How to avoid expensive premises costs errors

Director of Primary Care at Wessex LMCs Carole Cusack provides her tips on how to avoid some common pitfalls with premises costs

Practices sometimes get caught out by premises payments, mainly because alterations to premises are done so rarely that practice managers simply do not have the opportunity to gain much experience of the Premises Cost Directions.

Here are my tips to avoid common pitfalls.

1. Always get approval before adding work space

If a practice wishes to bring into use a room not previously used for GMS purposes or add an extension, for instance, they must obtain CCG/NHS England approval before doing any work towards this – otherwise rent reimbursement can be refused (and indeed the PCDs say they must be refused). So, always get approval first if you want to add to your GMS floor space.

2. Don’t rent out space you already claim for

Another issue is around third-party use of a room, or rooms, for which the NHS reimburses rent. Where a practice receives rent reimbursement, it cannot charge a third party provider rent as this would be classed as fraud – being paid twice for the same space. However, if that third party uses heat, light, telephone etc., then a reasonable service charge can be made which, as this is not reimbursable by the NHS, is allowed to cover your costs for these services.

It is understood the new PCDs, due out in 2019, will address this issue when they are published, given the push towards working at scale and providing services across networks and with other providers.

3. Scrutinise service charge fees

Many occupying NHS Property Services premises have recently faced huge hikes in service charges.

This, in the main, is due to the addition of facilities and management charges added to the service and maintenance costs.

Always ask for a full breakdown of the service and maintenance schedule as there may be items included that are either already reimbursable, such as water rates, or that you don’t actually have or want – for example, security or cleaning.

Watch out for paying a share of lift maintenance when you only occupy the ground floor and it is not used by your patients. In short, refuse to pay for anything you don’t need or want.

Current advice is to continue to pay full rent and historical charges (with or without an inflationary uplift) but don’t sign a new lease unless and until you are satisfied of its acceptability and affordability and you’ve had it checked by a medical specialist solicitor.

GPC continues to negotiate on behalf of hundreds of practices in this situation, across the country, so don’t be badgered into signing when you’re not ready.

Carole Cusack is Director of Primary Care at Wessex LMCs