This update is regarding the second Tranche of PCSEs Reconciliation of Seniority Payments made to practices, relating to financial year 2016/17. Tranche 1 related to financial years 2017/18, 2018/19, and 2019/20.
We can confirm PCSE is not now seeking to undertake a reconciliation exercise for financial years 2013/14, 2014/15 or 2015/16. A very small number of practices may receive further communications in future about the Tranche 1 years.
As some colleagues will recall, Seniority Payments were made to partner GPs only and were based both on their length of NHS service and received profit. The Scheme closed to new members on 1st April 2014 and was then phased out over a six-year period to March 2020. These annually released sums were diverted into Global Sum.
Seniority payments were based on thirds of average partner income, with no payment being made if a partner drew under a third of average income, 60% between one-third and two thirds, and GP partners receiving over two thirds average income receiving a full payment. Payments were made quarterly, based on an interim estimate of Seniority entitlement. The actual entitlement depended on the publication of each year’s Final Seniority Factor (FSF). There was always a significant time lag in the FSF being calculated. The FSF for 2016/17 was published on 9th April 2020.
Because the actual entitlement to Seniority Payment, and the sums involved, can only be known once the FSF is known, this can mean there have been potential over and under payments to partners within practices in each year. It is on this basis, that an interim payment has been made, and a reconciliation payment can now be calculated. This is in line with Statement of Financial Entitlements (SFE) Paras 25.6 and 25.7 (from the SFE 2013).
Only affected practices will receive emails from PCSE: if either an overpayment or an underpayment has been made, practices will be advised of this with a balancing payment planned for the August 2025 pay run. However, as for Tranche 1, if a practice believes such a deduction would cause financial difficulties, a phased deduction can be requested. The LMC will alert ICBs to the possibility that practices may apply for this and ask them to support it. PCSE, following discussions with GPC England, have prepared information about this process and a more detailed financial breakdown is also available to all affected practices on request, whether a payment or deduction is being made. The link to do this is available in the FAQs below.
Practices can challenge the financial information provided by PCSE, and, in such cases, this will be reviewed before any payment or deductions are made.
Mechanisms to challenge or request a payment plan
As with Tranche 1, GPC England is concerned that because of the further time that has elapsed, these adjustments may relate to GP partners who have now retired, left the practice, or are possibly deceased. They may also relate to practices that have now merged or closed. GPC England does not believe practices should be contacted about partners who have now retired, or former practices who no longer have a contract because they have closed. Practices may challenge their calculations for these reasons.
Practices should advise their accountant of any information provided by PCSE; however, in many cases, the sums involved may be small and any professional costs should be taken into account so as to ensure this is a value for money exercise.
GPC England has carefully considered the regulatory and legal justification for PCSE to undertake this Tranche 2 exercise. Given the SFE clauses noted above, and the timing of published FSF figures, GPC England has concluded that no legal challenge is feasible. GPC England also believes the transactional costs associated with this exercise, and the further deduction of funds from General Practice which will result from it, are entirely inappropriate.
If colleagues have any queries about this reconciliation exercise please contact the LMC Office.