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DH urged to extend GP premises cost reimbursement pledge amid dispute

GP leaders are calling for the Government to extend guarantees to reimburse VAT, stamp duty and legal fees until a long-running dispute over premises leases has been resolved.

In a letter circulated to GP practices, the BMA’s GP Committee says it has ‘written to the Department of Health to seek an extension’ beyond the end of this month, while it pushes to ensure premises charges do not outstrip practice funding.

Around 700 GP practices, roughly 10% of the total in England, were issued new lease terms in recent years as part of a push to standardise the charges for tenants in NHS Property Services premises.

NHS England’s GP Forward View pledged to cover practices’ stamp duty land tax, VAT, and provide transition funding where there had been a significant increase in non-reimbured costs within the new lease terms – but only up to a deadline of 31 October.

This was supposed to incentivise practices to agree to sign up to new leases, but GP leaders warned practices against accepting ‘uncapped charges’ which could threaten their financial future.

And the GPC has now said NHS Property Services has been threatening to refer practices to the Department of Health for ignoring its attempts to negotiate a new lease.

The dispute has been caused by a Government premises valuation drive, which has seen practice rents and business rates set at their ‘market rate’ after being largely unadjusted since NHS Property Services took over in 2013.

Some of these costs are reimbursed, many tenants have seen large increase to the non-reimbursable ‘service charge’ component.

This covers the building’s upkeep and management services in shared areas.

But Pulse has revealed practices were being ‘financially crucified’ by the five-figure increases, which GP leaders say bears no resemblance to the investment in the building.

The letter, from GPC premises lead Dr Ian Hume tells practices that the deadline ‘to access incentives for signing up to a lease for practices is the end of November [sic] 2017′.

‘GPC has written to the Department of Health to seek an extension of this deadline and are currently awaiting a response.

‘In the view of the BMA, transitional arrangements are not the solution. More permanent arrangements which align a practices’ funding to their costs are needed.’

Pulse revealed, last month, that GPs owed more than £120m in overdue charges to NHS PS (£91m) and CHP (£31m), £60m of which they would have to pay out of their own pocket.

And earlier this year the GPC surveyed NHS Property Services tenants to gauge just how much their costs had increased, and what they had paid historically.

The letter sets out some of the findings, showing that between 2014 and 2016 ‘practices reported an average 157% increase in their service charges and a 130% increase in their rent.’

It also warns some practices who have ignored NHS Property Services’ requests to negotiate a new lease have received letters ‘within which [NHS Property Services] threaten[s] to refer practices to NHS England and/or the Department of Health if they do not engage with their agents in respect of their lease’.

The GPC says this should be a signal to join discussions, rather than accept charges, and adds: ‘In the meantime, please be wary not to inadvertently agree to invoices you do not agree with the legal basis for.

‘We would like to reassure practices that we are of the strong opinion that in the absence of agreement by the practice (whether in a written lease or otherwise), unilateral changes to service charges cannot be made nor enforced.’

An NHS Property Services spokesperson told Pulse: ‘Having issued Heads of Terms to more than 700 GP tenants, the current stage of the programme is focusing on progressing discussions with individual practices towards agreeing and signing leases over the coming months.’

They added that NHS Property Services was not able to respond on whether the deadline for lease incentives could be extended, and was ‘unable to validate these BMA figures’ on the scale of increases.

NHS England declined to comment and the Department of Health had not responded at time of publication.