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GPs ‘profiting from rent scheme’

5 July 2011

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A programme funded by the taxpayer is being used by doctors to receive “millions of pounds” from their surgeries, an investigation has discovered.

The Bureau of Investigative Journalism and the Daily Telegraph have compiled a report that claims a ‘notional rent’ programme allows GPs to purchase buildings used for their surgeries, then ‘rent’ them back to the Department of Health for amounts higher than the mortgage repayments.

Once a GP retires, the surgery is then sold off with the profits from the sale of the building going into the doctor’s pocket, it claimed.

The investigation revealed that GPs have boasted of using the system to make six or even seven figure amounts.

James Wharton, a Conservative member of the Commons Public Accounts committee, accused GPs of “fiddling the system” and said he would ask the National Audit Office to open a “full and comprehensive investigation” into surgery funding.

He said: “People are obviously going to be extremely concerned to see that taxpayers’ money is being used in this way.

“For too long these people have profited too easily at the expense of the taxpayer and the government should look at this system and see whether it can be changed to ensure better value for money.”

The cost of premises is currently more than £630m, a spokeswoman for the Department of Health said.

This would be an increase of 70% since 2004, when the NHS paid out £370m.

A Department of Health spokesman said in a statement: “This system incentivises GPs to expand and improve services so that people have proper access to modern facilities.

“It represents the cost to GPs of renting or owning the premises, and is a cost that would met by government direct if GPs did not.”

Copyright © Press Association 2011

Your comments (terms and conditions apply):

“I am sure this MP feels PFIs are the way forward – more private companies with no political connections will be paid even more to build white elephants maintained directly by the goverment. If GPs chose to be paid the going commercial rates for their premises many towns and cities based on this MPs view would be only able to have surgries on industrial estates and not where they are currently located. I guess it’s another out-of-hours outcry. Look what has happened since that has been taken out of GPs management (has the cost gone down?)” – Sherell Abrol, Birmingham

“I feel this should continue as the GPs who own buildings under these arrangements have to pay the ongoing maintenance to keep the building fit for purpose. If you were renting a building and the PCT were paying or it was owned by an arm of the NHS they would need to fund any such costs. At the present time when a large majority of GPs are choosing to become salaried GPs to avoid the increase workload and responsibility.  It would be foolish and shortsighted to remove this opportunity” – Verity Shelton, Chesterfield

“Yes, the notional rent scheme should be scrapped. Does this apply to Opticians & Dentists, as they also provide services to
the people?” – Jyothi Sreekanta, Birmingham

“If you are representing Practice Managers why do you repeat this Press Association rubbish verbatim instead of investigating and reporting on the positive aspects of the notional rent scheme. How else should practice premises be funded?  The notional rent scheme pays rent for premises at open market value as assessed by the District Valuer. It is irrelevant what the property cost or what the mortgage repayments are. Does your landlord charge you no rent because they bought the property in 1900 and now have no mortgage? If notional rent was withdrawn there would be no incentive for GPs to invest in their premises or for third parties to build and lease premises to GPs and the DoH would have significant additional costs in providing and managing practice premises” – Stephen Blackman, Northamptonshire

“We are renting our surgery from a retired GP, who charges us a humongous amount of rent. The notional rent does not even cover a reasonable amount for this. I wonder if this is going to be taken into account with this review?” – Chris, London

“The other side of the coin on rent assessments is the way that District Valuers try to stop surgeries gaining the market value rent that the system allows them. Perhaps the rise in the number of specialist surveyors who help practices gain the correct rent is the real reason for the 70% increase in the cost?” – Alan Moore, Cheshire

“We purchased and renovated a run down building last year to allow state of the art GP services to be offered to local NHS patients. The rent offered by the NHS for the building was 20% less after the renovation than we were getting from mixed rents before the expensive renovation. That is hardly an example of the tax payer being ripped off!” – Dr M Koperski, London