The New to Partnership Payment Scheme (N2PP) is now open for GPs and healthcare professionals taking up partnership roles for the first time. Paul Conlan (Director, GP Surveyors) examines the property matters that may arise as the result of partnership change.
The New to Partnership Payment Scheme
The New to Partnership Payment Scheme or ‘golden hello scheme’ launched on 1 July, had been scheduled to open earlier in 2020 but was postponed due to the COVID-19 pandemic. The scheme offers a payment of £20,000 to health professionals taking up a full-time partnership role in general practice for the first time after 31 March 2020. To support the establishment of new partners a contribution towards on-costs of up to £4,000 is also available, as well as a training fund of up to £3,000, to develop non-clinical partnership skills.
High numbers of practices are expected to utilise the scheme, with no cap on the number of applications that can be accepted from eligible healthcare professionals. NHS England has confirmed the scheme is expected to remain open for two financial years – 2020/21 and 2021/22.
GP Property Advice
Depending upon a practice’s circumstances the incoming new partner and or the existing partners may need independent property advice.
When a new partner joins a practice there may be an opportunity for the individual to buy into the practice property. In such a scenario a partner or partners may wish to sell a percentage of their share or a partner maybe looking to retire and be bought out. Under such circumstances an independent market valuation carried out by a specialist primary care Surveyor is highly advisable for all parties. A specialist market valuation will consist of a Royal Institute of Chartered Surveyors (RICS) Registered Valuer carrying out a full survey of the premises and a ‘Red Book’ RICS valuation of the property. Instructing an experienced specialist will provide all parties with the full confidence an accurate and reliable valuation has been undertaken and the buy-in can be concluded with all parties knowing the exchange price is fair and reasonable.
If the ‘golden hello’ scheme triggers a change in partnership at the practice and the incoming partner does not wish to buy into the property, this will create an uncommon party and in most cases the requirement for a lease. An uncommon party is a GP partner that has retired or left the practice while retaining an ownership share in the property and/or a GP partner that has joined a practice but has no intention of purchasing an ownership share in the property. In this scenario creating a lease to regulate the occupation of the property is prudent.
When putting a lease in place it is essential for all concerned, that suitably experienced representatives are instructed. Initially a Surveyor will draft heads of terms for the lease, as the lease terms adopted will impact upon the rental value and a Solicitor is unqualified to advise on rental value. Once agreed the heads of terms are passed to a Solicitor to draft the lease, which will be left unsigned until NHS approval is obtained.
Where the Surveyor is jointly instructed by the parties, the heads of terms should protect the investment value of the property for the equity owners, whilst simultaneously adopting terms that satisfy the NHS approval process for the non-equity partners. As part of the approval process, the NHS will check that the agreed terms are value for money to the taxpayer, as the lease creates recurring costs that the GP Contractor can seek to recover under the Premises Cost Directions. District Valuer Services (DVS) will provide value for money advice to the NHS on a GP Contractor’s application for financial assistance towards lease costs.
Securing NHS lease approval is often considered the paramount factor for the GP Practice and non-property owners as obtaining NHS lease approval guarantees the practices NHS reimbursements cover their outgoings under the lease, for as long as they provide contracted medical services. A lease also acts as a reference document to rights and obligations, helping avoid costly property disputes between the parties to the lease.
Depending upon a practice’s circumstances a new partner may be asked to sign an existing lease, possibly to avoid a last man standing scenario. Under such circumstances it would be prudent for the individual to seek the independent advice from either or possibly both, a specialist Surveyor and Solicitor. A primary care Surveyor or Solicitor will be able to undertake checks and review the lease, to clarify whether the terms and liabilities are reasonable and acceptable to sign.
If you would like expert property advice concerning any issues arising from your surgery utilising the New to Partnership Scheme, such as lease creation, lease reviews or Market Valuations, please contact GP Surveyors and one of our specialist team will be able to advise you.
For more information and to apply for the New to Partnership Payment Scheme visit NHS England’s website.