GPs hit by National Insurance raid could get compensation after a backlash

Family doctors had pleaded for exemptions, saying the extra costs could force some out of business

GPs set to be hit by the Chancellor’s National Insurance increase could be given compensation following a backlash against the plans.
Family doctors warned surgeries could close, or staff be laid off, while care homes said they faced bankruptcy as a result of moves to increase employers’ contributions.
When the Budget was announced, 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 surgeries are privately owned partnerships and not part of the public sector and will therefore have to pay”, sparking fury from family doctors.
On Friday, the Government said there would be no exclusions for GPs.
However, a source said funding packages for GPs have yet to be agreed, leaving room for some level of reimbursement.
The NHS and the rest of the public sector are exempt from the tax rise – but that does not cover most GPs, many of which run as small businesses, or private care homes or hospices providing NHS services.
Care homes said they face a £2.4 billion funding hole, as a result of the NI increase, combined with increases in the national living wage announced this week.
Dr Katie Bramall-Stainer, chairman of the BMA GP Committee said Mr Jones’ comments came as “a huge shock to the profession, many of whom simply will not be able to afford these increases, and will have to reduce their staff and services, or even close their doors entirely.”
The British Medical Association said the increase would cost an extra £865 for every employee earning 30,000, meaning costs running into tens of thousands for some surgeries.
For some practices, the extra costs from the budget are equivalent to the salaries of five nurses, estimates show.
Dr Bramall-Stainer on Friday wrote to Mr Jones, calling on the Government to exempt GPs from the tax hike or reimburse them in full.
A Government spokesman said “tough decisions” had been taken to allow a £22 billion boost for health and social care.
He said: “The employer national insurance rise doesn’t kick in until April, and we will set out further details on the allocation of funding for next year in due course.”
A No 10 spokeswoman said contracted workers, including GPs, were not eligible for an exemption from the hike. She said funding for GPs would be discussed in negotiations of the annual GP contract.
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 to 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.”
The BMA is vehemently opposed to any attempt to include the extra costs of the NI in such a package.
A union source said it would be “disingenuous” to attempt to position any reimbursement as part of a future funding deal, given that it would only return what was being taken.
GPs are already taking part in “work to rule” protests against their current contract, which boosted funding for this year by 7.4 per cent, including 6 per cent for GP pay.
Under the changes, employers’ contributions will increase by 1.2 percentage points to 15 per cent from April. Companies will also have to start paying for staff who earn more than £5,000 a year, instead of £9,100.
Professor Kamila Hawthorne, chairman of the Royal College of GPs (RCGP) has contacted Wes Streeting, calling 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.”
She said: “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.
“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.”
A leading figure in the care industry said the raid will bankrupt some social care providers and exacerbate the sector’s “crisis”, a leading figure in the industry has said.
Nadra Ahmed, chairman of the National Care Association, said providers are facing £250,000 of extra annual costs because of the tax change.
She accused Labour of back-tracking on a promise before the general election to prioritise the social care sector if it won the election.
Ms Ahmed, whose association represents around 1,200 small to medium-sized care providers, called for the sector to be spared the National Insurance rise.
She told The Telegraph: “We should be in exactly the same position as the NHS and be exempt. We are looking after vulnerable people just as the NHS are.
“They are both sides of the same coin. Social care is being disproportionately affected by this National Insurance rise.”
She added: “I think social care providers will be looking very carefully at their bottom line. I fear some could go under.”