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GPs create foundation trust to avoid ‘multimillion-pound’ VAT bill

Exclusive GPs in the West Midlands are proposing to set up a foundation trust to hold a new ‘voluntary’ GP contract, in an effort to avoid a multi-million pound VAT bill. 

Pulse has learned that all 45 practices in NHS Dudley CCG and four hospital trusts will form a new foundation trust to hold the ‘multispecialty community provider’ (MCP) contract, worth £5bn, to provide primary and community care services. 

Local CCG leaders said the practices and trusts wanted to form a community interest company to hold the contract, but found that this would mean they would have to pay a VAT bill that ‘runs into several millions of pounds’ – which foundation trusts are exempt from. 

Paul Maubach, chief executive of NHS Dudley CCG, told Pulse that the practices and trusts would rather spend the money ‘on more staffing and patient care than handing it over to the Treasury through VAT’. 

He added that the foundation trust will have a council of governors and be ‘absolutely GP-led’. But he added that having hospitals in the partnership would help to fulfil foundation trust ‘governance requirements’, such as having a chief finance officer and chief executive.

Once the proposal is approved by the CCG, the current acute trust will apply on behalf of the GPs and other trusts to NHS Improvement to ‘split’ and form the new foundation trust, which Mr Maubach said would not have a hospital attached but would oversee primary and community care.

Under the MCP foundation trust, GPs will sign a ‘formal integration agreement’, which will allow practices to choose whether they want to ‘fully’ or ‘partially’ integrate with the MCP with the latter version enabling them to retain their current GMS/PMS contract.

Mr Maubach said it will be left to ‘the MCP and the practices to work out the finer details’ of the integration agreement, defining who offers which services in Dudley, adding that the agreements ‘might be different for different practices’.

NHS Improvement, which has been involved in discussions over the new foundation trust, told Pulse: ‘We are aware of Dudley’s plans in this area, but have not yet received a formal proposal.’

HM Revenue and Customs said would not comment on the plans while discussions about the new foundation trust are still ongoing.

New care models subject to delay

Dudley is one of six MCP pilot sites that have already faced significant delays, with NHS England originally hoping the first contracts would go live in April last year.

The Government had initially mandated NHS England to ensure a quarter of the English population would cared for under an accountable care organisation (ACO) model by the end of last month. But the latest plan is for one-fifth to be covered by the end of the current financial year.

The latest hold-up is a legal challenge of the proposed ACO contract. The case, due to be heard on 23 and 24 May at the Royal Courts of Justice in London, followed campaigning by senior health professionals who warned it opened up NHS services to privatisation.

The BMA’s GP committee has previously warned GPs ‘not to feel pressured’ to sign these new-style GP contracts. which involves practices suspending their GMS or PMS contract and running the risk of losing their patient list if they want to revert.