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Analysis: What the changes to the premises rules mean for your practice

Accountant Luke Bennett looks at the implications of the changes in the GMS Premises Costs Directions 2013

Removing the need for GPs to declare their private income was completely unexpected. Perhaps as the Department of Health has said, it’s just to reduce bureaucracy - or maybe it’s a recognition of where the NHS is going, with the introduction of Any Qualified Provider.

I agree that these abatement clauses have been a bureaucratic burden. I can also see that if part of the premises are used for private and commercial work this should be excluded from any reimbursement.

What is not clear though is what happens (as is more likely to be the case) if part of the premises are used sometimes for GMS work and sometimes for private work.

This could be read as an implicit understanding that GPs will carry out more private work in future, though the DH deny that is the direct aim of the change.

There are a few positive elements for GPs in the new directions. In the past, GPs in long-term mortgages with a high fixed rate had to pay a penalty to move to a different contract. The new regulations allow NHS England to reimburse the cost of moving to a cheaper contract. This makes sense because NHS England will benefit from paying a lower interest rate to the GP.

They have also extended the types of expenditure that might qualify for a premises improvement grant; GPs can now be reimbursed for improvements required for infection control, the installation of water meters, and emergency planning needs such as generators or offsite servers  .

To balance this they’ve said NHS England won’t reimburse improvements solely to make the practice more environmentally-friendly. The DH said this was because it’s not fair for the taxpayer to fund improvements that would save GP practices money, but it seems like an odd move from an administration which has publically said it wants to be the ‘greenest Government ever’.

The reimbursement for surveyors and architects fees has now been capped at 12% of the cost of the contract, although they’ve added a new category for project managers, capped at 1%. Perhaps this is a recognition that GPs will need more professional help.

One thing that hasn’t changed, which we hoped might have, is that NHS England will still only pay 1% over base rate when practices take out a loan on new premises. 1% was the figure before the financial crash; it would be impossible to get that rate now. We hoped they would increase the margin to 2-3% but they haven’t.

The overriding problem is that the directions are subject to NHS England constraints. If the money’s not there, they can just turn around and say ‘We don’t have the money’. It’s all very well them being written into the directions, but if there’s no funding then it’s no help.

Luke Bennett is a partner at Francis Clark LLP who are members of the Association of Independent Specialist Medical Accountants

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