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The nitty gritty of premises funding under new contract

In the second of his articles on funding and the new contract,

Dr Bob Button raises some practical points and gives his advice

Last week I looked at some of the problems that practices may need to consider under the heading of premises funding. Here I offer some practical points for consideration by GPs in relation to this funding.

I mentioned in my last piece that the first and most important thing for all practices to note is that the sums involved are no longer to be ring-fenced for general practice but are intended to cover all the premises costs that PCOs have, including their other primary care premises needs.

Practical point

Consider the costs of branch surgeries

Are they economical? Check this out.

You are now going to be in competition with walk-in centres and community health clinics from the word go. A futher problem is that this money is to be strictly cash-limited. GPs must realise they will be in an increasingly competitive environment.

I mentioned that money is to be distributed by PCOs under three main headings:

lContinued funding of present commitments, if the PCO wants to and feels it can afford to

lFunding of premises improvements agreed and set in motion before September 30, 2003

lFunding using new money

Practical point

Is it going to be worthwhile applying for funding? Find out which PCO is the 'lead' in your area and also talk to the premises lead in your own PCO.

This lead PCO is supposed to have access to a degree of expertise in both the new directions and expert understanding of primary care premises problems in general. All PCOs are supposed to be able to provide informed advice but, as I indicated last week, I have my doubts.

Practical point

Agitate through your LMC, or directly, for the details of the expertise that is supposed to be available. If it is not credible, let your LMC know and it can refer it to the GPC or even your MP.

PMS funding will not be directly affected by the financial allocation system and so the immediate effect is not the same as for GMS practices. In future applications though it is likely that PMS practices will also be affected.

Practical point

If you are a PMS practice, ascertain the amount of the budget you receive that represents rent and rates reimbursement.

Last week I mentioned that PCOs are now given almost complete discretion in their approach to not only cost-rents and improvement grants but also the recurring costs that occur in premises.

Practical point

Find out from your PCT what period of guarantee you have that expenses will continue to be 100 per cent reimbursed.

We know that PCOs which are financially stretched will look to the primary care elements of their funding to make economies rather than secondary care ones. It is probable that practices will have to face a situation where they no longer receive 100 per cent reimbursement.

Practical point

Is the above the first part of a Government strategy to reduce practice reimbursement that, together with the new policy on goodwill, will make life easier for private providers?

From now on, a formula-based approach will be applied to the payment of notional rent when an improvement grant has been given. This formula can effectively abate the notional rent for up to 10 years after an improvement grant has been received.

Practical point

Check the amounts involved before deciding on an application for a grant. It may be better to pay it direct without reimbursement. But bear in mind the effect this increase in expenses is likely to have on the superannuable profit in the practice.

There is also a formula to determine the degree to which abatement applies when private income is generated while using the GP's premises.

Practical point

In the event of the ownership of the premises not being vested in all the partners, then attention must be given to the way the costs of the premises are dealt with in the practice accounts. Take into account the individual profit shares and hence superannuation shares of the individual partners who may or may not be property-owning members.

If a PCO wishes to challenge the standards of a GP's surgery premises they must consult the LMC.

Practical point

Make sure you are familiar with the standards before any patient group from the PCO pays you a visit.

Bob Button is chief executive of Wessex LMCs

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