The core contract funding increased from 1 April 2024 by 2.7% to £107.57 per weighted patient (or £102.46 per weighted patient after deducting the out of hours opt out). For a practice with a weighted list size of 10,000 patients, the additional funding amounts to approximately £27,000 per annum.
Embedded within the contract uplift (which has been imposed on practices) is an assumption that a 2% pay increase for all staff, including ARRS, will be implemented by practices.
The difficulty for many practices (and businesses in general) is the pay differential between staff, so the pay increases may need to be much more than 2% in order to maintain this differential.
From 1 April 2024, the national minimum wage increased by 9.79% to £11.44 per hour (which follows a 9.68% increase in the previous year). Taking into account employers superannuation and employers National Insurance (assuming the individual earns over £9,100 per year), the hourly rate increases to £14.66 per hour from £13.36 per hour.
This increase in the national minimum wage will mean a pay increase of significantly more than 2% for a number of practice staff.
The additional cost for an individual working 20 hours on minimum wage would be approximately £1,360 per year.
For many practices, the increase in the contact sum will be insufficient to cover the increase in the gross salary costs and this will continue to place pressure on cashflow and profits.
Practices should be preparing calculations of how the national minimum wage impacts on the annual salary cost and the effect of pay rises for other staff who are paid above the national minimum wage.
For individual employees, they will see the benefit of the reduction in Class 1 NIC. For higher earners within the practice, they may also benefit from the changes to the high income child benefit charge.
Practices may wish to look at the potential to use ARRS funding for staff. Over the years, the number of Care co-ordinators within practices has increased along with Digital and Transformation leads. It should be noted however that the ability for PCNs to apply to the ICB for unused ARRS monies within the ICB area has ceased from 1 April 2024.
Funding is also available for individuals on the retainer scheme. The funding for this is £16,000 per annum for a retainer working 4 sessions per week, plus a bursary of £4,000 (which is payable to the retainer).
*The views expressed are the author's and not ICAEW's