Ask The Experts - Premises Charges

Published:09/07/2010

Question

We are three practices in a health centre where we are tenants of the PCT, but we are soon all moving into a new primary care centre. At the moment, the practices each pay a nominal health centre charge and annual rates. I queried an increase in rent for one practice some years ago and was informed that the district valuer (DV) set the health centre rent.

The PCT also stated that the charges included water, furniture, fittings, heating and lighting. The charges for our area in the new centre are considerably higher than what we pay at present. The rates and lease rent are 100% reimbursable but, for utilities, we have to pay 60%. Can you advise?

Answer

In your old health centre, the PCT should have been charging you a rent as agreed with the District Valuer and then reimbursing the same amount. They should have been looking after the external and structural repair and decoration, and you your own internal repair and decoration. Rates should also have been reimbursed in full but, in the older style health centres, PCTs were under no obligation to contribute towards the practices’ costs of utilities, internal service charges etc. To be blunt, the administration of rent, service charges and utility costs within the older style health centres was often a little lax and I know many practices that paid little or no rent and also ended up, at least in part, getting contributions towards service and utility charges.

When moving to a new purpose built health centre which complies with the PCTs’ Strategic Services Development Plan, a new rent would have been determined by the District Valuer and again this would be paid by yourselves to the PCT but reimbursed. In a similar fashion, the PCT or landlord should bear responsibility of the structure and external elements together with external decoration, and you the cost of utilities, internal repair and internal decoration. There may also be an internal service charge to attend to common areas.

In order to encourage GPs to move to these new centres, the NHS (GMS Premises Costs) Directions 2004 expanded upon the previous PCT flexibilities and allowed PCTs, where appropriate, to offer financial assistance towards the practices’ payments of running costs (utility costs, cost of internal repair, cost of ground maintenance and also the cost of financial assistance towards service charges). Full details are included within the Directions’ paragraphs 46 and 47, where paragraph 47 (b) limits the level of PCT reimbursement to 40% of those costs. The logic here is that the payment is meant to bridge the gap between the costs in the previous or older style health centre and the new centre.

I should add that the reimbursement of the above service and running costs is a highly contentious matter as, in many PCT areas, such payments are not made on the grounds that they fall outside of the PCTs’ budgetary targets.