Advice for practices facing increased property service charge

NHS Property Services

Andrew Pow of Hall Liddy offers advice for those being asked to sign new lease terms with increased costs

Across the country, many GP practices occupy premises which were transferred into NHS Property Services Limited, a stand alone NHS company. One of its aims was to put property terms on a more commercial basis but unpicking historic local agreements, often with little documentation, has proved problematic.

Since April 2016 many practices have received notification that their service charges were increasing, some by amounts which threaten to put the practice at risk.

Central Lakes Medical Group in Cumbria is one of them. Service charges on its Ambleside premises have been around £20,000 historically but in April 2016 it received demands for a new charge of £50,000 per annum.

Dr Kaye Ward, a Partner at the group, explained: “We were already struggling locally from significant cuts to the Minimum Practice Income Guarantee which has required a local reconfiguration of services. To be hit with an unanticipated cost increase would destabilise plans further. The breakdown of the charge for 2016/17 bore no resemblance to the previous year’s and, despite requests for back-up information and many meetings, we are still no further on with resolving what is due.”

The problem is not unique – we are seeing similar cases across the country. Practices are receiving random demands at a time when resources are thin on the ground and many are being asked to negotiate new lease terms locking in these increases.

Practices therefore need a strategy to deal with this uncertainty. A plan should include the following:

¬ Do not pay any increase in charges until the NHSPS has provided evidence of the cost breakdown and also shown that your practice is responsible for those costs, with documentation to prove what has been agreed previously.

¬ Speak to Commissioners to ascertain if subsidies had previously been given for facilities management costs and if so, what happened to that funding.

¬ Engage with the LMC. Nationally the BMA have been raising this issue with NHS England. Locally the LMC may be aware of what is happening in other practices.

¬ Do not sign or agree to any lease terms without legal representation. Ensure leases have adequate break clauses to deal with emerging models of care. Practices should not be responsible for rectifying historic premises defects unless existing leases require them to do so. Take photos of the current state of premises and any defects and make the landlord aware of them prior to signing the lease.

¬ Do not agree to any future service charge increases set out in any lease unless financial projections have been prepared to show they are affordable. Most GP practices operate in partnerships with unlimited personal liability. GP Partners should not expose themselves to the risk.

Dr Ward comments: “We continue to fight this. An increase of £30,000 is unaffordable without cutting access to clinical services. At a time when General Practice is being asked to do more, it cannot be justifiable for one area of the NHS to implement policies which cause access to services to reduce.”

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