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Untangling GPs’ premises liabilities

Last month, NHS England’s General Practice Premises Policy Review recommended that NHS bodies should be able to take on ownership of property leases directly. If implemented, it will give GP practices that manage ‘strategically important estates’ the option to sidestep certain property liabilities they incur as leaseholders.

It follows a review from Dr Nigel Watson, who chaired the GP partnership review, that highlighted the burden of estates liabilities GPs take on when they sign long-term leases is perceived as too great. It warned that this element of significant personal risk must be addressed if general practice partnerships are to remain an attractive proposition for trainees.

The review makes clear that there would be conditions attached to the proposal to take on ownership of property leases directly. For a property to be classified as ‘strategically important’, it would need to be crucial to the delivery of primary care services and linked to the NHS’ wider estates strategy. It also stipulates that ‘sub-leases’ for partnerships with governance and property management requirements would be introduced before an NHS body steps in.

It remains to be seen what responsibilities would be placed in such ‘sub-leases’ and if in itself this would create an additional layer of property ownership that complicates the situation. However, in many cases, GPs could feel that the impact of estates liability on recruiting and retaining practice partners is being recognised, and alternative models of ownership are being explored.

While the recommendations are well-intentioned and help for GPs in relation to premises issues is needed, taking them out of the equation could raise contractual practicalities and funding challenges. These are only briefly touched on in NHS England’s review.

The practices that constitute PCNs are likely to already be bound by separate leases

A change of this significance could alter the relationship between GP practices and NHS Property Services (NHSPS). The review, which acknowledges the ongoing disputes over leases and property costs, suggests NHSPS could be the most appropriate body to take on the financial responsibility of leaseholder.

But, as it stands, NHSPS requires GP providers who use its properties to be liable for the building’s maintenance and upkeep. NHSPS is unlikely to take this responsibility on willingly and foot all property related costs if there is no risk for the occupant.

Another element of the review looks at how the separation of estates liability could work in the context of primary care networks (PCNs), a concept backed as an essential development in NHS England’s five-year GP contract. A shift in the system of ownership and right to reimbursement here could simplify estates provision and make it easier for PCNs to host community or secondary care services in their properties. However, the practices that constitute PCNs are likely to already be bound by separate leases.

From a legal perspective, there is no certainty that tenants would be able to walk away from lease arrangements to adopt a different model without breaching exisiting leases and placing their NHS service contracts at risk.

The review rightly recognises that GP partnerships need flexibility. But partnership models that let GPs take on an appealing level of risk and make it easier to collaborate with other practices and secondary care providers need to be developed if the improvement of primary care provision and patient health outcomes envisioned by the NHS long-term plan are to be realised.

This, in turn, will require bodies, such as NHSPS, to sponsor a dramatic shift in the current system and be willing to work together to find a solution to existing disputes over unsubstantiated service charge costs – an issue that lies outside the scope of this review and will need to be addressed separately.

This review only contains recommendations and firm details around practical implementation, including how funding might flow to pay for ‘core estates provision’, remains unclear. In the meantime, GPs should review their current occupancy arrangements, establish whether ownership is the model that fits their risk appetite and, ultimately, whether their estate provision is structured in a way that suits the evolving needs of patients.

Edwina Farrell is a partner at national law firm Weightmans LLP with experience advising GPs on property matters