Ask The Experts - Premises Funding

Published:03/09/2010

Question

We lease our surgery from the developer who built it. A PCT Estates Director informally told us that other GPs in the area who occupy LIFT premises receive significantly more reimbursement than we do towards their service charge. I had a lengthy dialogue with the PCT which ended with it saying that our reimbursement is correct. But I have been subsequently told it might be a question of wording, that the LIFT practices may be getting this other reimbursement as an additional rent rather than as a service charge. The PCT claims its policy is to treat people equally. However, we have also heard that the district valuer disagrees with what is actually a two tier policy. What can we do? Is there somewhere we can check that the PCT was right to say our reimbursement is correct?

Answer

The 2004 Premises Costs Directions do allow this extra reimbursement under paragraphs 46 (payment in respect of running costs) or 47 (financial assistance towards service charges). However, these elements need to be agreed as part of the overall initial scheme. Having considered an application to include them, and taking its budgetary targets into account, the PCT may grant such an application. LIFT projects do historically have high service costs because they include additional facility management elements (such as areas shared by tenants). So it is not unusual for a PCT to agree as part of a LIFT project to reimburse all or part of a practice’s service charge. I think the problem you have is that, because you did not initially apply for service charge reimbursement, it is now not in the PCT’s budget and thus is not a sum it can afford to pay.