When the DoH announced that it was cutting the Doctors' and Dentists' Review Body's recommended GP pay rise for 2010/11 to just 0.8 per cent from 1.34 per cent, it stated that another 1 per cent should be found by practices making efficiency savings.
Depending on their circumstances - for example, getting reduced funding under a PMS contract - some practices may have to cut back by rather more than 1 per cent to prevent profits falling back dramatically.
The staff payroll is generally practices' heaviest overhead cost, and although reviewing salary expenses might lead to some difficult decisions, this is the logical place to start.
Reduce salaries bill
The Agenda for Change (AfC) pay rise for staff directly employed by the NHS is 2.25 per cent.
It does not apply to staff working for contractor practices unless being paid at AfC rates is part of your employee's terms and conditions. Regardless of this, some staff may be aware of AfC's 2.25 per cent, and not matching it might lead to feelings of resentment.
However, making the team aware of the NHS funding squeeze and the GMS 0.8 per cent rise, might make them happier about accepting a token or no pay uplift.
You may be able to sweeten the pill by offering to pay bonuses if the practice's annual profit is higher than expected.
Practices can achieve savings by offering perks, such as childcare vouchers and extra paid holiday, rather than salary increases. Some staff may prefer more time off to a pay rise.
If you have employees within a few years of retirement who do not belong to the NHS Pension Scheme, suggest they sacrifice some salary in return for the practice paying into personal pensions for them.
A salary sacrifice scheme will cut down the practice's bill for employer's national insurance contributions.
Making staff members redundant is not an option unless their jobs are no longer needed. But when staff members leave or retire, consider whether other staff can absorb their duties.
Not replacing staff might involve some re-organisation.
Cut locum costs
During the course of a year many practices will waste a significant amount on paying GP locums simply because the permanent GPs fail to stagger their holidays.
Some GPs with young families will only be able go on holiday between school terms, but if the will (and need to cut costs) is there, it is often possible to avoid taking off the same weeks as another GP.
Wherever possible, practices need to avoid holidays clashing so that cover for the GP on leave can be arranged internally.
Form a buying club
A buying club is where a number of practices or other organisations work together to put in joint orders for goods and services in order to secure discounts for buying in bulk.
The ideal size of buying group is probably no more than 10 practices. Local practice managers often meet up regularly as a group and this is a good forum to discuss setting up a club.
Practice buying clubs are used for drugs and medical supplies, staff uniforms, computer supplies, telephone systems, stationery and so on.
They are also used for booking locum GPs, contracting with cleaning services and surgery maintenance services.
Member practices should provide details of how much they are currently spending on the selected goods and services to determine how much each practice will contribute on a monthly basis.
At the end of each year, savings achieved are returned to each practices pro rata to their contribution.
- Simon Pointon is an accounts manager at specialist medical accountants Sandison Easson & Co, www.sandisoneasson.co.uk
|Other ways to save money|
Review energy costs and suppliers
Defer repairs and renewals
Scrutinise accountancy fees
Change your indemnity provider
Do regular stock checks
Cut post and phone costs
Change accounting year end
Alter loans to interest only