The new NHSPS lease and the prospect of significantly increased service charges continues to be a serious concern for many practices. It is a topic we have covered in detail on this blog and is one which raises many concerns for every practice affected. One question we are being asked frequently is ‘what action, if any, should we be taking now?’ With the application deadline for financial incentives to practices who sign up fast approaching, we thought it timely to update you on the current position.
The story so far...
We have successfully negotiated a number of beneficial changes to the Heads of Terms originally presented to our clients by NHSPS. However, some aspects of the service charge formula are proving difficult to agree. Our clients are awaiting revised proposals from NHSPS, but these have not been forthcoming and it is unclear when they might arrive.
Incentives to sign
The deadline to access the financial incentives on offer from NHSPS is currently set as 30 November 2017. However, given the lack of progress that has been made in getting practices to sign up, we anticipate that this deadline may be extended.
Nationwide, there are very few practices which have signed the new NHSPS lease. Usually this is because the value of the incentives on offer is far outweighed by the ongoing future cost of the liabilities NHSPS is seeking to impose – particularly in relation to service charges.
This is an issue we have previously highlighted:
- What can you do about inflated NHSPS service charges?
- How to Successfully Negotiate a NHS Property Services or CHP Surgery Lease
It is important that you try not to be pressured into signing a new lease until any historic service charge disputes have been resolved and you are satisfied with the level of future service charges.
In the interim, we advise you continue to maintain service charge payments at historical levels.
Unfortunately however, this brings its own problems and cannot be seen as a long-term solution. Over time, your practice will change through partner changes, mergers, or increases/decreases in patient numbers. These changes may result in you having different requirements for your building.
If you then seek to change the basis of your occupation, such as by increasing the space you occupy, this will constitute a change in your current lease arrangements. NHSPS may choose to refuse consent unless you agree to an increased service charge for the whole.
Similarly, trying to share the potential liabilities on historic service charge claims between current, new and former partners will be a recipe for dispute.
Overall, practices should only sign the lease once they are happy with the terms and any service charge issues have been resolved. It is a complex area and one with lasting financial implications, so it is always advisable to seek the advice of an experienced legal team.
If you would like our assistance, with this or any communication from NHSPS which has given rise to concern, then please do not hesitate to get in touch.
For more information, please contact Daphne Robertson on 01483 511555 or email email@example.com