Welcoming the £22.6bn increase in the day-to-day health budget, Andy Pow, AISMA board member, noted that it covers a two-year period, using 2023/24 as a baseline.
‘Significant chunks of the increase will already have gone on pay uplifts in 2024/25. Higher National Insurance contributions for employers will eat further into the additional sums being invested into the health service,’ he said.
‘The government’s commitment to a fund to allow 200 GP surgeries to upgrade their premises is a positive step,’ commented Mr Pow. ‘However, we will have to wait until the Health Review is published next Spring to find out how additional funds are to be invested in primary care,’ he added.
For GP practices, Mr Pow explained that the impact of the rise in National Insurance costs for employers will be significant. ‘The reduction in the threshold means practices will have to pay employer National Insurance contributions for more employees. For example, where previously a practice would not need to pay employer National Insurance contributions for an employee earning £9,100, it will now have to pay £615.
The employers’ National Insurance rate is also increasing from 13.8% to 15% from April 2025. ‘This means an employee earning £30,000 a year will cost the practice an additional £866,’ said Mr Pow.
‘Other small businesses are protected from these costs through the Employment Allowance, which GP practices and other primary care providers are not eligible to claim. Unless the rules for this change, practices will be faced with the full cost uplift.’
Mr Pow went on to say that although the 6.7% increase in the National Living Wage is good for employees, it further exacerbates the issue of how practices fund their staff, since pay differentials between different staff grades will need to be maintained. ‘This could mean another year of above inflation cost increases for practices,’ he warned.
‘AISMA is concerned that the staff cost modelling used by NHS England for the Global Sum uplift confirmed in August is out of date so this needs to be looked at very carefully.’