GP partners should be offered new legal structures to limit liability, says review
Different legal structures must be made available to partners holding GMS and PMS contracts to mitigate the risk of unlimited liability that partners face, according to the review of the partnership model in England.
The final report, published today, said there were ’significant opportunities’ to reduce the personal risk and unlimited liability that comes with being a partner and that the NHS must harness these in order to attract more GPs into the role.
GP partnerships holding an APMS contract are already able to operate under a variety of legal structures, but changes to primary legislation would be required for a GMS or PMS contract to be held by some alternative business models.
The report said: ‘There are significant opportunities to reduce the personal risk and unlimited liability currently associated with GP partnerships.
‘The Government should introduce the option of GP partnerships holding a GMS or PMS contract under a different legal model, such as limited liability partnerships [LLPs] and mutuals.’
But partnership review lead Dr Nigel Watson, chief executive of Wessex LMCs, warned it was still not clear how beneficial certain types of alternative legal structures were – and that the Government must therefore carry out a rapid piece of work in the next six months exploring the issues.
He told Pulse: ‘Many GPs say if we were only LLPs then that would solve all our problems because the nature of the current partnership means we are unlimited partners... [But] when you look at LLPs they are more complex to establish and dissolve, you have to publish your accounts every year on Companies House.
‘We’ve looked at the benefits and, for example, if you took out a practice loan, if you’re an LLP, partners in the LLP still have to give personal guarantee. So it doesn’t get rid of your liability.’
He also warned there was a possibility that if LLPs were introduced for partners holding GMS and PMS contracts, this could force contracts to go out to tender – meaning GPs may be at risk of losing them.
‘There is some conflicting legal advice where people say if you move from an unlimited partnership to an LLP then that contract has to go out to tender because of tendering rules,' he said.
Dr Richard Vautrey, BMA GP committee chair, said: 'As the review suggests, there isn't a simple alternative legal structure that could significantly limit liability whilst maintaining a partnership model, which is why the review suggests further legal opinions are sought to clarify this. We would not want to see practices' contracts put at risk of being time-limited and put out to competition.'
The report from the partnership review also recommended NHS England should make it easier for GPs to hand back their contracts without being liable for outstanding lease payments.
Leasing arrangements for practices are usually around 20 years in length and there ‘is significant concern from some GP partners that, if the practice resigned from their GP contract, the individual partners would still remain liable for the full term of the lease’, the report said.
The introduction of a ‘more comprehensive assignment clause’ in the GP contract ‘could allow the NHS to continue paying lease costs in agreed circumstances’ it added.
Dr Watson said that while NHS England currently offered this option – under premises costs directions rules – it was discretionary and in reality meant CCGs could say they were unable to afford the rent repayments.
Instead, he said NHS England should make it clear to partners that outstanding leases would always be paid for by the NHS, as long as the premises were ‘fit for purpose’ and still being used by the health service.
Dr Watson said: ‘Younger GPs are saying we’re not prepared to sign up to a 20-year lease because the future of the NHS in general practice looks uncertain. There are areas of the country where there are probably going to be less practices in the future.
‘We need more security for people singing up to a long-term lease – but those long-term leases, if they are going to be supported by the NHS, should be ones in premises that are fit for purpose.
Dr Krishna Kasaraneni, BMA GP committee executive team lead for premises, said: 'Problems with premises continue to be some of the most common issues raised with us by members, not least in terms of those around ‘last partner standing’ scenarios.
'Therefore, we would welcome a move such as this to reduce the risks for partners who lease their practice building. Overall CCGs must get behind struggling practices, and share the risk. This will instil confidence in the current model and hopefully encourage more GPs to take on partnerships.'
Separately, the review’s report stressed the importance of the Government’s plan to introduce a state-backed indemnity scheme from April, to attract more GP partners who are anxious about the escalating associated costs.
However, it warned the scheme should be introduced ‘without undermining the financial stability of a practice’.
Dr Watson said this was in response to prior concerns that the entire cost of the new scheme would be funded through existing core GP funding.
‘If the indemnity came in and the whole cost of it was covered by core GMS funding it would be a disaster because all partners would take a pay cut,’ he said.
While the review does not suggest how much money would be required to deliver its 23 recommendations, Dr Watson said additional funding coming from the NHS’s long-term plan, plus a redistribution of the NHS's existing funding would be required.
He said: ‘Most of what is recommended can be funded through the NHS long term plan.’
Key recommendations from the report
1. There are significant opportunities that should be taken forward to reduce the personal risk and unlimited liability currently associated with GP partnerships.
2. The number of general practitioners who work in practices, and in roles that support the delivery of direct patient care, should be increased and funded.
3. The capacity and range of healthcare professionals available to support patients in the community should be increased, through services embedded in partnership with general practice.
4. Medical training should be refocused to increase the time spent in general practice, to develop a better understanding of the strengths and opportunities of primary care partnerships and how they fit into the wider health system.
5. Primary Care Networks (PCNs) should be established and should operate in a way that makes constituent practices more sustainable and enables partners to address workload and safe working capacity, while continuing to support continuity of high quality, personalised, holistic care.
6. General practice must have a strong, consistent and fully representative voice at system level.
7. There are opportunities that should be taken to enable practices to use resources more efficiently by ensuring access to both essential IT equipment and innovative digital services.
Source: GP Partnership Review