Premises

2017 Update: Advice over increase in NHSPS non-reimbursable costs

Any practice experiencing unexplained, unwarranted and unreasonable increases in NHSPS non-reimbursable costs are advised not to pay the disputed increases but to make payments at previously agreed rates, as we are officially in dispute with NHSPS over these charges.
Our colleagues at the GPC are taking this up for LMCs at a national level and are gathering examples across the country of such increased charges to push for national resolution on this. We would be happy to forward any practice examples to them.
We also advise that while these charges are in dispute that no practices sign a new standard NHSPS lease and potentially unwittingly accept the raised costs – this overcharging needs to be sorted first.
If practices are approached to do so and want support to deal with NHSPS then please let us know at the LMC – we are having conversations with NHSPS over the new leases.

  • GPs have traditionally been responsible for the provision of their practice premises but in recent years a number of other models have been used more often.
  • Borrowing costs (previously known as ‘Cost Rent’) reimbursement, notional rent and improvement grants have been pushed into the background as Primary Care Organisations (PCOs) have endeavoured to group individual practices and practitioners together into larger purpose-built buildings using third party developers involved in LIFT and PFI or other financing models. The effect on practice finance can be substantial because third party landlord management and service charges can be much higher than previously experienced before a move.

This BMA guidance summarises the risks and benefits for GPs associated with different models, and concludes that GPs should continue to have the option of investing in their premises although some may find other models more suited to their needs.

Premises Costs Directions 2013

The interim Directions were published by the Department of Health in 2013 but a number of areas that could not be resolved during negotiations are still being discussed by the GPC and NHS England. The reason for the publication of interim Directions was to remove any doubt about the ability of Area Teams to continue existing payments from 1 April. Some key points were:

  • Initial rent reviews for 15 year notional leases will act as a benchmark and reimbursements will not drop below this level during the term of the lease.
  • All existing reimbursements have been retained, including for legitimately incurred VAT charges and stamp duty land tax (SDLT).
  • For premises improvement grants costing up to £100,000 + VAT, notional rent abatements for new space will only last for a period of 5 years (as opposed to the DH’s original proposal of 10 years) (grants costing up to £100,001 – £250,000 + VAT = abatement for 10 years; Above £250,000 + VAT = abatement for 15 years.)
  • Practices will be able to apply for improvement grants to meet minimum standards (listed in Schedule 1, page 25).
  • The amounts payable in relation to leasehold premises ‘must be adjusted to take account of appropriate additions in respect of… the value of any responsibility of the tenant in respect of external repairs and maintenance, or for insurance of the building’.
  • A rent review memorandum for leasehold premises, signed by the landlord and the contractor, recording the change in the level of rent charged, will be used by the District Valuer when carrying out rent reimbursement reviews on behalf of the Board (should help to keep rents in check).