GP practices could face legal action over unpaid service charges

GP practices operating from NHS-owned premises could face legal action if they fail to reach an agreement over unpaid service charges by next April.

Lease agreements (Photo: teekid/Getty Images)
Lease agreements (Photo: teekid/Getty Images)

Around one in five GP practices are based in premises owned by NHS Property Services (NHSPS) or Community Health Partnerships (CHP), which have managed the NHS-owned estates since PCTs were abolished in 2013.

But many practices have yet to sign formal leases for use of the properties because of long-standing disputes over service charge hikes worth up to six-figure sums. At the end of 2017/18 the government revealed that around £202m in unpaid 'rent and associated charges' was overdue.

A letter sent by NHS England and NHS Improvement to practices in NHS-owned premises says that the health service is 'now keen to resolve outstanding cases and reach agreement'.

Service charges

It says that practices 'are expected to enter open discussions with NHSPS', aiming to agree by April 2020 occupancy of their premises on the basis of one of three options - a full lease, an interim 'rental agreement letter', or through 'open space' arrangements primarily meant to allow booking of unused rooms for sessional GPs.

It warns that in cases where it is 'evident that GPs and providers are failing to engage, the DHSC and the NHS bodies may seek legal recourse'.

Occupancy on a full lease is the 'preferred option', but NHS England and NHS Improvement recognise in the letter that this 'may not be possible for every occupier, due to - for example - agreements over service charges'.

One alternative - a 'rental agreement letter' - would provide 'clarity on rent and the agreed payment terms for your occupation while we continue to work with you on agreeing facilities management support, other services and ultimately lease terms', the letter says.

Lease options

Practices could also be offered a license to join a 'digital platform to find and book sessional space rooms' that is being developed by the NHS. According to the NHSPS website, NHS Open Space 'allows customers to hire both clinical and non-clinical space as and when they need it, on an hourly or daily basis'.

GP leaders have repeatedly hit out over steep increases in service charges - which have prompted LMCs to warn that 10% of GP practices in England could become financially unsustainable. The NHS has said the rises are justified to bring rents into line with commercial rates.

BMA GP committee chair Dr Richard Vautrey told GPonline that the BMA was committed to working with NHS organisations to resolve premises issues.

He said: 'Formal leases are desirable to give practices certainty of occupation, however the lack of a formal lease does not remove a practice's legal rights and these must be preserved.

'Agreements need to be reached after an informed discussion including any commitments from previous PCTs and crucially must be affordable. This needs CCGs to be given sufficient recurrent funding and leases should be backed up by the previous offer of reimbursement of legal costs and stamp duty land tax. Practices should not be forced into any agreement which places the viability of the practice at risk and places an unacceptable burden on the practice partnership.

'Disagreements over service charges should not be used as a lever to force practices to accept terms purely to satisfy conditions for improvement grants as that simply adversely impacts on registered patients.'

Last year, GPonline reported that GP leaders were hopeful that a national deal could be agreed soon to ease pressure on practices facing significant increases in charges after Northumberland LMC reached an agreement to write off thousands of pounds in costs.

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