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GPs warned of privatisation risk of handing back contracts

GP leaders have warned struggling practices that handing back their contracts risks leading to profit-seeking companies taking them over.

The advice comes as the GPC issued detailed guidance on handing back contracts, amid growing numbers of partnerships finding themselves in an untenable situation.

It also advises prospective GP partners on precautions to take to avoid the risk of a ‘last-man-standing’ scenario, whereby all other partners have quit leaving one remaining GP with liability for redundancy payments and premises debt.

A bulletin issued by Cleveland LMC, highlighting the GPC guidance, said: ‘Remember that handing back a current GMS/PMS contract would almost certainly be replaced by a short-term APMS contract subject to open commercial tender.

‘We therefore strongly recommend that practices consider alternative means of sustainability, such as practice mergers, super partnerships or working in different models of collaboration.’

And the GPC said handing back contracts should be seen as a ‘last resort and only contemplated when all possible alternatives have been considered’.

It advises practices trying to avoid such a situation to read GPC guidance on managing workload and working under pressure, as well as working with other local practices in networks and federations, or if appropriate, in formal mergers of partnerships or practices.

It further advises single-handers to consider taking on one or more new partners who would be able to take over the practice when they step down and, if all else has failed, try to find another healthcare provider who might be willing to assume the contract.

Dr Bob Morley, GPC policy lead on contracts and regulation, told Pulse: ‘If the termination results in a procurement this will inevitably be an APMS with the likelihood that a non-GP, commercial or acute trust provider will be awarded the contract, rather than a continuation of GP partner-led general practice.’

But he said there were also strong reasons for individual partners to want to avoid having to hand their contract back, including ‘inevitable costs and problems related to winding up a business’ such as ‘potential significant redundancy liabilities’ and issues related to premises whether owned or leased.

He added: ‘If the list is to be dispersed then additional workload pressure will be put on neighbouring practices and patients, [and] particularly the most vulnerable risk being disadvantaged.’

But, despite advising practices to take on extra partners where possible, GPC also advises these prospective partners to enter an agreement only with caution.

Its guidance says GPs should ‘obtain independent accountancy and legal advice on the financial health of the partnership and its potential liabilities’, 

It also says prospective partners should ensure the partnership agreement does not allow for partners to leave in quick succession and that the practice keeps a contingency fund aside for practice obligations in the case of a last-partner-standing situation.

In full: GPC guidance to practices under critical pressures

In full: GPC’s last-partner-standing guidance

Are GMS and PMS contracts dying a slow death?

Pulse revealed in 2014 that NHS England were advising regional teams to throw open all new GP contract to competition, as this was its interpretation of the the Health and Social Care Act 2012 that came into force in April 2013.

Following challenge from the GPC, NHS England made reassurances that GMS and PMS contract could still be procured.

But as revently revealed by Pulse, only temporary APMS contracts have been awarded in new GP practice procurements in London since the new Health and Social Care Act was introduced in 2013.

At the time, NHS England said that although APMS contracts ‘offer a great deal of flexibility’ local commissioners ;are free to choose the contract type which is most suited for the service being procured’.