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Premises rule change ‘may allow GPs freedom to ramp up private work’

Exclusive: GPs will only have their surgery rent reimbursement docked if they undertake ‘huge levels’ of private work, under a change to premises rules that accountants claim could allow practices to significantly expand their non-NHS activities.

New premises directions which come into effect this month remove from NHS managers the responsibility to check GP private income levels - a responsibility described by the Department of Health this week as an ‘ineffectual bureaucratic burden’.

Under the previous rules, GP practices earning more than 10% of their income from private work had their rent reimbursement from the NHS docked.

The DH denied that the removal of this stipulation from the new premises directions was a signal for GPs to do extra private work, and warned that if NHS England discovered a practice had ‘high levels of private income’ then their rent reimbursement was likely to be reduced.

But accountancy and legal experts told Pulse the policy change meant private work could become a potential new source of income for practices.

The previous directions, published in 2004, stated PCTs should reduce the rent reimbursed to practices by 10% if the proportion of private income was between 10% and 20%, with a further 10% rent reduction for each additional 10% earned from private income.

The new premises cost directions came into force from 1 April, and have these clauses completely removed, although they do state that ‘where the Board [NHS England] makes a payment to a contractor under these Directions, it must ensure that the payment is made under the terms of the contractor’s GMS contract’.

The new premises directions also require a revaluation if there are any alterations to the lease and remove grants to make premises more environmentally friendly, such as installing solar energy systems or replacing windows and doors.

They also alter the rent review procedure. A memorandum signed by the landlord and the GP recording the change in the level of rent charged will now be required, a change that experts said would mean GPs taking a ‘big risk’ when signing rental agreements.

A DH spokesperson said the changes were not a signal for GPs to ramp up their private work, but were to reduce bureaucracy.

She said: ‘Historically, it has been rare for contractors’ reimbursement to be reduced to take account of private income and removing the requirement for NHS England to check all contractor practices simply removes an inneffectual bureaucratic burden.’

‘If it becomes obvious to NHS England that a contractor practice does have high levels of private income this is likely to involve parts of the premises being used for non-general medical service purposes and the premises directions still allow that space to be excluded from current market rent assessments.’

But Luke Bennett, a medical accountant at Francis Clark, told Pulse that removing this clause seemed to mark a ‘change in policy’ on declaring private income.

He said: ‘I wasn’t expecting that at all. It could be a recognition of where the NHS is going, with the introduction of AQP. It could be an encouragement to do more private work in future.’

However he warned that it was still unclear what NHS England would do if part of the building was used for private and NHS work.

Mr Graham Lea, a partner at Hempsons solicitors, said: ‘I wonder whether it may just be an acknowledgement that the future of the NHS may mean that some private work is carried out in surgeries.’

But the BMA said its in-house experts had advised it was likely that practices will be asked to declare private income when they complete the standardised PREM 1 form for the Area Team.

It predicted it was ‘unlikely that they will reimburse running costs for anything but a very minimal amount of private work’.

Dr Paul Roblin, chief executive of Berkshire, Buckinghamshire and Oxfordshire LMCs, said the removal of abatements could be a good thing in the new NHS landscape, where income comes from different sources.

He said: ‘The problem is in the new world sources of income are fragmented. Deciding what’s private income and what’s not is difficult.’

‘If you’re paid by your local authority, as many of the enhanced services are, that’s private work. If you’re employed by a CCG, is that private income? Until you define what is private and what is NHS work, it could very good to have this change so abatements aren’t applied.’

However, he added that the move also appeared to fit in as part of a wider privatisation agenda: ‘If I was cynical I’d say the Government may want to privatise the NHS more, and that they are aware of that. They might want GPs set up as private companies so CCGs employ GPs to do NHS work. This is roughly in keeping with opening up the market to private providers.’

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