How is premises policy set to change?

Director of Primary Care at Wessex LMC Carole Cusack provides an update on proposals to overhaul premises policy in England, and explains what this could mean for long-awaited update to the Premises Cost Directions.

In case you thought you missed them, the full Premises Costs Directions (PCDs) 2020 have still not been published.  

However, a number of recommendations published in the Government’s Partnership Review in January 2019 were used to set out the direction for future policy in NHS England’s General Practice Premises Policy Review published the following June.

Some of these recommendations look set to be incorporated in the new PCDs, as outlined in the GP Contract for 2020/21-2023/24.

General Practice Premises Policy Review – Key recommendations

The document drew on the Partnership Review to put forward a number of recommendations, including the following key changes:

• Assign existing practice leases of ‘strategic importance’ to NHS bodies (or other appropriate entities) where their length and liabilities are likely to prevent the healthy renewal of partnerships and the estate.  
• Support an ownership model for existing GP practices, but over time allow for separation of premises ownership from delivering primary medical services.   
• Provide clearer guidance around maintenance and standards, as part of professionalising property ownership and management
• Pilot alternative premises reimbursement arrangements at a Network level, to give networks greater autonomy   
• Pilot a simpler model where the NHS bears the cost of premises directly in multi-use new build premises – removing the need for bureaucratic premises reimbursement
• Develop a support package linked to ‘primary care engagement’ in Sustainability and Transformation Partnership (STP) and Integrated Care Systems (ICS) capital strategies and the capital allocations process
• Encourage Networks to start working out their future estates needs now, taking into account joint working and the estate of their community partners.  

A lot of the recommendations were dependent on clarifying what capital would be available to ensure premises are fit for purpose as part of the spending review in September 2019, after which NHS England was to develop a premises implementation framework, which is also yet to be published.

Summary of the main changes to the PCDs

The headline changes to the PCDs set out in the GP Contract back in March. Reflecting the need for GP practices to expand, they included some measures that should help partners invest in premises, namely VAT reimbursements on Stamp Duty, and increased funding for improvements. Other changes should also help introduce more flexibility and ease liabilities.

The main changes are:

• CCGs will now be able to provide Premises Improvement Grants that fund up to 100% of the project costs (currently funded at a maximum of 66%). This means that although there will still be an abatement on the notional rent no capital input will be required from partners.
• Commissioners will reimburse VAT on Stamp Duty Land Tax.
• VAT will also be reimbursed on rent payments
• Rent reviews will not require practices to carry out their own valuation. This means they will no longer need to agree a new rent with landlords prior to obtaining a District Valuer’s assessment of the current value.
• Fewer restrictions on assigning or surrendering a lease. In practice this means lease rent holders will have the right to assign their lease to a third party (likely to be NHS Property Services).
• Third party use of premises will be made easier to arrange.

Further potential changes

Publication of the new PCDs has not necessarily been delayed by the Covid-19 pandemic, as it is understood they were agreed before the pandemic began.

Given the rapid introduction of working from home together with the huge increase of the use of video and telephone consultations, it’s possible that plans for bigger and better premises to house the additional staff being recruited under the PCN Network DES, Additional Roles and Responsibilities Scheme (ARRS) is prompting some revisions. Remote consulting could lead to a reduced need for premises, particularly if we move to an 8-8 service over 7 days when GPs, nurses and staff could work different shift patterns, negating the need for such large premises.

On the other hand, recruiting all the additional roles contained within the ARRS will still require much larger premises in many cases, which will need to be fit for purpose both in terms of clinical standards and IT.     

While there are a number of services which can be provided from a central PCN hub, the whole nature of general practice is the provision of timely services to and within local communities so good fit-for-purpose premises will continue to be needed.

However, there is a noticeable push towards integration of services across the whole health and care system, and this will inevitably include premises owned and managed by a variety of organisations including acute and community trusts, local authorities and general practice both at PCN and individual practice level. It is likely, therefore, that as STPs develop their estates strategies, any applications for development will need to include a full options appraisal of all possible available estate and land across the whole spectrum of the NHS and Local Authority.    

Changes to ownership

It is clear from the recommendations made by NHSE/I that the issue of who owns the premises is a major factor in their estates planning for the future. In recent years there has been a move away from GP ownership, mainly where recruitment of GPs has become an issue and where there are fewer and fewer current partners owning the premises which holds the threat of ‘the last man standing’.

This, incidentally, also applies to leasehold premises where the lease often includes a clause stating that there must always be two or three partners responsible for the lease – not always manageable in the current climate.

NHSE/I has stated that it is looking for a much more professional approach to premises that will account for the strategic fit in an area, meet minimum standards and possibly even move away from the current bureaucratic reimbursement system. While the PCDs 2020 are likely to move some way towards this, it is unlikely we will see a major change just yet. It may be that the ability to assign a lease to a third party and use the premises alongside other services outside of GMS – such as District Nursing, Physiotherapy, Health Visiting, Occupation Therapy services – will be the starting point towards meeting the needs of the STP and NHSE/I.

After an already prolonged review period and in the midst of so much change, I’m still not holding my breath for publication of the new PCDs before April 2021.

Carole Cusack is Director of Primary Care at Wessex LMCs