The Scottish Government has set out its plan for moving to a situation where GPs in Scotland do not own or lease their practice premises. This strategy will affect all those involved with privately-owned GP premises, including GP practices, landlords and lenders.
Published on 13 November 2017, the 2018 Scottish General Medical Services Contract Offer is described by the Scottish Government as setting out a distinctive new direction for general practice in Scotland. One of the main areas of change in the new contract and associated GP Premises Code of Practice is the relationship between the NHS, GP practices and private landlords of GP premises.
Why is ownership of GP premises an issue?
The part of the contract dealing with premises had its genesis in a Short Life Working Group which reported in November 2016. By its estimate two-thirds of GP premises in Scotland are owned or leased by GPs, with the remaining one-third being owned by Health Boards. The total capital value of GP premises was estimated at £625m with the value of rent and rates reimbursement being £70m.
The Working Group was clear that there should be a gradual move to a situation where GPs do not own their practice premises. This was because of the recruitment and financial difficulties caused by GP ownership of premises and concerns about sustainability of local practices as a result.
The working group was also keen that national consistency was introduced in the Health Board response to requests from GPs to mitigate liabilities for owned or leased premises. These requests arise either because the practice is in financial difficulties or because of concerns about actual or contingent liabilities associated with owning or leasing premises.
Main points of the Contract and Code of Practice
The following are some of the main points in the 2018 GMS Contract and GP Premises Code of Practice:
- The long term strategy in relation to premises leased from private landlords will be that no GPs will need to enter into a lease with a private landlord in the future. Over the next 15 years Health Boards are to take on the responsibility of negotiating and entering into leases and the obligations for maintaining premises.
- In the short to medium term GPs can apply to Health Boards to take on responsibility for leased premises by negotiating a new lease with the Health Board as tenant, accepting an assignation of the GPs' current lease, or providing alternative accommodation when the current lease expires.
- The Code sets out that where the Health Board leases premises from a private landlord in the future the lease must allow the Health Board to use the premises for health and social care services, to sub-let or grant a licence for those purposes, and to sub-let or grant a licence on different terms from the head lease.
- GP owned and leased premises must now be included in Health Boards' Property Asset Management Strategies. As part of this the Scottish Government is commissioning a survey of all GP premises, regardless of ownership.
- From April 2018 there will be a GP Premises Sustainability Fund. This will provide additional support to GPs who own or lease their premises. GPs will be eligible for a sustainability loan of 20% of the existing use value of their premises on an interest-free basis. These will be repayable if the premises are sold or are no longer used for the provision of NHS medical services.
- Health Boards are to plan either to purchase existing GP-owned premises in a planned manner over the next 25 years or provide alternative premises to allow GPs to sell their existing premises.
What happens next?
To begin with Health Boards will review the GP estate to identify leases by private landlords which expire before 1 April 2023. Those leases will be prioritised for either negotiation of a new lease by the Health Board direct, or provision of alternative accommodation.
In relation to leases expiring after 1 April 2023, the Health Board will take on the existing lease from GPs if GPs so request, subject to certain criteria. The Health Board's approach will be informed by priorities identified by the Health & Social Care Partnership in the area.
Get in touch
If you are a GP practice, landlord or lender and would like to find out more about how you will be affected by the new contract, please get in touch with a member of our Healthcare team.