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GPs facing £17,000 service charge increase

Practices face being hit with an average £17,000 increased service charge for their premises that could threaten their viability, LMC leaders have warned.

As PCT-owned premises are transferred to the new NHS Property Services company, LMC leaders are warning there could be significant increases in costs to practices in future - including one practice that could see its charges rocket from £9,800 to £47,000 - which may not be reimbursed.

But NHS Property Services said it had ‘no plans’ to increase fees from those agreed with PCTs this year, but they could increase after that.

The LMC survey of likely service charges for practices in Northumberland has shown the average cost of estimated service charges could rise by as much as £17,000.

There could a 500% increase from £6,000 to £36,000 for one practice, though in part this was also due to a move to new premises. Another practice was facing an increase from £9,800 to £47,000.

Before April, practices in PCT-owned premises existed without a formal lease or license-to-occupy agreements, but had historic agreements in place with regards to service charges on things such as gas, electricity and maintenance.

However, the LMCs said the transfer of properties to the new DH-owned property management company NHS Property Services – which happened in April – could include rocketing service charges in future.

Dr Jane Lothian, medical secretary at Northumberland LMC, said that the transfer of PCT-owned premises to the NHS Property Services could result in cashflow problems, staff redundancies and even threaten the viability of some practices.

Dr Lothian said that under the Premises Cost Directions, which are regulations governing premises costs, it is unclear whether service charge costs will be reimbursable, as the directions reimbursement is at the discretion of the local area teams.

She said: ‘The situation is far from clear. It doesn’t appear to be equitable across the country. PropCo want to put the service charges on a correct footing. Where practices have been paying very little in service charges, and if reimbursement is discretionary, then if they increase by £30,000, that’s £30,000 out of GPs pockets.’

She added: ‘They might have to reduce staff. It’s yet another hit. Yet another factor affecting stability.’

But a spokesperson for NHS Property Services said that they would honour agreements imposed by PCTs: ‘NHS Property Services has not yet sent out any invoices to tenants, including GPs.

‘When we do invoice it will be on whatever basis the PCT had used previously. This data has been shared with CCGs. NHS Property Services has no plans in 2013/2014 to change the basis used by PCTs.’

Please note: This story was updated on the 6 June to reflect that the figures quoted were not charged from April, but were LMC estimates of what the service charges could be.

Readers' comments (12)

  • Maybe the time has come to offer GP's direct employment by the NHS for those Practices which are regarded as no longer financially viable.

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  • Sure, although of course GPs should stop doing anything outside of their contracts (especially management activity), cease all unpaid overtime, and make sure that they they go home as soon as the shift ends (even if there are patients waiting - that's up to the employer to sort out).

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  • I have never understood why GPs working from PCT owned premises do not pay rent?

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  • Isn't this about Practices who were lucky (or unlucky depending on the quality and maitenance of the premises) enough to be in PCT owned property being put on an equal footing with those who weren't? Financial pain yes but as neighboring Practices pay this now, LMCs will be hard pressed to argue on their behalf when the majority of their members already take this hit.

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  • Hazel Drury

    Practices owning their own premises are paying off their mortgages with cost rent payments and receiving a nest egg at the end of their years. Those in PCO buildings get none of this. Albeit it is fair to say that there is a lot of negative equity out there at the moment :-(

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  • No they don't get a nest egg at the end. Those days have long gone. The PCT paid the interest on the mortgage only and the predicted short fall per partner at my practice in three years time is about £40,000.

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  • 9:44

    How can they stop doing unpaid overtime when they arent employed by the NHS. The terms of their employment are with the practice and not the NHS.

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  • Anon 15 12:50,

    It was a response to the first poster who suggested that they should be employed directly by the NHS. IE if that becomes the case, then they should stop any unpaid overtime.

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  • Rents and rates are fully reimbursed to all practices even if they are owned by the individual GPs or by the PCT

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  • It is the governments responsibility, by statute, to provide the premises from which NHS care is delivered and this includes primary care.
    Historically, when most, if not all, practices were owned by the partners, the government paid rent to said partners in order to provide space.
    I can't see how GPs can be asked to cover any of those costs.

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