Home Menu Search

Sub-letting practice space

Generally, if the practice is receiving rent from those subletting, then it would be reasonable for the notional rent to abated. However, if this is not the case and the room is being used to provide services that are supporting the delivery of Primary care this would not be the case, though it is a little bit of a grey area! The BMA have written to NHS England for clarity on this issue and have received the below response, and anything that is not clear from this is up for commissioner discretion. The new PCDs will clarify the process when they are published.

Overview

The NHS funds GP premises costs under the terms of their GMS contract. Locally, these terms are equally applied to PMS contracts and some APMS contracts where GMS services are commissioned. The contract provides for recurrent premises costs to be reimbursed to Contractors, all of which are detailed within the National Health Service (General Medical Services - Premises Costs) (England) Directions 2004/2013, more commonly referred to as the 'Premises Directions'.

The commissioning of services by Clinical Commissioning Groups means that additional services can often be hosted within GP surgeries. This leads to questions regarding the premises payments linked to these arrangements.

In brief:

1.There is an expectation that the floor area approved for reimbursement under the Directions is used for the delivery of GMS services.

2.Where there is the hosting of ad-hoc sessions of other primary/secondary/community care services, this can generally be accepted without the need for adjustment to the premises costs. However, where the hosting arrangements see the hosted Service(s) occupy space within a surgery effectively full time (8-10 sessions per week), then the NHS reserves the right to abate the premises payments made to Contractors.

Questions are often raised in terms of what premises costs can be passed to these Tenants:

3.There is an expectation that a formal Agreement will be in place between the Practice and any other Service Provider / Tenant. This Agreement will lay down the terms of occupancy, to include the space occupied, length of agreement, notice period and any costs that may be related to that space. Both parties will agree and sign the document, each holding a copy. A further copy will be passed to the Commissioner.

4.Where the NHS funds practice premises costs in full (100%), to include Current Market Rent (Notional, Actual or Cost Rent), Business Rates, Water charges and Clinical Waste the Contractor may not seek to cover those costs a second time through direct invoicing to that Tenant.

5.A GP contractor is entitled to a triennial Current Market Rent review under the Directions. The CMR assessment takes into account the Tenants liabilities. This will typically include internal maintenance and decoration (and in many cases, external maintenance and decoration), insurance and other general maintenance items. Where covered by the Commissioner, these cannot be recharged. This CMR assessment is subject to triennial reviews under the terms of the Contract and Premises Directions 2004/13.

6.Where the NHS funds practice premises costs only in part, agreement needs to be sought from the Commissioner to ensure that the area supported by the NHS can de delineated on a floor plan with the area excluded from support clearly defined. Agreement for direct charges to be levied against that area can then be offered by NHS England.

7.There is an expectation that any charges made are reasonable. This will mean that Rental charges (where properly incurred) are in line with the Current Market Rent assessment for the property and that utility and service costs are valid and can be supported with evidence. Such charges may include cleaning, consumables, telephony and in some instances, reception and admin support where this is directly offered by the Practice.

8.Often the simplest way to determine charges is to take the full year liability/cost for each element (where it can be charged) and pro-rata that cost according to space/time occupied. Given the vast variation in the type of buildings, age and current market rent assessments it is not possible to determine an average rent or an average utility cost either.

The NHS will look to support such hosting arrangements; however it must be clear that this must not be to the detriment of the delivery of GMS contracted services. GPs are commissioned to deliver their core contracted and Enhanced services and the premises costs awarded are to deliver those services. Where it is possible to host additional primary/secondary/community based clinics, this must be reasonable and not require the need for additional investment/extensions to practice premises, or force practices to relocate in order to support hosting arrangements.

Updated on 29 March 2018, 598 views

Related guidance...

NHS Property Services

We are often asked advice by practices occupying premises owned by and rented from NHS Property Services. Many practices do not have a...

NHS Property Services

We are often asked advice by practices occupying premises owned by and rented from NHS Property Services. Many practices do not have a...

NHS Propery Services

Service charges for GP premises Landlords will often seek to recover their costs associated with a let property from tenants by way of...