GP contract – Summary of changes to the Premises Cost Directions

GP contract premises

After months of negotiations, the update to the 2020/21 GP contract has now been agreed upon. Headline updates include a 4% increase to the global sum, £20,000 golden handshakes to attract GPs into partnership and additional­ funding for PCNs to hire additional clinical staff. GP Surveyors highlight the key changes to the Premises Cost Directions, under the contract and how these could affect your premises.

Premises Improvements

With only half of practices deeming their premises to be fit for purpose (2018 BMA GP Premises Survey), the changes to the Directions bring a welcome boost to practices seeking grants for premises improvements.

  • A key update to the grants policy, now means commissioners can award improvement grants funding up to 100% of the project value, following the removal of the long-standing restrictions.
  • In addition, grant values have been increased and abatement and guaranteed use periods have been reduced.

Whether a practice is considering developing or refurbishing their premises, the most cost-effective way to fund the works can be complex. There are two options available to owner-occupied surgeries looking to fund premises improvement works, NHS funded and self-funded (including borrowing capital). Often, works are funded by a combination of these two options. Explore the options practices have, to fund GP premises improvement works and discover the pitfalls to avoid.

Acquiring land or premises

With the need for many practices to expand and surgeries to be developed, financial constraints have been eased to a small degree.

  • Commissioners will now reimburse VAT on Stamp Duty Land Tax (SDLT) on acquiring land or premises.

Additional noteworthy changes include:

  • Commissioners will reimburse VAT on rent payments
  • Lease rent reviews will not require practices to undertake their own valuation
  • Lease rent reviews will not lead to varying lease terms
  • Fewer restrictions around grants to assign or surrender a lease
  • More formalised arrangements for third-party use of premises, with protections for the practices and reimbursement of legal expenses
  • Reimbursement of Business Improvement District (BID) levies; and
  • Rights to reclaim overpayments made after the Directions are published.

Housing additional PCN staff

The matter of creating sufficient premises space for the 26,000 additional primary care staff, set to be recruited by 2023/24, was only briefly addressed in the GP contract agreement. The following advice is contained in the Update to the GP contract agreement 2020/21 – 2023/24 document:

  • PCNs will be encouraged to engage now with their community provider partners to agree on any necessary short-term actions.
  • Together they should also start developing a fully joint vision of fit-for-purpose future estate.
  • All parties will work together to make the best use of any new capital funding available to primary care to support general practice and the PCN model.

Further reading

GP Surveyors view on the future of GP premises in Primary Care Networks.