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Premises fee hike set to ‘wipe out saving’ from merger of at-risk GP surgeries

Exclusive A practice in Cumbria may be forced to lose a member of staff after being hit with a five-figure premises service charge increase one year after merging to save money. 

Ambleside Surgery, part of Central Lakes Medical Group, is expecting a £25,000 increase in their property service charge, from £21,000 to over £45,000 in 2017/18. 

The practice said it currently has no plans to pay the higher fee charge but if they are forced to they will have to let a member of staff go, the formerly at-risk practice told Pulse.

The practice merged with Hawkshead Medical Practice and Grasmere Surgery in January 2016, after Pulse reported that Hawkshead had been at risk of closure due to losing MPIG funding. Of the three properties, only Ambleside is under NHS Property Services (NHSPS) management.

NHS England is widely encouraging practices to merge to save money by buidling ‘economies of scale’ but the practice warned via its Twitter account that the proposed fee increase ‘wipes out savings we have made by merging’.

While the practice could not put an exact figure on how much money was saved in the merger, a partner at the practice said the three sites share management costs, nursing services and have reduced other duplication of services.

Dr Kaye Ward, GP partner at Central Lakes Medical Group, said Ambleside practice is historically ‘very low paid’ as it is not funded to treat the 2,500 temporary residents it sees every year on top of its patient list of 6,000.

She said: ‘So our income is already way below the normal anyway and if we’ve got to pay over 100% extra on our rent then we will have to lose a member of staff. There’s no way we can afford it otherwise.’

NHSPS said service charge increases are the result of better information about the premises and the costs involved.

It added that some of the costs outlined in the bill at the beginning of the year are forecasted and are then recalculated at the end of the year to reflect an actual cost, with practices reimbursed where necessary.

Dr Ward said that LMCs in her area have advised the practice not to pay the service charge until the situation is resolved.

She added: ‘This is the NHS trying to provide a service that’s then being persecuted almost by another NHS organisation asking for more money. It’s the same pot, it’s the NHS funding. It’s crackers.’

Meanwhile, the Shepperton Medical Practice, in Surrey, wrote to its patients last week after being told their service charges would increase 1,000% next year.

It said this would mean finding ‘approximately £200,000’ in the next financial year to cover the increase and the problem was compounded because they were unable to contact anyone at NHSPS ‘for two months’.

But an NHSPS spokesperson told Pulse: ‘We know the figures for Shepperton Medical practice are not correct and are in contact with them and others to see how we can help their situation.’

They said NHSPS is also discussing with NHS England ‘about what transitional and reimbursement support will be available’ to practices.

The spokesperson said: ‘We have been getting better information about the space our customers actually occupy and this is one reason why some are seeing costs increase and others reduce.

‘We want to explain any increases fully and make our bills more understandable. We know we’ve got some way to go on this but we are making improvements.

‘Every penny we generate is reinvested back into the NHS.’

The news comes as the GPC has again advised practices not to accept new lease terms to be imposed by NHSPS.

It wrote in a bulletin on Monday that it was ‘aware that NHSPS issued their heads of terms to practices on 31 March 2017’ and ‘would like to highlight… that these terms are negotiable on an individual basis’.

‘The terms sent out are not enforceable, but should be a first step to a negotiation between NHSPS and the practice,’ the letter added.

Property service charge increases

NHS Property Services, a commercial company wholly owned by the Department of Health, recently changed the way it calculates rents to use a new ‘market value’ approach.

NHSPS says the new approach will give a better indication of the value of properties and allow commissioners to better plan their estate. 

Pulse reported last year that around 900 GP practices have received rent increases as a result, although PropCo said practices would not be affected as they are reimbursed for costs by NHS England.

At the same time, it has also moved to charge the full amount directly from practices rather than CCGs, which accountants have warned in the past would impact on the financial viability of GP practices.

Other LMC areas which have complained about hikes in fees included Northumberland LMC which warned last May that five-figure rises were ‘financially crucifying’ practices.