Wessex LMCs director of primary care Carole Cusack explains how Improvement Grant funding is used and how to access it
The majority of CCGs will likely state that they have not been awarded any Improvement Grant funding for 2019/20 so far. However, it seems that every year some capital funding is found and there is then a scramble to find projects which both meet the criteria and can be completed by the end of the financial year or, at the very least, some of the work has been commenced which then secures the funding provided the CCG accrues it in line with their Standing Financial Instructions.
All primary care premises should be fit for purpose in order to attract rent reimbursement of whatever type – ie, cost, notional or actual rent.
Fit for Purpose is laid down in the Premises Costs Directions 2013 with the Minimum Standards set out at Schedule 1, Part 1 as follows:
Schedule 1, Part 2 covers contractual standards
Many CCGs have commissioned a 6-facet survey of all primary care premises which will have highlighted any areas where the standards are not being met and this should be used to the practice’s advantage to ensure the work is undertaken and a grant awarded for this purpose.
Estates planning now sits at the level of Strategic Transformation Partnerships (STP) and Accountable Care Organisations (ACO) /Integrated Care Systems (ICS). Bids for funding from the Estates and Technology Transformation Fund (ETTF) must also now be approved by the STP prior to being submitted to the national panel for funding.
However, all CCGs also have a primary care estates strategy covering primary medical care services which feeds into their strategic estates plan.
Improvement grants can be used for:
Currently, the 2013 (and the previous 2004) Premises Costs Directions allowed for a grant of 66% of the total cost of the work involved with the 33% paid by the practice. However, given the national direction of travel towards working at scale and out of hospital care it is expected that the revised PCDs (due to be published this year but still pending) will cover transformation and offer grants of up to 100%, but this will only be as an exception. The premises must be included as necessary in the primary care and STP estates plans and must be fit for purpose. Interestingly, some CCGs already increase the grant above 66% by using section 96 of the GMS Contract Regulations.
Until recently, this was a little known clause which allowed CCGs (and their predecessors) to use funds towards meeting a practice’s need where there was no actual funding pot to call upon. Section 96 funding can be used by CCGs for a whole host of funding shortfall issues, not just premises.
In the first instance it’s worth checking with your CCG if there is any funding available and whether they have a template form for completion. Even if there is no current funding, it’s worth producing an application which will be ready for submission once any funding announcement is made.
Three quotes will be required for the work and, unless there are exceptional circumstances, the lowest quote will usually be the one accepted by the CCG.
Practices are entitled to apply for an improvement grant as many times as they have work to undertake and the improvement meets the criteria set out above.
Bear in mind that normal wear and tear will not meet the criteria and the PCDs Part 2 (9) lists those items which will not be reimbursed.
If you are an owner-occupier then your notional rent reimbursement will contain two parts. Firstly ‘rent’ element (which is what a third-party landlord would expect to achieve as assessed by the District Valuer) and secondly, an element for repairing and insuring which is usually set at around 5-7%. It is this element which the practice should use for maintaining the building as fit for purpose and it’s worth setting this sum aside towards maintenance costs.
Some leases also contain the need for the tenant to be responsible for fully repairing and insuring the premises and again, there will be an element built into the notional rent/rent reimbursement for this. In this case, the practice should retain that element (only paying the rental to the landlord) in order to maintain the premises as fit for purpose.
Where a practice has an internal repairing lease only, the landlord will have built into the rental an element for maintenance of the fabric of the premises which they remain responsible for.
Where premises are newly occupied or significantly refurbished by a practice professional expenses may be reimbursed including:
Any capital allowance given to a practice in the form of an improvement grant will lead to an abatement of rent for a period of time. This sometimes deters practices from applying but please bear in mind that the abatement is only based on 66% of the additional rent attracted by the grant rather than the whole of the rent reimbursement and so can be a fairly insignificant amount.
The abatement period is set by the cost of the building or refurbishment work as follows:
In the eagerly awaited revised PCDs, it is expected that the abatement periods will be aligned to the three yearly District Valuer review dates.
Whatever you do, do not go ahead with any building or refurbishment work prior to gaining CCG approval as, not only can they refuse to consider a grant, but they must then refuse to increase your rent reimbursement to cover the additional space.
Carole Cusack is director of primary care at Wessex LMCs
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