News

Monday 4 July 2011

Statement in response to the Daily Telegraph articles

One of the Daily Telegraph’s top stories today directly relates to the rent reimbursement GPs receive for their surgery premises. GP Surveyors were approached by the Daily Telegraph to provide comments for the story, but we felt that the tone of the article may have been derogatory to GPs. Therefore we declined to be drawn into answering the questions posed. However, now the story has been released, there are a few points we feel need clarification as they appear unbalanced, biased and misleading.

In three articles, the newspaper along with the Bureau of Investigative Journalism they state they have “uncovered details of the secretive scheme” which they claim is “allowing GPs to pocket windfalls running into millions of pounds from their surgeries.”

Below we have set out the Daily Telegraph’s headlines/comment in bold, followed by our comment on the relevant facts.

“A secretive taxpayer-funded scheme is allowing GPs to pocket windfalls running into millions of pounds from their surgeries, an investigation has found.” [Daily Telegraph]

FACT - It is no secret that since the 1960s all Doctors who own and operate their own surgery have received rent from the NHS. This will come in the form of either Cost Rent or Notional Rent and is reimbursement in return for investing their own capital in premises and allowing their private building to be used for NHS purposes to provide frontline services.

The current reported overall NHS budget for 2011 is £110 billion, with GP premises rent scheme totalling £630 million. Therefore the doctors rent reimbursement scheme only represents 0.57% of the total NHS budget. Without the investment by GPs in premises, the NHS would be in a significantly poorer situation having no property from which to administer frontline services.

“GPs could claim tens of thousands of pounds in “notional rent” annually which is used to clear the mortgage.” [Daily Telegraph]

FACT - The legislation states that for PCT approved premises GPs may be reimbursed a notional rent. This is intended to reimburse the doctors for the capital expenditure of providing premises.

Other businesses are able to adopt a pricing policy that incorporates an element for premises. GPs are not able to set such pricing policies. Accordingly a system exists for the reimbursement of their property costs including their mortgage payments. Depending on the mortgage arrangements entered in to, this may or may not be covered by the rent reimbursement.

“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 be met by the government direct if GPs did not.” [Department of Health spokesperson in the Daily Telegraph]

FACT - We agree with the Department of Health spokesperson. From GP Surveyors experience, the majority of practices use the reimbursement received to make improvements to their premises, with examples from our own clients who have upgraded reception areas and installed new telephone systems from the money received. Any improvements made to GP premises provide a greater quality of experience for the patients using the services, which is a key message at the heart of the Government’s Health and Social Care Bill.

“The rent paid by [sic] GPs is set every three years by independent district valuers on behalf of the NHS, but private companies operating on of [sic] the surgeries can appeal.” [Daily Telegraph]

FACT - Our role when representing GP clients is to check the DVs “opinion of value” and ensure it is correct. It is only when the DV opinion does not suitably reflect what is a fair and reasonable level of rent that an increase can be obtained.

Interestingly enough, not one of the three articles written in the Daily Telegraph had a comment from anyone at District Valuer Services (DVS) regarding their involvement in setting the level of Doctors rent and the negotiations that take place with independent Chartered Surveyors during the rent review process. District Valuers are instructed by the PCTs to value the GP practices and it is they who agree the final figure to be paid, even if negotiations have taken place with an independent firm of Chartered Surveyors to review the evidence and an uplift has been proposed. In instances when both parties cannot agree a fair rent the cases are put before the NHS Litigation Authority for an independent expert to make the final decision.

“The company which has a base in London’s exclusive Harley Street, describes a range of tactics used to raise NHS rents on its website.” [Daily Telegraph]

FACT - The “tactics” we use when looking at rent figures include checking the measured area of the premises to ensure that they have been taken correctly and no areas have been missed in the original valuation by the DV. This ensures that any areas used for GMS/PMS purposes are correctly reimbursed. We ensure that other elements which are incorporated when obtaining the market value of the property such as carparking spaces, internal fixtures such as air-conditioning have been reflected, as well and assessing the general appearance and maintenance of the property.

During negotiations, evidence is drawn from similar properties to ensure that the rent paid to the GP practice is fair and in-line with other current market rent values in the area. If an agreement cannot be reached with the District Valuer regarding the rental level, submissions can be made by either party to the NHS Litigation Authority under the National Dispute Resolution Procedure and an independent expert makes the final decision.

All of the professional team at GP Surveyors are qualified Chartered Surveyors and are members of the Royal Institution of Chartered Surveyors (RICS). The company is regulated by RICS and all work is carried out following their standards.

“Practices are also able during this period to dispute the rental payments if they feel services or needs have subsequently changed. The District Valuer will again determine the amount in these circumstances.” [Spokesperson for NHS Peterborough in the Daily Telegraph]

FACT - We agree with spokesperson for NHS Peterborough. The DV is the controller of the public purse and is the decision maker throughout the whole of the statutory-based Notional Rent process. A Doctor can only obtain an increase in rent where there DV agrees that the original valuation was incorrect.

"Chris Johnson, a director at GP Surveyors said he declined to comment on the fees paid by GP surgeries for the rent reviews, saying this was “commercially sensitive.”" [Daily Telegraph]

FACT - With regards to our fees for our Notional Rent service, we feel that they represent the best value for money and our clients are happy with what we charge. We undertake around 500 reviews a year, which is considerably higher than other similar firms offering this service, and we have hundreds of advocates who are happy to share their experience of us working for them to ensure they are receiving a fair and correct level of reimbursement.

Our fee is not obtained from the tax payer, PCTs, NHS or any government body, but direct from the GPs as their professional advisor.

Doctor John Leonard describes Doctors actions for employing private surveyors for increasing their rent values as “despicable.” [Daily Telegraph]

FACT - GPs use a host of other specialist professional services e.g. solicitors and accountants to help with the management of their practice. It is not unusual for them to seek advice from a specialist. GPs are busy looking after their patients and typically do not have the time or the expertise to deal with property matters themselves.

Conclusion

The Daily Telegraphs articles seemed biased and misleading about the “86 per cent” of GPs and private companies that receive notional rent. It appears to have used sensational headlines to try and damage the good name and reputation of hardworking GPs.

Article links

GPs pocket millions from secret taxpayer-funded scheme [External link: Daily Telegraph]
No win, no fee companies make GPs millions [External link: Daily Telegraph]
GP case studies [External link: Daily Telegraph]