Answer
It is extremely difficult to give any general figures as it depends so much upon the details within your lease agreement and, moreover, exactly what services are provided. At Aitchison Raffety, we manage circa 25 medical centres where service charge levels measured on a m² basis range from under £10 per m² to just under £70 per m². At the lower levels, the “services” will cover little more than external repair, decoration, building insurance, repairs and maintenance to hard landscaping etc. At the upper end of the scale, services would include all of the aforementioned plus internal decoration, repair, cleaning, maintenance and utility costs for all shared and common areas. The higher rates are achieved especially when a building starts to have more than one lift, requires the employment of managing agents, receptionist, caretaker etc. Another point that sometimes adds is where the service charge collects a “sinking fund”, i.e. monies put aside for future decoration and repair.
I note that you were paying about £33,600 per annum which appears to break down to about £36 per m², a rate that falls in line with the above. This has now risen to £96,000 per annum or over £100 per m² which is certainly far outside the normal range. I am surprised that you have had no explanation of this as, under the various codes of operation (such as the Royal Institution of Chartered Surveyors’ recommendations), you should have been provided with a budget in advance and given the chance of making representations before any service charge applied. Dependent upon the wording in your lease document, this may or may not be required but, as noted, is normal practice. Such a sudden increase may relate to an element of major disrepair but, as I understand it, your building is only a few years old and thus I would have thought that such disrepair would have been covered under the building warranty.
Turning to the matter of reimbursement by the PCT, the 2004 Premises Costs Directions do allow this 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. Where considered as part of the initial scheme, the PCT must consider that application and then, having regard to its budgetary targets, grant such application. LIFT projects do historically have high service charge costs as, in addition to many of the items noted above, they will include other facility management elements. Thus it would not be unusual for a PCT to agree, as part of a LIFT project, to reimburse all or part of a Practice’s service charge. I thus imagine that the problem you have is that, as you did not apply for it when your new surgery project was being put together, it is now not in their budget and thus not a sum they can afford to pay. |
