How NHS doctors are causing the GP recruitment shortage

The following is an extract from our white paper on NHS reform, which was published on 3rd July 2024

We hear routinely about the shortage of Doctors in our health service being one of the main reasons for the lack in availability of GP appointments. However, this shortage is not as pronounced as they would have you believe. The sad truth is that many Doctors are gaming the system for their own financial benefit, and adding a huge amount of financial pressure to the NHS budget in the process.

What many Doctors have realised is that, as an employed GP in the NHS, you can earn a gross salary of £100,000-£130,000 a year, at the top end. This equates to between £48.00 - £62.50 per hour, which is a decent wage by anyone’s standards. However, working as a self-employed GP, these same doctors can charge up to £150 an hour. So, what many have been doing over recent years is signing a part-time NHS contract to work 2-3 days per week, in order to qualify for enrolment in the NHS pension scheme, and benefit from taxpayer funded pension contributions. They then spend the rest of their week working in a self-employed capacity, moving around different GP surgeries and hospitals wherever there is a shortage in that week, and charging extortionate hourly rates for their services.

What this means is that there are not enough full-time doctors in the NHS to meet the demand, and the majority of NHS Trusts in the UK have become increasingly reliant on the self-employed market to fill the gaps in their clinical rotas. They are effectively being held to ransom by these GPs, who have collectively created a staffing shortage in their own industry, and who then offer themselves as the solution to the very problem that they have created, but at grossly inflated cost.

Quite how such a scandalous approach to care has been permitted to perpetuate in this country for so long is a mystery. Instead, we hear endlessly about NHS staffing shortages, how our GPs are so overworked and under-appreciated, and how the NHS is chronically underfunded and everything is the Government’s fault.

Now in the interest of balance, it should be noted that there are indeed a lot of hard-working Doctors in this country, who work full-time in the NHS, working long hours and driven by a real passion for delivering top quality care to patients. However, these symbols of morality and dedication within our healthcare system are increasingly becoming the minority.

The media in this country are never willing to expose the truth at heart of the issue, which is that the Government and the taxpayer are being held to ransom by a large group of Doctors who are circumventing HMRC legislation intended to prevent this immoral behaviour, and putting their own finances above the interests of the NHS and the taxpaying public.

In some cases, we are aware of GPs who work Monday to Wednesday in a surgery as an employed member of staff on a 3-day a week NHS contract. They then spend Thursday and Friday working at that same surgery, in exactly the same capacity and doing exactly the same work, but on a self-employed basis at a cost of £120+ per hour. Instances such as this can be allowed to continue for years on end, without the IR35 status of the doctor ever being questioned.

How can a member of staff be classed as a temporary worker, and in doing so avoid the obligation to pay tax as an employed member of staff, when they work in the same role at the same place of work for years on end?

The tax system is supposed to prevent this kind of thing from happening. The legislation is in place already, it is called IR35. The principle of this legislation is to determine whether a worker acting in a self-employed capacity is genuinely independent from the company they are working for, or whether they are effectively an employee who has chosen a particular employment status in order to reduce the amount of tax that they (and the company) have to pay.

It uses a number of tests to make this determination, and it is the employers’ responsibility to carry out these tests and make the determination on behalf of HMRC, and then to apply the correct tax status to the individual accordingly.

However, in the case of self-employed Doctors, the legislation is not working.

The problem is that employers (in this case hospitals and GP surgeries) are so heavily reliant on the self-employed market at present, that they are too scared to make an IR35 tax status determination that is unfavourable to the Doctor. This is because if they do so, they run the risk that the Doctor will simply refuse to work for that surgery, and will instead present themselves for shifts at a competing surgery. Demand for GP appointments are at a level where there are always shifts to fill and appointment slots available. The pressures to ensure that clinical rotas are filled so patient appointments don’t have to be cancelled is so great, that NHS employers are giving favourable IR35 assessments to their self-employed GPs in order to keep them happy.

This goes entirely against the principle of a fair tax system, and the result is that the GP recruitment shortage perpetuates, as there is no disincentive to Doctors from continuing with this immoral behaviour.

The gaping hole in Labour’s NHS plans

Labour have committed to delivering significantly more NHS appointments, with their election manifesto stating:

“In England Labour will deliver an extra two million NHS operations, scans, and appointments every year; that is 40,000 more appointments every week during evenings and weekends, paid for by cracking down on tax avoidance and non-dom loopholes.”

They claim that this policy is “fully costed and fully funded”. However, I can’t help but feel that they have made a significant oversight in their assumptions and costings behind this policy. The reality is that all of these appointments, which they have said will take place during evenings and weekends, will NOT be conducted by NHS employed clinicians and GPs.

Our employed doctors have been claiming forever that they are overworked and underpaid. It is difficult enough to get an employed doctor to work a normal Monday to Friday 9-5, as already stated. They are simply not going to be prepared to work additional hours at evenings and weekends. This means that all of these additional appointments will have to be provided by these locum and self-employed doctors charging extortionate hourly rates, which will be even higher when asked to cover these so-called “unsociable hours” shifts.

That is before we begin pulling at the assumptions factored into their costings for the revenue they expect to be generated by closing non-dom tax loopholes, which per the party manifesto they claim will raise £5.23bn a year. This figure assumes that all of those individuals Labour plan to target through these changes will willingly accept the additional tax burden to be levied on them. This is an incredibly naïve presumption to make.

These individuals are vastly wealthy and often have residences in multiple countries. They are incredibly globally mobile, and if the UK government tries to tax them too much, they will simply up-sticks and remove themselves from the UK. So the reality is that, far than providing a funding mechanism for Labours NHS plans, their tax policies in respect of non-doms are actually likely to lead to a net reduction in tax revenues to the Treasury.

The solution

The only way to fix the problem is to overhaul IR35 legislation. The criteria for being assessed as genuinely self-employed must be made much stricter, and punishments for employers who deliberately make false IR35 determinations, or who ignore the result of the determination altogether, must be harsher, to discourage this circumvention of the legislation.

It may be that an altogether new piece of tax legislation, targeted specifically at self-employed healthcare workers is needed. The core changes from the current IR35 criteria must include:

• The NHS must be treated as a single employer, rather than each individual GP surgery being treated as separate employers.

• A limit to the number of hours or shifts that a self-employed GP can spend at a single place of work (e.g. an individual hospital or GP surgery) before they are classed as an employee of that surgery.

• Increase in the minimum number of hours that GPs must work in an employed role in the NHS in order to qualify for enrolment in the NHS pension scheme.

• Powers of employment status determination to be passed back to HMRC, and taken out of the hands of employers.

• A cap on the hourly rate of pay that a self-employed GP may charge an NHS Trust, to be no more than 125% of the average hourly pay rate for an equivalent employed GP at the same level.

• Greater powers of enforcement granted to HMRC to investigate and hold to account self-employed GPs and their employers, with stricter punishments for those found to be deliberately acting to circumvent the legislation.

By taking away the significant incentives to work in a self-employed capacity, Many GPs will choose to go back to the NHS in a more full-time capacity in order to enjoy the benefits that employment status brings. We must make it more attractive for Doctors to be employed within the NHS than to operate as self-employed. By beefing up IR35 legislation this can be achieved, and the GP recruitment challenges of recent years can be tackled.