Practices face being hit with an average £17,000 increased service charge for their premises that could threaten their viability, LMC leaders have warned.
As PCT-owned premises are transferred to the new NHS Property Services company, LMC leaders are warning there could be significant increases in costs to practices in future – including one practice that could see its charges rocket from £9,800 to £47,000 – which may not be reimbursed.
But NHS Property Services said it had ‘no plans’ to increase fees from those agreed with PCTs this year, but they could increase after that.
The LMC survey of likely service charges for practices in Northumberland has shown the average cost of estimated service charges could rise by as much as £17,000.
There could a 500% increase from £6,000 to £36,000 for one practice, though in part this was also due to a move to new premises. Another practice was facing an increase from £9,800 to £47,000.
Before April, practices in PCT-owned premises existed without a formal lease or license-to-occupy agreements, but had historic agreements in place with regards to service charges on things such as gas, electricity and maintenance.
However, the LMCs said the transfer of properties to the new DH-owned property management company NHS Property Services – which happened in April – could include rocketing service charges in future.
Dr Jane Lothian, medical secretary at Northumberland LMC, said that the transfer of PCT-owned premises to the NHS Property Services could result in cashflow problems, staff redundancies and even threaten the viability of some practices.
Dr Lothian said that under the Premises Cost Directions, which are regulations governing premises costs, it is unclear whether service charge costs will be reimbursable, as the directions reimbursement is at the discretion of the local area teams.
She said: ‘The situation is far from clear. It doesn’t appear to be equitable across the country. PropCo want to put the service charges on a correct footing. Where practices have been paying very little in service charges, and if reimbursement is discretionary, then if they increase by £30,000, that’s £30,000 out of GPs pockets.’
She added: ‘They might have to reduce staff. It’s yet another hit. Yet another factor affecting stability.’
But a spokesperson for NHS Property Services said that they would honour agreements imposed by PCTs: ‘NHS Property Services has not yet sent out any invoices to tenants, including GPs.
‘When we do invoice it will be on whatever basis the PCT had used previously. This data has been shared with CCGs. NHS Property Services has no plans in 2013/2014 to change the basis used by PCTs.’
Please note: This story was updated on the 6 June to reflect that the figures quoted were not charged from April, but were LMC estimates of what the service charges could be.