By chance, I got sent a fax this week from a client, a letter from their PCT telling them that the interim seniority factor for 2012/13 is £96,646. Is this important? Yes – it is important because it is the figure the PCT will use to determine whether it should be paying the full seniority or not. If you earn less than two-thirds of this figure, it will abate your seniority by 40%. How does it know how much you earn? - You probably told it recently! When you completed those forms for your estimated superannuable remuneration for 2012/13 for the PCT to work out the superannuation deductions, you mentioned your expected superannuable profits – the same figures the PCT will be using to assess your entitlement to seniority. You might want to check this.
Now that’s all very well, and a useful brief description of the process but it is worth pausing and looking at the figure being used. £96,646 for 2012/13 is £2,674 more than 2011/12. Can that be right? Most of my clients are expecting their profits to fall in 2012/13, so is the increase a cynical move to push up the barrier to seniority? Well, the detail of the calculation is shown on a paper produced by the Technical Steering Committee, so surely it should have some integrity.
The detail makes interesting reading, we are having to use interim figures because the final figures have not yet been calculated. In fact if you read the report, the last year that final figures were calculated was 2008/9. Now that means that there are three complete years where some partners will have been paid seniority that they are not entitled, and three complete years where some partners will have been underpaid seniority. Some of these partners will have retired, and the figures can be significant, around £7,000 per partner for a GP towards the end of their career paid at the wrong level over three years.
Why the delay? All the information for 2010/11 was submitted earlier this year so what’s the problem?
The other issue that can be seen from the paper is that looking at the calculations, there is no facility to cope with a reduction in profits, the lowest outcome is an uplift of 0%. Many GPs would be happy with static profits, but the reality is that profits are falling, and it would seem that the model in use can’t cope with this.
This needs to be addressed. So what should GPs be doing now? When you get your June payments, check the seniority levels that have been paid, you may need to look carefully to find if any adjustments have been made. You might also want to review the expected profits you have given the PCT for 2012/13.