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23 October 2015

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There are a number of practices still without leases in the UK. The problem has created an uneasy feeling for general practices but there is hope for the future

Since the 2012 reorganisation that saw the Health and Social Care Act 2012 introduced, NHS Property Service has provided support for 1,946 health centres across England, around a fifth of all practices. The organisation inherited roughly 70% of the estate assets owned by primary care trusts (PCTs), with the remainder transferring to trusts or its sister company Community Health Partnerships. Modelled on the private sector, Property Services – or Propco as it’s known to most – is a limited company, counting the secretary of state as its sole shareholder.
It’s fair to say Propco hasn’t had an easy start, facing challenging questions about its structure, finance and the way it deals with its tenants and customers. In 2014 the organisation was subject to an investigation by the National Audit Office after questions were raised in the House of Commons into its creation and structure.
Despite being given a clean bill of health by the regulator, NHS Property Services has continued to hit the headlines, most recently as a result of practices receiving backdated bills for thousands of pounds, far in excess of previous amounts. This has put the fledgling organisation in conflict with practices, local medical councils (LMCs) and the British Medical Association (BMA) – all of whom
are critical of their approach. Three years in, what is currently happening with Propco – and what can be done to fix it?

How it works
GPs have a variety of options for managing their premises including ownership, renting privately or from an organisation like NHS Property Services. In all cases practices are reimbursed directly for rent and rates by NHS England, paying for the additional services that the practice requires. GP practices can choose to either arrange facilities services themselves from local companies, facilities management organisations, or by purchasing a bundle of services through NHS Property Services.
Operating from four regional offices, and one head office in London, NHS Property Services describes itself as providing a comprehensive range of services for practices, including emergency/on-call repairs, non-urgent breakdowns, planned preventative maintenance programmes, and assuring the quality of premises, including the compliance of premises with statutory regulations.
By using NHS Property Services a practice can concentrate on treating patients while everything else is taken care of. That’s the theory, at least.

Follow the money
The transfer of money between NHS bodies has always been complicated. Prior to the changes the system functioned, but relied upon PCTs to subsidise practices by picking up any shortfall between incomings and outgoings. At an individual level, for each of the 161 PCTs this was a relatively small amount – across the whole NHS it now runs to many millions.
In 2014 NHS Property Services published a report entitled, Quality Healthcare Environments: A guide for customers and tenants, within it setting its aim to ensure that all costs incurred by the organisation are recovered from tenants.
It is this need to cover costs, and the necessity of passing this on to tenants that has resulted in some practices receiving huge bills, far in excess of those amounts practices are used to paying.
One of the first to speak publicly on this issue was Dr Peter Graves, LMC chair for Bedfordshire and Luton. “NHS Property Services [has been] sending demands for service charges way in excess of what practices have been paying to date”, he explained. “[NHS Property Services] is certainly not taking into account previously agreed charges nor the fact that some properties are shared.”
In one example, Graves describes a practice receiving a bill for £173,000 – far in excess of previous demands. Practices we spoke to complained that the demands from Propco are far
from clear, breaking costs down into only three categories including rent, service charges and facilities management services. The lack of clarity has lead some to question just how accurate these charges are. But this isn’t the only issue.
“We are concerned Property Services don’t understand that the service charges cannot be claimed back from NHS England and are assuming that this is simply a transfer of money from NHS England to Property Service via the practice. But this isn’t the case,” adds Graves.
Graves, is concerned about the impact that increasing demands coupled with decreasing practice income could mean. “We certainly know of a practice that will withdraw from its branch surgery if it is forced to pay higher service charges, because the income level simply won’t cover the costs,” he cautions.

Who does what?
The shock of these charges is compounded by the fact that many practices don’t actually have any formal lease agreements directly with NHS Property Services.
Practice manager Bridget Docking has more than 28 years’ experience in the NHS, managing practices in greater London and the rather more pastoral setting of the Forest of Dean. For the last 14 years, she’s managed the Coleford Family Doctors – all without a lease agreement in place.
“I still have the draft lease agreement in my draw from 14 years ago. The one I currently have is just sitting there and wasn’t signed at the time. It was disputed and nothing could be agreed on in the end. Nobody chased it up, so we’ve worked with no lease in place since then.”
It’s a familiar story for Graves. “Most of the practices in Bedfordshire and Luton in NHS Property services properties don’t have a lease,” he adds.  “Some have been paying service charges as agreed many years ago with no review, some don’t pay service charges at all, undertaking all services themselves.”
Docking and the local LMC have been proactive in negotiating a new lease, but the process has been beset by problems, as she explains: “It’s all plodding along like a mutual agreement. The clauses in the draft agreements weren’t at all reasonable. Every couple of years they go back to the drawing board. Once amended this goes to the legal companies and they say ‘no we’re not happy’.”
For Docking, it’s been 14 years and she’s not confident anything will happen quickly. “It’s a year and a half since we had a meeting regarding the finer points of the lease agreement and we haven’t heard anything in the interim.”
In fact, NHS Property Services estimates that of its 7,000 tenants, 4,500 are currently without leases. The organisation has made clear its commitment that it will “place formal lease arrangements for all properties, and to identify and manage any associated financial implications,” setting itself an ambitious target of completion by summer 2016.

Business as usual
Issues between tenants and landlords have always existed – particularly within the NHS – but for busy practices it’s not affecting things. In fact, it’s very much business as usual. A number of NHS Property Services tenants have reported experiencing a marked improvement in relations and performance over the previous months.  
Richard Bull, director, Cheltenham Primary Care Services Ltd explained his recent experience of working with Property Services. “I have been working with NHS Property Services for the past five months. They have been supporting us with our lease and service charges. It has been reassuring to have someone on our side supporting us with these issues. They have been able to sort issues out in months compared to the six years we have been trying.
“Our contact at NHS Property Services has been both supportive, knowledgeable and receptive to our needs.”
For those who are currently without a lease Andrew Kolenda, a practice manager in London is positive that the situation can be fixed amicably, with dialogue between the partners. “We just need to sit down and identify who is responsible for what. It’s just oversight, not malice.”
While relations on the ground may still be cordial, at the political level things are still more turbulent. Initially critical of Property Services, the BMA has since softened its tone, with Dr Ian Hume, BMA GP committee spokesperson, telling us that: “Talks with NHS Property Services had stalled due to a variety of issues, however we are now working with them to try and resolve the issue and reach a position where we have a lease which is acceptable to all sides.”
As the organisations begin to take their seats at the negotiating table, Peter Graves, LMC chair has some advice for Property Services that might smooth things on the ground: “If it can’t make appointments to discuss in person the service charges and a sensible and reasonable lease, then it should accept what practices are paying until such time as it can hold meetings. Then, if the practice agrees higher service charges they must not be backdated.”
A spokesperson for NHS Property Services has some words for practices keen to see what Property Services can do for them. “The way forward is clear and is agreed in principle with the Department of Health, NHS England and the BMA. You will benefit from local estates planning with your CCGs [clinical commissioning groups] that will optimise the use of the estate to deliver patient care. You will benefit from the massive efficiencies we are achieving and from strategically prioritised investment in coming years.”

Investment in the future
When considering leases and agreements practices across England will need to think clearly about the future. Kolenda and Docking both question the impact that the shift toward greater treatment in primary care outlined in chief executive of NHS England Simon Stevens’ Five Year Forward View is likely to have, potentially stretching existing facilities to breaking point. Docking explains: “We’re being asked to sign leases for the long-term, in some cases between five to 10 years. We need to be confident that the buildings will be improved and maintained before we sign a lease.”
Ageing facilities and an increasingly stretched primary care sector is a cause for concern, but Property Services has a plan, earmarking millions in investment capital and has committed to returning any efficiency savings directly to customers.
A spokesperson from the organisation adds: “We are working with CCGs to create local estates strategies in each area. Implementation of these strategies should enable all providers, including GPs, to deliver patient care more efficiently.” The investment will certainly be welcomed by practices.
In one recent example, Propco supported an East London GP practice to move to new modern premises. The Lantern Health group of practices was supported by Propco to move into new premises on Stratford High Street. Spanning three floors and includes a large reception area, new clinical rooms and open plan office space. It has allowed Lantern Health to begin transforming the practice, which was significantly under-performing before the company took it on. In recent months the expansion has seen the group take on three new GPs.
GP and chief executive of Lantern Health, Dr Clare Davison praised Propco’s involvement, adding that “since the move we have been able to attract a higher calibre of staff because of the improved working environment.”
All of those we have spoken to – the LMC, BMA, local practices and Property Services – are all committed to creating solid leases and agreements that are acceptable to both sides. For practice managers worried about what might drop through the letterbox, it can’t come soon enough.

Lawrie Jones, freelance health reporter.