Dozens of GP practices in Scotland say they are at risk of collapse after the Scottish Government suspended an interest-free loan scheme which has provided vital support for the cost of running surgeries.

A survey carried out by BMA Scotland found that 30 practices considered their position as “precarious” following the pausing in March of the GP Sustainability Loan Scheme.

At the time, the Scottish Government said the initiative - introduced as part of the Scottish GP contract in 2018 to reduce the financial risk for GP partners of owning premises - was "currently oversubscribed".

Health Secretary Neil Gray blamed "significant reductions" in UK Government funding for the suspension.

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Of the 30 practices describing their situation as precarious, six said it was likely they would have to hand back their contract – meaning health boards would take over the running of the practice.

As well as being more expensive for taxpayers, this can also lead to practices eventually being sold off to corporate chains, merged with neighbouring surgeries, or patients being dispersed among other practices in the area - all of which can reduce continuity of care and make it harder for patients to get an appointment with a doctor.

It can also trigger a "domino effect", making these practices more likely to fold as patient demand increases without a commensurate increase in available staff - leading GP partners to quit.

GPs who responded to the survey commented that they have been “left in limbo”, that it is “hard to see how we can survive” and say they feel “deeply disappointed and let down” by the Scottish Government’s decision to pause sustainability funding.

Others said that they may be forced to make staff redundant from GP practices to cope with increasing overheads, and that "we fear we will not be able to attract new partners and that the existing partners may leave".

More than eight out of ten of respondents – 47 out of 55 - said that if they did receive the loan it would considerably improve their stability.

No respondents said that contract termination would be likely if the funding was in place.

The Herald: The loans, introduced in 2018, were intended to reduce the risk for GP partners of owning practice premisesThe loans, introduced in 2018, were intended to reduce the risk for GP partners of owning practice premises (Image: Getty)

Under the scheme, GPs who own their own premises can apply for long-term interest-free loans worth up to 20% of the practice’s value, which is only repayable when the building is sold or converted to non-medical use.

Health boards are also given first option to purchase the premises, with one of the aims of the scheme a long-term move to a model where GPs are not required to own or provide their own property.

It is also aimed at easing the financial burden of owning a practice, reducing some of the up-front costs GPs can face when joining a practice and in turn improving recruitment and retention.

The Government has so far issued £11m of loans to 45 practices, but there are a further £3.5m of loans to 16 practices currently under consideration for which funding needs to be found. 

In a letter to practices earlier this year, the Government said it was "temporarily unable" to process any further applications for sustainability loans due to a "greater than anticipated number of loans having completed this year, with the result that our budget for loans is currently oversubscribed".

Stress over financial liabilities has been blamed for a decline the proportion of GPs becoming "partners" - practice owners - in favour of working on a salaried basis instead, where they are employed by practices without having a financial stake in it. 

The Herald: The proportion of GPs who are partners ('performers') has been decliningThe proportion of GPs who are partners ('performers') has been declining (Image: PHS)

The trend - which is occurring UK-wide - raises questions about the long-term viability of the independent contractor model. 

Dr Andrew Cowie, Deputy Chair of BMA Scotland's GP Committee, said: “We have been hearing many concerns from GPs over the pausing of the sustainability loan scheme; and this alarming survey reveals the huge impact even a short delay may have on practices that are already under pressure with inadequate workforce and resource to meet the needs of the communities they serve.

“The scheme provided vital support to ease the financial risks of owning GP premises and increased the stability of practices, improving recruitment and retention of GPs.

“Indeed, the Scottish Government said in 2019 it would contribute to its commitment to increase the number of GPs in Scotland by at least 800 over the next decade.

“But the decision by ministers to now pause sustainability loan applications will destabilise surgeries and put at risk quality and continuity of care in many places. In some case it may even see practices close.

“Owning a practice can make it difficult to replace retiring partners and the inability to recruit a new partner makes collapse and contract termination much more likely.

“We are in the middle of a medical workforce crisis and GP shortages mean there already are not enough GPs to meet the needs of the people of Scotland.

“Scotland has lost around 100 GP practices over the last ten years - and it is clear we cannot afford to lose even one more.

“The Scottish Government must restart the loan application process immediately before it is too late.”

Scottish Labour health spokeswoman, Jackie Baillie, said the Scottish Government was "pulling the rug out from underneath GPs" by suspending the loan scheme.

She added: “We cannot have more and more Scots missing out on vital medical care due to the SNP government’s disastrous stewardship of our NHS."

Dr Sandesh Gulhane, a GP and health spokesman for the Scottish Conservatives, said pausing the loans had been a "hammer blow" for practices. 

He added: "It will be rural practices – as well as those in deprived areas – who will be most at risk of closure if this scheme is not restarted.

"Rather than passing the buck to Westminster, the SNP must reverse this deeply damaging decision and ensure this uncertainty for practices ends immediately.”

A Scottish Government spokeswoman said it "greatly values" the contribution of general practice and intends to resume the sustainability loan scheme in 2024/25 "once we have completed the disbursement of funds for those loans already completed and confirmed a budget". 

She added: "This will likely not be until midway through the financial year.

“Our preference remains to continue the loan scheme into Tranche 2 and beyond – however, this will depend on whether the UK Government resumes the allocation of Financial Transaction Capital to the Scottish Government.”