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Inflation ‘forced’ NHS England to cut primary care funding last year

Inflation ‘forced’ NHS England to cut primary care funding last year
By Eliza Parr
27 January 2024

NHS England has said it was ‘forced’ to cut primary care transformation funding last year due to inflation and energy cost pressures. 

The national commissioner’s annual report for 2022/23, published yesterday, said it needed to find extra funding to cover higher energy costs and inflationary pressures.

As a result, NHSE had to cut other funding streams, particularly for primary care and digital investment.

The report said it was a ‘very challenging year’ for the NHS due to a ‘real terms cut in core funding’, a high rate of inflation, and operational pressures such as industrial action. 

Recent figures showed that general practice funding per patient has seen a real terms cut of 7% since 2019.

The NHSE report said: ‘At the start of the year, we were forced to issue additional inflation funding of £1.5 billion to cover higher energy costs, a direct impact of inflation on index-linked contracts and other inflationary pressures. 

‘This required us to reprioritise transformation funding, in particular cutting funding for digital investment and for primary care.’

As well as these inflation pressures, the NHS also saw a real-terms reduction in total funding of 0.6% in 2022/23 compared to the previous year, mainly due to reduced Government funding for Covid-19.

NHSE declared its operating expenses for GP primary care services as £796.5mn in 2022/23, which is a reduction of around 38% from the £1.28bn the year before. 

However, the total operating expenses for general practice including CCGs and ICBs increased over the same period, from £11.4bn to £11.5bn. 

Former BMA chair and chair of the North West London LMCs network Dr Chaand Nagpaul told Pulse it is ‘inexplicable and counterproductive’ to make cuts to primary care as this ‘inevitably’ results in more pressure on hospitals.

He said: ‘I find it very concerning that NHS England chose to yet again use primary care as a soft target as the source of its cuts. This is also counterproductive at a time when the pressures in the NHS need a stronger primary infrastructure if we are to manage patients in the community to actually reduce hospital pressures.’

‘NHS England chose to single out primary care as the only sector to make cuts from,’ Dr Nagpaul added.

The report pointed to NHS England’s efforts to increase the primary care workforce, stating that by the end of 2022/23 there were more than 29,000 extra direct patient care roles. 

But NHS leaders admitted that ‘retention of the qualified GP workforce remains a significant issue’. 

They also said a financial priority for this current financial year is to ‘use the specific resources’ they have been given to ‘continue to increase’ investment in primary care services.

GP practices have been locked into a five-year contract since 2019, but this will come to an end in March.

The BMA recently surveyed grassroots GPs on their wishes for the future contract, and the GP Committee (GPC) chair told Pulse that the Government’s offer will be put out to a referendum next month. 

In November, GPC chair Dr Katie Bramall-Stainer told LMCs that GPs deliver ‘phenomenal value for money’ despite receiving just 7.2% of the NHS budget.

The committee is also arguing for the inclusion of GPs within the Additional Roles Reimbursement Scheme (ARRS), as a potential solution to financial pressures across general practice.

This article first appeared on our sister title, Pulse.

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