With inflation hovering around 10% and the increase in the GP contract locked at 2.1% (agreed back in 2019) the cost of living increase is disproportionately impacting GP practices.  Could this be the straw that breaks the camel’s back for independent general practice?

The impact of the huge cost of living rises is not simply in terms of the bills that fall through the practice’s door.  In this month’s episode of the Practice Index Practice Manager Panel we discuss the wide ranging impact the crisis is having now and how that is likely to get worse through the winter.

The majority of any practice’s costs are its staff costs.  The NHS has awarded a 4.5% rise for NHS staff.  GP practices are not funded to pass this rise on (even though 4.5% still does not match inflation for staff and so still represents a real terms pay cut) to its staff because they have only received a 2.1% increase.  This presents a conundrum for practices.  Do they raise staff pay beyond the level for which they are funded (which in turn means the partners absorb the cost and themselves take a pay/drawings cut in the process)?  Or do they only offer the pay rise they have been funded for?  But then they risk losing staff as the pay rates at local supermarkets and restaurants are suddenly more attractive than those on offer in the local practice.  Staff turnover has huge costs in terms of recruitment, the new salary they have to pay to fill the posts, training and supervision costs, as well as covering the gaps that are left while recruitment takes place.  High levels of turnover can end up being more expensive than funding a higher pay rise in the first place.

It is not just practice staff.  What about the ARRS staff funded via the PCNs?  If the PCN does not increase their pay then competition is so fierce for these staff that they can just move to another PCN that does.  But if they do how is that fair on the practice staff who have not received a similar rise?

In the meantime the new energy bills that practices are beginning to receive are eye watering.  There are rumours of a business cap on energy price rises that may provide some reprieve, but until we see this in black and white it can’t be relied on.

At the same time as the practice is struggling under the weight of the cost of living rises, so are the patients. An RCGP poll found that 55% of Britons feel that their health has been negatively affected by the rising cost of living.   One example is of a patient who was unable to afford the cost of transport to hospital for lung cancer investigation and treatment.

For general practice this means a huge increase in actual and future demand for their services.  If that is not enough the treasury was reportedly considering an idea for practices to determine eligibility for financial cost of living support (although thankfully that particular threat appears to have receded in recent weeks).

Whether practices can withstand the pressure that all of this puts on them remains to be seen, particularly as the challenges of winter kick in.  There are no easy solutions, and national support does not appear to be forthcoming.  What is crucial is that practices work together and support each other as best they can, because right now the best support available is that coming from within general practice itself.