As April looms, practices are facing yet another squeeze on their finances; the National Living Wage (NLW) hike will come into effect soon.

The 9.8% rise from £10.42 to £11.44 per hour, for anyone aged 21 and over, may not sound a lot, but as an ongoing extra cost, managers are sure to feel the increase.

The impact of the rise is all the harder to swallow when it looks like the Government will impose a 1.9% baseline uplift to the GMS contract – an offer that’s being challenged by the BMA, which is running a referendum to gauge GP opinion.

A recent vociferous discussion on the Practice Index forum demonstrates that managers are worried that the NLW rise will significantly eat into their finances. They also discussed how they plan to deal with it.

Competitive

Staying competitive when seeking to attract and retain staff is just one problem for managers. As one commentator on a Practice Index discussion thread said, their practice already pays more than 10% above the new wage rate, but it’s competing with the likes of supermarkets and care homes for staff.

Jane Dalgleish, a practice manager in Stockton-on-Tees, comments: “We always try to give our staff more than the National Living Wage because we think they deserve it, and this practice is in an area that’s classed as high deprivation, so they do get some abuse on the phone sometimes and we have to be strict with the patients about it.

“To be competing with supermarkets and things like that, where it’s probably not as nice a job but you don’t get as much abuse, doesn’t feel right. We can’t even match what NHS corporate are paying because of the annual increments they get.”

Recruitment freeze

One common impact that the NLW hike is likely to have on practices is that they won’t replace staff when they leave, as a way of saving money – though this isn’t easy or popular because it means putting more pressure on the remaining team to cover the gap. Making some non-clinical posts redundant is also being discussed.

Karen Steer, a practice manager in Norfolk, observes: “There’s nothing wrong with the concept of the National Minimum Wage but I think there’s something wrong with telling us that it’s going up by 9.8% and then giving us 2% in the Global Sum to cover it.

“We will not be replacing a full-time member of staff who’s left because that will, in itself, cover the uplift and that is the only reason we’re not replacing her.”

Jane’s practice has done the same thing, and she adds: “We haven’t replaced one member of staff who left earlier this year and it’s something we’re having to look at because staff costs are one of the biggest outlays. But you can’t keep asking people to do more. You can firefight for so long, but not all the time.”

The discussion was joined by one manager who’s decided not to replace a GP who left last year, and the practice is unlikely to replace anyone else who leaves from now on.

Finding the cash

The most likely hit for a practice trying to meet the rising costs will be on partners’ income and many managers note that this is already happening.

Karen says: “We do a yearly wage review, usually in July, and we’ll be looking at the differentials between those lower-paid staff and those staff who are on slightly higher income.

“The differential gets smaller and the only place we’re paying for that is out of the partners’ pockets. It won’t be long before our partners are earning the same or less than our salaried GPs.”

One manager on the discussion thread said they’d calculated that to give the NLW rise plus 2% for other staff (as well as a little more where a differential should be maintained) would cost the practice an extra £54,000 a year.

General practice undervalued

Feelings that general practice is being undervalued are apparent, with optimism for the future being in short supply.

Chair of the IGPM, Nicola Davies, states: “As healthcare professionals, it’s heart-breaking to see the stark contrast between the mere 2% uplift to the GMS contract and the substantial 10% increase in the National Minimum Wage. This discrepancy not only undervalues the critical contributions of healthcare workers but also threatens the sustainability of our NHS.

“Our dedicated staff are the backbone of patient care, working tirelessly to ensure the wellbeing of those in need. Yet, as the cost of living continues to rise, it becomes increasingly challenging to retain talented individuals in our profession. We must recognise the invaluable role they play and provide fair compensation reflective of their expertise, dedication and the demanding nature of their work.”

Service cuts

Another serious consequence of rising costs could be the effect on service provision. Nicola warns that the discrepancy in increases raises concerns about general practice’s ability to continue providing essential services to patients.

“Without adequate support for healthcare providers, we risk compromising the quality and accessibility of care, ultimately putting patient health and safety at risk,” she says.

“It’s imperative that we address this issue urgently, advocating for equitable funding and fair compensation for healthcare professionals. By valuing and supporting our staff, we can ensure the retention of skilled professionals and maintain the high standard of care our patients deserve. It’s not just about numbers; it’s about recognising the humanity and dedication behind every healthcare worker and the impact they have on the lives of those they serve.

“The outcome of this is simple; practices will have to close and patients will need to wait even longer to see a healthcare professional.”

Mood

The mood in general practice is subdued, to say the least, as Jane explains: “It’s a bit of a depressing place to work at the moment, but it’ll change because it always does.

“Our income isn’t increasing but our outgoings are, so it’s a double whammy. We’re lucky in that it’s a very successful practice so we’re not concerned in terms of the viability of the business but there is a feeling of being disheartened in general.

“Everybody’s working harder and nobody’s getting any better off. After the awful situation we were in with Covid and how hard everybody worked, I don’t think anybody wanted a pat on the back, but to be treated like this retrospectively is very disheartening.”

Financial belt tightening seems inevitable.