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Holly Gibson, Price Bailey's healthcare expert offers her advice and insight on topical issues affecting the healthcare industry.

Holly Gibson, Price Bailey’s healthcare sector specialist provides an overview of the latest updates from the healthcare industry. This monthly appointment provides all the latest for those working within the industry, or just simply curious to find out more about the latest from within the healthcare space.

The bulletin will aim to look at what has happened recently in the industry, changes to expect, and potential other news and announcements. Should you have any questions regarding any of the topics discussed or wish to contact Holly to get further information on how Price Bailey can help you or your practice, please use the contact form to be in touch.

The latest…

June has been largely dominated by discussion surrounding the election. Announced on 22 May 2024, this year’s election will be one of the most momentous in history and is set to bring forth some necessary changes to the healthcare industry. Following the recent release of all the party manifestos, the NHS and increased support for the healthcare system within the UK has been at the forefront of many parties’ pledges. In this month’s issue we discuss election manifestos and the potential changes, review BMA’s 5 vital points for the incoming Government.

4 July Election: Manifesto Details

The below points have been selected from party manifestos and offer some light on focuses and approaches they would tackle in order to combat the perceived issues affecting the NHS and healthcare industry. All parties have made big pledges on health, but details of how these will be delivered remain light. Whilst opinion is likely to be a factor in your decisions on the 4 July, Price Bailey can help answer any questions and advise on the best course of action pre or post-election on these or related matters. The below points have been selected from party manifesto’s and do not offer a complete summary. Individual party manifestos should be consulted for complete details.

Conservative Party:

Emphasises infrastructure expansion, workforce growth, reducing bureaucracy, and leveraging technology.

Proposes plans to modernise NHS primary care services by significantly expanding the Pharmacy First scheme, this initiative aims to free up an additional 20 million GP appointments annually.
Commits to building 100 new GP practices and refurbishing 150 more, focusing on areas with new housing growth. They plan to construct 50 additional community diagnostic centres, primarily in underserved regions.
Supports the NHS Long Term Workforce plan, which aims to increase GP training places by 50% to 6,000 by 2031/32 and boost the number of non-GP direct patient care staff by 15,000 and primary care nurses by 5,000 by 2036/37.
Improving working conditions for NHS staff, although specific measures are not specified so it is unclear yet just how they plan to do so.
Cut 5,000 NHS managerial positions, releasing £500 million for frontline services, and investing in AI and technology to enhance care delivery and replace outdated computers.

Labour Party:

Prioritises community-based care, chronic condition management, and reducing waiting lists.

Shift the NHS towards a model where more services are delivered within local communities, focusing on managing chronic long-term conditions and emphasising prevention of illnesses. They vow to “build an NHS fit for the future,” through increased resources for primary care and community services, harnessing new technologies like AI to transform the NHS.
Plan to train thousands more GPs and guarantee face-to-face appointments. As well as introducing a modern appointment booking system to end the 8am appointment queues and providing extra care during weekends and evenings and establishing shared waiting lists to allow patients to be treated at neighbouring hospitals.
Improve access to services through new routes such as community pharmacists and expanding self-referral options.

Liberal Democrats:

Focuses on accessibility, workforce expansion, and reducing bureaucracy for GP practices.

Propose a £1 billion package to improve GP’s, promising to recruit 8,000 more GPs and ensure everyone has the right to see a GP within seven days or within 24 hours if needed urgently.
Giving those over 70 and those with long-term conditions access to a named GP and plan to free up GP time by expanding the prescribing rights of pharmacists, nurse practitioners, and paramedics.
Introduce a universal 24/7 GP booking system and remove top-down bureaucracy to let practices hire necessary staff and invest in training.
Expand the Pharmacy First scheme, promoting social prescribing, investing in community projects to tackle loneliness, and establishing a ‘small surgeries fund’ to support GP services in remote and rural areas.
A 10-year plan for hospitals and the primary care estate, setting up an independent pay review body, and creating a 10-year staff retention plan, including exempting NHS and care staff from the immigration skills charge.

Green Party:

Advocates for significant funding increases and immediate staff support.

Focuses on significantly increasing NHS funding and improving conditions for healthcare workers.
Propose an additional £8 billion funding for the NHS in the first year, rising to £28 billion annually by 2030, and plan an additional £20 billion in capital spending over five years to improve hospital and primary care infrastructure.
Provide guaranteed rapid access to a GP and same-day access for urgent needs, increase the allocation of funding to primary medical care by £1.5 billion annually by 2030, and invest £2 billion in primary care infrastructure over five years.
Restore public health budgets to 2015/16 levels with an immediate increase of £1.5 billion annually.

Reflection on the manifesto’s

It is difficult to assess exactly how the policies will come into fruition, and similarly, unless stated, the time periods in which these changes will occur.

Reducing NHS waiting times and harnessing new technology such as through implementing AI is a repeated pledge. Considering the waiting times and lack of appointments facing GP surgeries and hospitals, this seems an exciting development- however, many pledges fall short to acknowledge where the funding for healthcare professionals will come from and as to when it can be expected.

To similar effect, NHS staffing crisis has been recognised but there is a lack of detail as to how this will be achieved when staff burnout, funding, training, all must be considered. Whilst many of the manifesto’s talk about increasing GP training, that is all well and good, but the funding needs to be there long term to keep those GP’s within the NHS.

The Conservatives have committed to building 100 new GP practices and refurbishing 150 more which would be most welcome as some GP Practice’s buildings are not fit for purpose. The interesting point will be what that means for the Practice’s themselves, will they have to contribute to any refurbishment and how will rent reimbursement be affected. For the new GP Practices will they be hoping to staff these practices with the increased workforce, or will they be looking to the local practices to support these new surgeries, in which case where will the funding come from to do so?

Expanding Pharmacy first has been mentioned by both the Conservatives and the Lib Dems, it was only introduced at the end of January 2024 so is it too early to say if this scheme is working and what the actual impact to GPs is?

The pledges made by each party are generally very similar, but the key will be how they will be implemented and how they will work in reality. They have all recognised how important the NHS is and that improvement to our healthcare system is vital to secure its future.

BMA’s 5 vital points

The British Medical Association (BMA) have stated in the Association’s own manifesto that the incoming Government must:

Value the vital role doctors play across all health services and restore their pay.
Protect doctors from any further erosion of their professional role and employment rights.
Train and provide jobs for the next generation of doctors needed to meet demand.
Fund the services needed for the future of the health service.
Safeguard the public’s health and wellbeing, prioritising preventative care. Patients need doctors.

BMA further emphasise that: ‘Every day doctors have to deal with the legacy of funding failing to keep pace with demand, cuts to services across the board, and the distress of working in a broken system – knowing they cannot provide the level of care that patients deserve. The next Government cannot allow our health services to continue this way: all parties must make the health of all their top priority, so we can give the public the care they deserve.’

This reflection from the BMA should resonate clearly with all those within the healthcare industry. It is not enough for The Government to simply propose these pledges without thorough consideration as to how the plans will be achieved and maintained whilst still maintaining high levels of patient care. The BMA stress the necessity of maintaining and enhancing the staff and services we already have as ‘if there are no doctors, there will be no healthcare.’

The next month will provide a great deal of insight as to how the challenges facing the UK’s healthcare system will be addressed and we will provide detail accordingly once the election results and policies are released. Should you have any questions regarding anything in this article or wish to discuss how any of these changes may impact you, please contact one of our Price Bailey experts.

May 2024

April and May have provided an array of changes as a result of action and discussion following the Spring Statement. April sees the start of the new financial year too which is always a busy time, and this year is no different as we see some important financial changes being implemented for GPs and the NHS. In this edition we detail the latest concerning property, basis period changes, IR35 and proposed NHS reforms in the event that a Labour government is elected in the next general election.

Property

The 2024 Premises Costs Directions

This month we transitioned into the updated 2024 Premises Costs Directions (PCDs), which provide guidance to NHS England on the provisions of premises funding to GP practices in England. The 2024 Directions replace the 2013 Directions and take effect from 10 May 2024.

The impact of the 2024 PCDs is still unknown, however, below are details of some changes that are worthy of discussion:

Priority funding projects are no longer restricted to a minimum of 33% and a maximum of 66% funding, the acquisition of development land (as well as premises) is expressly mentioned, and fit-out works and improvements to premises required due to regulatory changes are now provided for. In principle, funding should be accessed in more situations, which will greatly benefit many practices.
The ability for an ‘appointed valuer’ (defined as a suitably qualified professional registered with the Royal Institution of Chartered Surveyors, RICS) to conduct valuations for NHS England, previously exclusively handled by the District Valuer Service, should alleviate the considerable delays in the approval of funding applications.
GPs can now apply for grant funding of up to 100% of the project value.

Changes likely to be less welcomed by practices:

Applications for notional rent and rent reimbursement include a condition that contractors must inform NHS England of their acceptance or rejection of the funding assessment within 12 weeks. If they fail to do so, NHS England is unable to proceed with the payment.
New information has been provided regarding the amount of rent reimbursement available for leasehold premises and the process for submitting a rent reimbursement application. This may lead to delays in decision-making or changes in the reimbursement amount. Additionally, NHS England and ICBs are prohibited from directly negotiating with landlords about rent determination, which may not be favourable to landlords.
Alongside the expansion of grant funding, NHS England must now consider a wider range of factors. Their authority to reclaim funding has been increased, and the timelines for repayment and abatement have been extended.

With the changes to 2024 Directions brings uncertainty for many and their will no doubt be a period of getting accustomed to the changes after so many years following the 2013 Directions. No additional funds have been announced for the ICB budget lines, meaning it is unlikely GPs will have any new resource and GP surgery premises will not change.

Practice property loans and interest rates

Still concerning property, the topic of interest rates in the sector has been sparking conversation. The state of the market in 2024 is still tainted with uncertainty, however the return on investment has begun to rise again after a turbulent few years. The demand for property in 2023 decreased due to rising interest rates and inflation. When interest rates increased however, property valuations were unpredictable and the cost of borrowing increased, therefore many GP partners looking to buy in could not afford to buy in. Some outgoing partners are having to wait longer for their property payment and the valuations are causing concern where they may have dropped.

After recently attending an ICAEW conference where property was discussed, the consensus was that this year, interest rates are set to decrease, valuations have already come down (10-15%,) and the return on investment has increased. The return is set to be higher than the cost again and the demand is beginning to bounce back.

Despite these positive glimpses, it is still more important than ever to consider loan type, repayment plans and repayment length. It is important to thoroughly consider the length of repayment and locking in the interest rates on a loan in the event that interest rates could decrease.

Basis Period Changes

Currently, partners in GP practices pay income tax on their share of profits for the accounting period ending in the tax year of assessment – this is known as the current year basis. So, if you have a 30 April year-end, for the tax year 2022/23 (ending 5 April 2023), a partner will be assessed on profits from the financial year ended 30 April 2022. This causes a delay in the tax being paid compared to a year end that runs in line with the tax year. If your practice reports to 31 March (or 5 April) each year, you are not affected by the basis period changes.

Moving forward all partners will be taxed on profits that arise in the period 6 April to 5 April the following year – this is known as the tax year basis. The practice year-end will no longer be relevant for the taxation period. The change to a tax year basis came in from 6 April 2024 and will impact the 2024/25 tax year reporting. The 2023/24 tax year, which started on 6 April 2023 is a transitional year and will be subject to special rules.

For some partners, these transitional changes will see tax payments increase considerably in 2023/24 and payments on account for 2024/25 also. Careful planning will be needed to ensure partners can meet their obligations as there are no additional drawings or increase in practice profits to support these payments as it is in essence a catch-up exercise.

A question that arises from this basis period change is: ‘Should we change our practice year-end?’ With the NHS year-end aligned to 31 March, a move could be a good option. For practices that do change, a set of accounts will be prepared up to 31 March 2024. For those that do not, accounts can continue to be prepared as normal and it will be for the practice accountants to apportion profits from those accounts into the relevant tax year.

For a practice continuing with a year-end date falling later in the year, the date of accounts finalisation needs to be considered. Accounts would ideally need to be finalised in advance of the following 31 January, to apportion profits from two accounts years, for purposes of the relevant tax returns. If this is not possible, estimates can be used but they will need to be revised and finalised at the earliest opportunity. Using estimates will possibly cause uncertainty with tax payments as figures are finalised and payments are updating, including payments on account.

IR35 changes

A significant change has been added to IR35 regulations effective from April 6 2024. Some healthcare professionals provide their services via Personal Service Companies (PSCs) meaning IR35 changes must be complied with. The key changes are that:

HMRC will now consider taxes already paid by workers and intermediaries when assessing PAYE liabilities for deemed employers.
This approach aims to distribute liability costs more fairly between workers and deemed employers.

We expect individuals providing services through intermediaries, such as PSCs may see reduced PAYE liabilities, and should mean a fairer tax system as taxes already paid by workers are acknowledged.

Recent Announcements

The potential of a Labour Government

This week, Labour have released their five mission points in preparation for their full manifesto. One of the mission headings is NHS and concerns ‘getting the NHS back on its feet.’ Should Labour come into parliament, the NHS will be at the forefront of their missions and are preparing for building an NHS for the future.

Some key takeaways from their mission statement (full details of their proposals can be found on the Labour website link above):

‘As an immediate priority, Labour will grip the biggest crisis in the history of the NHS, tackling the massive waiting list backlog. We will do this by getting the basics right and then undertaking the long-term reforms to make sure the NHS is fit for the future.

Faster NHS treatment delivering two million more appointments a year by paying NHS staff more to work evenings and weekends.
Fewer cancer deaths by improving early diagnosis for cancer by doubling the number of NHS scanners.
700,00 more urgent dentist appointments.
Fast access to mental health services by recruiting 8,500 new NHS mental health staff.
Return of the family doctor by cutting red tape so that patients can see the same GP each appointment if they choose to.’

We await the full Labour party manifesto to see how these changes will develop and more detail can be provided, however the proposed NHS changes and funding will be welcome by many in affected industries should we see a Labour government return.

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.