Warnings on GP surgery redundancies and care home closures amid Budget tax hike

There have also been concerns about the impact on GP surgeries, with one practice manager suggesting it could cost his practice about £40,000 a year.

Patients sit in the waiting room at a GP surgery (Anthony Devlin/PA) (PA Archive)

GP surgeries will have to consider making staff redundant if the rise in employer national insurance contributions announced in the Budget is not covered, while some care homes could be forced to close, the Government has been told.

Chancellor Rachel Reeves announced the tax hike on Wednesday, as organisations representing care homes and hospices voiced concerns about the sector’s ability to plug the funding gap.

There have also been concerns about the impact on GP surgeries, with one practice manager suggesting it could cost his practice about £40,000 a year.

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.”

When asked if GP wages should “take a hit” to cover costs, Dr Harvey said: “How general practice is funded, this isn’t about GPs, this isn’t about my wage. I don’t want an increase in my wage.

“What I want to be able to do is to is to provide the same service that I’m providing now, if not better, in the future.”

Dr Harvey also said the amount of money surgeries are getting has not changed in six years, amid a rise in staffing costs.

“Yes, we are classed as private businesses, but the money that we get to run that business isn’t generated by profit, as I’m sure you can imagine, in terms of we aren’t charging people for service,” she added.

“The Government give us a specific amount to run our general practice, which is based on the number of patients we have. The amount of money that we are getting at the moment is the same as we were getting in 2018.”

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

Dr Jess Harvey

Paul Stanley, a practice manager at Gas House Lane Surgery in Morpeth, Northumberland, told the Today programme the changes could cost his surgery about £40,000 a year.

“It is a huge amount of money and our staff costs do equate to, I would probably say, about 65-70% of all of the costs of the practice,” he said.

“I think what we’re looking at is an unfunded increase in our staffing costs, which may ultimately impact on our resources and our staffing levels.”

Helen Morgan, health and social care spokeswoman for the Liberal Democrats, said: “We are urging the Chancellor to change course and exempt GPs from a tax hike,” she said.

“This new Government must not make the same mistakes as the Conservatives, fixing the GP crisis is crucial for saving the NHS.

“If people can be checked quicker, fewer will end up in hospital for treatment. That’s better for patients, better for the NHS and better for taxpayers.”

Meanwhile, a care group has called on the Government to exempt social care providers from the hike or ring-fence funding to cover it.

Independent Care Group (ICG) chairman Mike Padgham said: “The Government has to do something and it has to do it quickly, as I am already hearing from providers that this might be the last straw for some of them.”

Geoff Butcher, of the Blackadder Corporation, which owns a number of care homes in England, said he believes the rise in national insurance contributions (NICs) for employers could lead to some homes having to shut.

He told the Today programme: “We will certainly not be taking on additional staff. We will be having to cut back on improvement.

We are urging the Chancellor to change course, and exempt GPs from a tax hike

Helen Morgan, Liberal Democrats

“So this morning I was supposed to be going to a home to look at investing in a small extension and a new passenger lift. That almost certainly will have to go.

“And I know that colleagues in other services are looking at cutting back on staffing, and I think it will exacerbate the speed of closure of homes and the handing back of contracts by other services, including domiciliary (home) care.”

He said the £600 million funding to local authorities for both adult and children’s social care announced in the Budget “if it came through” would equate to about only £350 per employee in the social care sector.

He said: “Staff costs are 80% of our total cost. We’ve got nowhere to go on this.”

He said he finds it “extraordinary that year after year, governments find billions to support the likes of Ukraine, but we don’t find the money to support our very vulnerable people – I think it’s a huge reflection on our society”.

Care England, which represents providers in adult social care, said the national insurance rise, combined with wage rises, will leave the sector with “an additional circa £2.4 billion funding hole to plug”.