact Fund (IIF) indicators. This Payment (CAIP) will also now be paid at any point in the year, once PCNs confirm they meet the requirements.

PCNs should expect more staffing flexibility by including enhanced nurses in the Additional Roles Reimbursement Scheme (ARRS) and giving PCNs and GPs more flexibility by removing all caps on all other direct patient care roles.

These changes were enforced from 1 April 2024 and we shall update accordingly with any advice or further discussion where necessary, in due course.

Spring Budget 2024 

During the Spring Budget 2024, a £2.45 billion boost to planned day-to-day (resource) NHS spending in 2024/25 on things such as staff salaries, medicines, and other items a health service uses during the year. The Budget documents say this extra £2.45 billion day-to-day funding will support the NHS to ‘continue to improve performance and reduce waiting times’.

The £2.45 billion will give the NHS greater certainty and make it easier to cover the costs of staff pay increases in 2024/25. But the funding on the table is unlikely to be enough to support the capacity increases the NHS needs to cope with rising demand and the costs of industrial action over the coming year. At that stage, the NHS would be doing very well in 2024/25 to maintain current waiting time which is at historic highs.

Should you have any queries regarding any of the topics raised within this article or wish to speak to one of our experts, please use the form below.  

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.


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