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Partners faced with £800,000 potential liability following practice closure

GP partners at a practice that is set to close face personal ‘financial ruin’ from a bill of £800,000, having taken out a long lease with the support of NHS managers.

The North Bicester Surgery in Oxfordshire is set to close for good on 30 September because the withdrawal of MPIG funding has made it ‘financially unviable’, leaving 4,500 patients having to find new practices. 

As a result of the closure, the senior partner has told Pulse he could face being hit with almost £1 million in bills because there are eight years left on the lease.

However, he added that he took on the 25-year lease in 2000 following enthusiastic support from the health authorities, because Bicester is and was one of the fastest growing towns in Europe.

The BMA has warned of the risks of GP partners, with GPs facing the danger of being left with all the practice’s liabilities were they to be the last partner to leave.

Senior partner Dr Andrew Gibson told Pulse that his practice was on the NHS England list of 99 practices deemed as being at risk due to MPIG cuts - yet no support was forthcoming and now the practice may have to close.

But, as a result of the proposed closure, he may be facing ‘financial ruin’.

Dr Gibson said: ‘The nasty underside of this is that we are left with a building and a lease that runs for another eight years and obviously the landowners – the freeholders – will want their lease paid.’

The premises are owned by a private landlord, and Dr Gibson’s name is the only one on the lease.

He added that the purpose built premises was designed with encouragement from NHS managers.

Dr Gibson said: ‘We built it in 2000 with the NHS provision in mind, growing Bicester, safe as houses, 25-year lease. When it came to having a purpose built premises it was the obvious thing to do – I wanted to do it and they wanted me to do it, so it was a mutual encouragement, if you like – it made sense.’

However, he added: ’If [the landlords] call in the lease I’ll be facing a bill of £800,000.’

GP leaders said that GPs must be alert to the dangers of being the last man standing. Dr Peter Holden, member of the GPC finance subcommittee and former GPC premises lead negotiator, said the case was an ‘object lesson’ for GPs to ensure they take specialist advice before taking on a lease.

Dr Holden said: ‘I feel very sorry for this GPs but this needs to be an object lesson. The bottom line is, he who signed the lease is responsible for it and GPs need to be warned that if there is no break clause the landlord wants your money every quarter until the end of that lease. Your estate is liable.’

He added: ‘The problem is that the GPs are in the middle of this process. Some anonymous civil servant or minister will come in and change things, but there is no impact to them – the impact is taken at the North Bicester level.’

Julie Dandridge, head of primary care and localities at Oxfordshire CCG, said: ‘We are currently working closely with North Bicester Surgery to help them support all of their patients during this time.

‘We understand that some patients may be worried about these changes but we are positive that they will continue to receive good treatment from one of the four other GP practices in the Bicester area or wherever they choose to register.’

Debra Elliott, director of commissioning at NHS England South Central, said: ‘NHS England will continue to work with Oxfordshire CCG and North Bicester Surgery to ensure the smooth transfer of patient care and records and those patients with more complex conditions are supported as they look to move to alternative GP practices.’

Pulse campaigning for support for vulnerable practices

Stop Practice Closures-logo-online-330

Stop Practice Closures-logo-online-330

Pulse has been pressing for immediate support for vulnerable practices across the UK since 2014 through its Stop Practice Closures campaign, and NHS England has recently announced a new tranche of £16 million of funding to support struggling practices.

Health secretary Jeremy Hunt first announced the fund in his ‘new deal’ last year, and NHS England said in December that practices with poor CQC ratings or higher-than-average referrals and prescribing would be prioritised.

By March 2016, NHS England had formally identified more than 800 GP practices as vulnerable as part of its work to allocate £10m worth of support funding.

It found the situation was worst in the North Midlands where 22% of practices were identified as struggling. In London and South Central, around a sixth of practices have been identified as eligible for support funds.



Readers' comments (34)

  • The 'managers' have for it wrong, they're comments show a lack of understanding and malice towards gp's. My colleagues have stated the case regarding notional rent and the mechanics underpinning the process eloquently.
    The goal posts have been changing and the direction of travel is now very much towards driving out owner occupiers in favour of larger, commercial set ups including pfi. PCT's offered assurances by guaranteeing leases to 3rd party pfi developers but it is unclear whether these are binding or whether go tenants still carry the responsibility.

    The ultimate aim here is to dismantle independent contractor status , make us all salaried slaves then hand over failing schemes to their cronies for inflated sums.

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  • Anonymous | GP Partner04 Aug 2016 11:35am - If I were you I would start exploring this now. We have been trying to develop premises and have refused to sign the 20 year unbreaking lease because our solicitors tell us that the Carfax letter (probably a variant of what you've been given) is worth 9/10th of nothing.

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  • How many independent contractors get their rent paid? The premises arrangements in primary care are overly complex and require significant resources to manage (rent reviews etc) as well as funding the DV time.
    Why not look to roll everything in to global sum and allow GPs to manage their business

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  • Anonymous | NHS Manager05 Aug 2016 10:41am
    This is exactly where we are heading. But if we are to carry all the risk, then we must have more control on the reward - ie co-payment. At present we must fight with our hands tied. The activity is boundless, the payment is limited, and the options for managing cost and profit are tiny. If we're to take risk like a real market, we must be free to set price as a real market. The alternative is that GPs will leave like a real market.

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  • If the GP in question is personally liable for the lease of this purpose built building, why cant he be allowed to shut the practice down and open a restaurant or a cafe? Rent the rooms to other businesses. Sublet the building to others, get a profit and pay off the lease.

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  • Ref:10.41 This was the situation until 1966.and now that CQC is monitoring premises it is possible and solution to GP shortage.
    Any provider who can provide the service from a approved premises by qualified staff and meet the CQC standars should be allowed to provide the service for a fixed tarrif.The system has been made so complex that they have turned good doctors into medical businessman or adventurers and when they get stuck they blame others.
    10 years a doctors were ready to buy into new practice premises built with upto 90% grants from NHS.But senior doctors were togreedy and wanted to run them with salaried doctors so that they keep the notional rent or cost rent for them selves instead of sharing with partners .Now they can face the music, all alone.

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  • Muhammad Rahim | GP registrar05 Aug 2016 12:29pm
    Because presumably if they are leasing it, the site was a third party development, where the value is substantially linked to it being medical premises. This might be an option as a last resort, but landlords don't really like to move to that approach if they've had NHS income. The cost of conversion would also be huge.

    What has just really struck me from reading the article again is that this practice was on an 'at risk' list - ie we knew it was a problem, and we did sweet fanny adams to prevent this. Draw your own conclusions, but if you don't fit the model, expect to be left out to dry.

    Has the GP considered opening a private practice in the premises?

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  • Ccg should have paid as they support such practices to stop closures
    Ask them . I know 2 practices got over £100 k

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  • Re NHS manager 1049 and the "small partnership approach that pulse and others support". Small partnerships funded reasonably provide far better continuity of care for their patients compared with the "super surgeries" in shopping centre sized premises that NHS England seems to favour. The later approach seems much better for managers, never mind what patients think.

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  • the lack of grammar and edit reading these posts is astounding

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