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What will happen to GP premises from April 2013?

John Hearle looks at how premises funding in England will change after CCGs take the reins on 1 April 2013.

Development projects may be delayed while new procedures are set up (Image: iStock)
Development projects may be delayed while new procedures are set up (Image: iStock)

On the brink of 2013/14, it is still not entirely clear who in the new NHS will be responsible for what when it comes to GP premises and whether the rules covering reimbursement and surgery building projects are changing.

What is already known

Detailed information is still to come but so far:

  • The NHS Premises Costs Directions 2004 relating to new premises development and rent reimbursement will continue although they are being updated to take account of the NHS changes.
  • Many of the PCT staff that practices used to deal with in relation to rent reimbursement and new property development advice will be around still, although no longer PCT employees.
  • A lot of the property-related PCT personnel are transferring to NHS Property Services Ltd (the ‘PropCo’ company set up by DH) where they will continue to advise on rent reimbursement and development, but only as an agent for CCGs or the NHS Commissioning Board (NHSCB).

Biggest potential problems

The problems are most likely to be cash flow ones, certainly where you are a leaseholder and due, under your lease terms, to make full payment of rent on the March quarter day

Many PCTs had systems set up so that paying rent was seamlessly linked to receiving reimbursement but, with new authorities in place, this may not be so efficient. Over the first few months reimbursement could be delayed GPs out of pocket.

PCT-owned premises

Where GPs occupy property owned by PCTs, in the past there were few concerns over rental payment, service charges and so own. PCTs’ attitudes were often that there was no point in setting up a lease and charging rent only to reimburse the same amount to the practice.

These properties are transferring to NHS Property Services which will operate as a commercial property company and put in place proper leases, charge full rents and service charges. The rent element should be reimbursed, but practices will have to bear the time, effort and legal costs of agreeing lease terms and conditions.

Instead of paying service charges for internal repairs, practices will also be taking over responsibility interior upkeep and having to pay the full commercial costs for this under a lease.

Notional rent disputes

GPs disputing the level of rent reimbursement, or wishing to do so, will be in the dark about the procedures.  

When the district valuer had stated their opinion of the current market rent on which notional rent is based, and this was challenged by the practices, PCTs had local dispute resolution procedures to in place.

Only if local dispute resolution had failed, could the practice ask the NHS Litigation Authority to determine a final settlement.  

But there are no arrangements for taking over PCT’s local dispute resolution procedures from 1 April.  The best assumption is that NHS Property Services will continue to administer PCTs’ systems, but the ultimate responsibility and funding of rent reimbursement will lie with the NHS Commissioning Board (NHSCB).

So any local dispute resolution procedures will need NHSCB authorisation. As such a process does not currently exist this might mean substantial delays in rectifying incorrect notional rent.

Future premises developments

The current understanding is, that for practices which have successfully applied for property development approval or improvement grants, full details of those commitments should have been passed by PCTs to the CCGs and NHSCB, thus securing the funding.  

Doubtless there will be hiccups but hopefully the administrative change will not bring down any already agreed scheme.

Those projects still in the early design and specification stages and not formally submitted to PCTs are less likely to carry over.

Also, how will proposed new developments where the site may be subject to negotiation and project is being sketched out fare in the new administration? Presumably the old PCT procedures and approval methods will fall to one side. How will NHS Property Services achieve sign-off? Or even know what can and cannot be funded?

Possibly an awful lot of work will be needed to put new procedures in place to both reappraise the existing situation and to work out what budgets are available.

Setting up such procedures could take many months and ultimately cause a lot of delay. I predict a marked reduction in new projects during the remainder of 2013 and the beginning of 2014.     

  • John Hearle is head of healthcare at Aitchison Raffety and Medeconomics’ premises expert. To ask John about your premises issues, click here.

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