GP practices across the capital are facing increasing financial pressure, with some in danger of closure, one of the UK’s leading medical accountants has warned.
Vijay Acharya, whose firm has supported GP practices since the inception of the NHS in 1948, says that while practices continue to deliver excellent clinical care, many now operate with very limited financial headroom.
“Most practices are working within much tighter margins,” he explains.
“Partners want to focus on patients, not spreadsheets, yet the financial environment is becoming more complex each year.
“Rising staffing costs, pension and national insurance contributions, estates pressures, inflation, and increased administrative demands all contribute to this squeeze. The system expects GPs to deliver clinical excellence while simultaneously running what are, in practice, small businesses, often without dedicated financial training.
“The time partners can devote to understanding accounts, funding flows and longer-term planning is incredibly limited.
“This isn’t a criticism of GPs. It’s a sign that the operating environment has outgrown the original model. The pressure is just increasing and increasing.”
According to the Royal College of GPs, nearly 1,000 practices have closed or merged since 2018 while the registered patient population has grown by 4.8 million.
Mr Acharya warned that the way NHS funds now travel through multiple layers; Integrated Care Boards, Primary Care Networks and Federations, is distancing money from the frontline and placing practices at risk.
“Practices are increasingly reporting that significant top-slicing occurs before funds reach them,” he said. “By the time money moves through ICBs, PCNs, Federations and administrative layers, the amount that arrives at the practice can be materially reduced. This directly restricts what practices can reinvest into patient care.”
He highlighted growing concern about delays, opacity and diversion of funding intended for practices.
He added, “When practices cannot rely on funding reaching them cleanly, on time and in full, they cannot recruit, retain or plan. The financial challenge is not just the quantum of funding; it’s the consistency and integrity of the flow.”
Mr Acharya also pointed to the longstanding issue of the NHS capitation funding formula. Although a review is underway, he said that the sector has heard this “for almost 20 years” without a meaningful solution emerging.
“Any credible reform must address the outdated weighting mechanisms that disadvantage inner-city, deprived and high-needs communities,” he says. “Negative weighting is particularly problematic and bears little resemblance to the workload and complexity modern practices face.”
He argued that a resolution to the capitation formula is essential for addressing chronic workload imbalance and securing the long-term sustainability of practices serving diverse and complex populations.
To improve resilience, Mr Acharya said GPs need more structured financial support throughout their careers.
He concluded “Introducing financial training is not about turning GPs into accountants.
“It’s about giving them confidence in the business side of practice so they can continue delivering high-quality patient care sustainably.”
“Doctors are committed to serving their communities. We should be equally committed to ensuring they have the financial understanding, support and fair funding structures needed to run resilient, successful practices.”
