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Updated Q&A: GP premises, the PropCo and NHS England reimbursements

Confused about GP premises regulations after the PCT handover to NHS England and the inception of NHS Property Services? Sofia Lind attempts to iron out the details.

Who pays for GP premises?

Whether rented or owned, NHS England area teams are responsible for reimbursing GPs for practice premises costs.

How do GPs who own their premises get reimbursed for their costs?

GPs are reimbursed by NHS England based either on ‘cost rent’ or on ‘notional rent’. According to gpsurveyors.co.uk, cost rent is a method of reimbursement for GP practices for providing premises, based on the cost of buying the property or significantly modifying it.

How are NHS England funding premises upgrades?

At the moment, they are not. An NHS official said there were several hundred applications that were in a backlog. NHS England is waiting to complete its review on premises before instructing local area teams to start funding applications.

What about those practices waiting on upgrades?

NHS England has devised a new toolkit for local area teams to prioritise outstanding applications, so there might be some movement soon. But what this toolkit involves - and therefore which applications will be approved - has not been made clear.

What is notional rent?

Notional rent is another scheme to reimburse doctors who own their surgery, and remuneration should be based on the Current Market Rental (CMR) value for the property i.e. what it would let for on the open market.

Who pays for the notional rent valuation?

Typically the commissioning body, i.e. NHS England, but this is what the BMA wants to have clearly written into the 2014 premises directions.

Who owns the premises if the GPs don’t?

Many GPs used to rent their premises from PCTs. Since last April, the ownership of these premises was transferred to a new company named NHS Property Services (or the ‘PropCo’).

So who owns the PropCo?

NHS Property Services is a private limited company, 100% owned by the Government in the form of the secretary of state for health.

What are the ‘standardised contracts’ that NHS England is pushing for?

When NHS England took over from PCTs, it was tasked with producing a template contract for GP practices in premises rented from the PropCo. This was an attempt to depart from a confusing myriad of different local rent arrangements between PCTs and practices.

What is the financial position of PropCo?

NHS Property Services had to negotiate a £100m loan facility from the Department of Health last summer. It was said this was due to cash-flow problems caused by outstanding rent payments from tenants.

What is the PropCo doing about this?

NHS Property Services has set out on a consultation to restructure the business, which it says will streamline the operation, reduce duplication in management structures and make it a more effective landlord. This may also include redundancies for ‘a limited number’ of staff, and will definitely involve the selling off of large chunks of NHS-owned land for residential developments.

How will this affect GPs?

Only the 10% of GPs in premises rented from the PropCo will be affected by the introduction of the standardised contract. The premises cost directions, which are negotiated annually and take effect from April, will though. Some GPs have expressed concern that the financial problems at the company may lead to rising fees, but the PropCo claims it has not changed any fees since the PCT handover.

What is happening with the premises directions?

NHS England is in negotiation with the GPC about both the premises directions and the standardised contract at the moment. The GPC was unhappy with a number of points in the 2013 directions and are now refusing to sign off anything to do with premises - including the standardised contract for PropCo practices - until NHS England agrees to four key sticking points.

Readers' comments (3)

  • Let's run a sweepstake: In which year will Propco be sold off to the lowest bidder and biggest friend of the Secretary of State for health?

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  • Why are you still calling it "the PropCo"? It is called NHS Property Services or NHS PS and has been for a consdirable time.

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  • No wonder it has cash flow problems, we haven't received any bills all year.

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