How Is The LMC Funded?
The LMC is an independent body, paid for exclusively by GPs themselves through a levy of their remuneration. This is known as the ‘statutory levy' for GP practices (for whom it is mandatory) and the ‘administrative levy' for PMS practices (for whom it is voluntary). It is based on an amount per patient calculated to bring in sufficient income to cover the running costs of Nottinghamshire LMC Ltd. Practice mandates obtained in 2004 authorised the LMC to increase levies on an annual basis by an amount equivalent to NHS inflation.
Click on the highlighted links to view the 2010-11 accounts for Nottinghamshire LMC or for Practice Support Services (PSS).
The (national) voluntary levy
In addition to the statutory/administrative levy, which is used exclusively to fund Nottinghamshire LMC Ltd, the LMC also collects, from those agreeing to pay it, a political levy, which is paid to the GP Defence Fund and covers the work of our national negotiating committee, the GPC. This is known as the ‘voluntary levy'. The rate per patient we are obliged to pay is set by the Defence Fund. The LMC is, however, entitled to use any excess collected to defray the administrative expenses of Nottinghamshire LMC Ltd.
Tax status of levies
LMC levies are a fully tax allowable expense. This not only reduces the direct cost to the practice, but as LMC levies form part of expenses sampled by the Department of Health/BMA's Technical Steering Committee, will contribute, albeit in a small way, to any future increases in global sum payments.
Additional Income
Anxious to keep levy payments to a minimum, Nottinghamshire LMC Ltd has actively sought to defray its running costs by seeking reimbursement from PCTs and other bodies, of the expenses paid by us to GPs who have done work on their behalf, and by generating income through our ‘for profit' subsidiary, PSS (Practice Support Services (Nottinghamshire) Ltd). PSS earns income from:
- Payments for Secretariat services to other LMCs
- Payments from PCTs or pharmaceutical companies for consultancy or project management work
- Commercial sponsorship of conferences, seminars, etc
- Payments from practices for various ‘added value' services (see our Added Value Services section)
- Sale of LMC publications or advertising revenues
- Commissions from the LMC Buying Group
Practice Support Services
PSS is a wholly owned subsidiary of Nottinghamshire LMC Ltd. It was established in 2008 to ensure that income from non levy related activities did not compromise Nottinghamshire LMC Ltd's ‘non profit making' status. Nevertheless, Nottinghamshire LMC Ltd benefits from income from PSS in the form of staff cost recharges, and dividends. Copies of its accounts are available on request, or can be viewed on the Companies House website. The Directors of Nottinghamshire LMC Ltd constitute the Directors and Members of PSS. Chris Locke is the Company Secretary of both.
The Buying Group
The costs of running the Buying Group and the Federation, including the work done by Nottinghamshire LMC Ltd's staff, is paid for by PSS out of commissions on business enjoyed by Buying Group approved and accredited suppliers. These commissions are divided with the Buying Group's procurement consultants, Burns Associates.
