Pay Rises in a Time of Inflation

The most asked question I’ve had this year so far, is whether or not the practice can afford to give their staff a pay rise. All practices are obligated to pay their staff a minimum wage (currently £9.50 per hour for those over the age of 23) but many are working towards offering the real living wage (currently £11.05 per hour). This is more commonly offered in London boroughs but has begun to spread throughout the country.

With inflation currently running at 9.1% (the highest it has been in 40 years) and with the cost-of-living crisis dominating the headlines due to the hikes in prices namely for petrol and food; individuals will be looking to their employer to ensure they can afford their current monthly household expenditure.

The Global Sum for 2022/23 is showing an increase of just under £3 per (weighted) patient from 2021/22 but with the 1.25% increase in the national insurance contributions from April, practices will see a chunk of that increase swallowed up before it’s even received. In turn, practices are likely to see a doubling of any current gas and electricity bills and with the recent NHS Service Charges test case having a less than positive outcome, those practices within health centres may see their service charges increase as well as more aggressive chasing for payments.

Where does this leave practices then, when it comes to considering its staff. Well, it’s been a tough two years and whilst the hysteria that Covid caused has calmed; it has left GPs picking up the pieces with not only a backlog of patients to see, but now having to deal with managing staff expectations in this new post Covid world.

The BMA each year submit their requests to the Review Body on Doctors’ and Dentists’ Remuneration (DDRB) and they have requested a pay award of RPI + 2%. In real terms this is 11.7% + 2% or 13.7%. This would equate to a Global Sum increase from £99.70 to £113.36 which would of course adequately cover a substantial pay rise for staff members. In reality, the Global Sum in 2023/24 is unlikely to be any more than £104 meaning the cost of any pay rises will have to come straight out of the profits of GP partners.

Of course, there will be members of your team who are longstanding and who have been invaluable to the practice throughout the pandemic, who you will want to remunerate appropriately. It’s just, how much are you able to offer? For all our clients, we always produce a drawings projection alongside the annual practice accounts and we can always factor in different percentage pay rises if you had ideas in mind but weren’t sure how these would materialise. Please do make sure you ask your acting partner or accounts manager to take account of any expected increases.

Whilst RBP can’t advise on what you should pay your staff, it seems from our conversations with practices and direct advice from the BMA to some practices; most are offering pay rises of no more than 3%. This is obviously a much lower than the current levels of inflation and GPs and their staff will no doubt be waiting with baited breath for the release of the 50^th DDRB report which usually surfaces in July of each year.