Kwarteng’s Booked An Emergency Appointment For The Economy
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- Published: Wednesday, 21 September 2022 10:42
- Written by Guy Tuggle
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As the sun sets on the State Funeral and people returned to their workplaces, schools, clubs and social groups, the small talk was inevitably about how moving the previous 24 hours had been and yes, how brilliant the UK is at executing such events. Nobody, it seems, does it quite like us.
Tuesday morning saw dental teams return to their surgeries and, as their reception teams opened the ‘phone lines in many cases to a pent-up torrent of incoming calls seeking ‘emergency appointments’, it was back to work with a bang and the realisation that whilst the monarch has changed, dentistry is stuck exactly where it was before the extended weekend.
Many practice owners will have struggled to relax over the Bank Holiday weekend, tossing and turning in their beds as they grapple with the challenges facing them.
The new Chancellor of the Exchequer and his Cabinet colleagues are also likely to have struggled to get a peaceful night’s sleep. Because the UK’s economy, like dentistry, is in a deep crisis. And much of the solution to the latter’s crisis rests with how the government approaches the former. The economy.
Budgets used to be annual events, held in the springtime, always on a Tuesday. No more. Since the financial crash of 2008, Chancellors have made ad hoc ‘financial statements’ and ‘autumn statements’ when projections are made and taxes tweaked.
But so serious are the economic headwinds facing the UK economy, that the new Chancellor Kwasi Kwarteng, barely a fortnight in post, is to present what is effectively an ‘Emergency Budget’ this Friday, 23rd September. It will be closely watched by all, not least by the public eager for help with energy bills and rising prices that mean they are paying significantly more for everything from milk to second hand cars.
Dentists and practice owners are not immune from the turbulence. Amongst the concerns that keep them awake are
- As patients grapple with the increased cost of living they will cancel non-essential expenditure which will all too often mean fewer dental and hygienist appointments
- As interest rates rise, so practice owners with hefty mortgages and goodwill purchase loans will be facing steeper monthly repayments. At a time when income may be falling.
- Staff recruitment is so difficult it is causing practices to fold. Increasingly, recruitment ads are enticing Associates with a £14/15 net UDA rate and dental nurses with hourly rates that scratch £14-15.
- Dental practices are heavy consumers of energy. OK, so they don’t match chip shops with their mega-watt fryers, but dental premises need to be kept lit and warm and all surgery and decon equipment uses electricity.
- The tumbling pound makes imports more expensive. Most dental materials are imported from the EU.
So what does the profession want to hear from Chancellor Kwarteng? Cuts in corporation tax will help practices that are limited companies. Extending price subsidies on energy beyond the six months already trumpeted will add further help. And empowering the NHS to significantly increase contract values will help fund the kind of pay rises necessary stem the exodus of workers.
Unfortunately for the Chancellor, he is powerless to control interest rates which the Bank of England has to raise if it is to defend the value of the £ and bear down on inflation. And as mortgages, imported goods and holidays become more expensive, so consumer confidence will sap. All of which is bad news for many dental practices be they private or mixed. Consumer spending is predicated on confidence.
Iain Stevenson, Head of Dental at Wesleyan Group, the specialist financial services mutual, said: “Small businesses need help with running costs and dentists are no exception. Many practices are facing increasing costs due to the cost-of-living crisis, coupled with retention and pay increase considerations for staff, which are resulting in growing pressure on the bottom line.
“Measures such as tax rebates, new funding, access to affordable finance and reduced rates of VAT will all go some way to help address challenges. Furthermore, changes to the NHS contract in England are considered a significant improvement in how dentists are rewarded for the work that they do, and will ease some of the pressures within practices.
“When it comes to personal finances, dentists are struggling with rising costs. Any personal financial support such as additional help with energy bills will be warmly welcomed. Dentists will have a keen eye on what the Chancellor will announce in the coming days.”
Image: Chris McAndrew, CC BY 3.0 , via Wikimedia Commons
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