The NHS (General Medical Services – Premises Costs) Directions 2024 were finally published on 9 May 2024, replacing the 2013 Directions, and coming into effect on 10 May 2024. Moving forward, all payments to GMS GP contractors for premises costs will be governed by the new Premises Costs Directions.
Key Changes
Grants and Abatements
- Integrated Care Boards (ICBs) are now able to award GP improvement grants of up to 100% of the project value, an increase from the previous limit of 66%.
- Grants have been expanded to include the acquisition of land for premise extensions and tenant fitouts of new builds.
- Grant amounts have been increased, while the abatement period and guaranteed usage period have been shortened.
| 2013 Directions | 2024 Directions | ||
|---|---|---|---|
| Commissioner contribution 33-66% | Commissioner contribution up to 100% | ||
| Value exc. VAT | Abatement/guaranteed use | Value | Abatement/guaranteed use |
| Up to £100k | 5 years | Up to £144k | 6 years |
| £100 - £250k | 10 years | £144k - £360k | 9 years |
| Over £250k | 15 years | £360k - £660k | 12 years |
| £660k - £1.2m | 15 years | ||
| Over £1.2m | 18 years | ||
Notional Rent Assessments
- The 2024 Cost Directions introduce the role of an ‘appointed valuer,’ defined as:A suitably qualified professional registered with the Royal Institution of Chartered Surveyors, appointed by NHS England to perform property valuations or related specialist services.
Property valuations for NHS England can now be undertaken by an ‘appointed valuer,’ previously this was exclusively managed by the District Valuer Service (DVS). This change may help alleviate the significant delays in funding application approvals.
- Applications for notional rent and rent reimbursement must include notification to NHS England on the acceptance or rejection of the funding assessment within 12 weeks, or within a longer period agreed upon by NHS England and the contractor.
Leasehold Premises
- NHS England and ICBs are prohibited from negotiating directly with landlords regarding rent determination.
- Rent reviews will not require contractors to conduct their own valuation, only to provide evidence of the negotiation with the landlord, which may or may not include a formal valuation.
- The new Directions allow leases to be assigned to a nominee of NHS England if a practice returns its General Medical Services contract but cannot find a successor to take over the practice/lease. A protocol will need to be developed to support this change.
It is still very early to gauge what impact the Premises Costs Directions 2024 may have. There will be a period of uncertainty as practices, ICBs, DVS, and advisors adapt to the new Directions. We will monitor developments in the sector and consult with stakeholders to stay informed on the application of the new directions.
If you have recently received your Notional Rent figures letter, are about to undertake a Leased Rent review, considering improvements to your premises, or considering putting a lease in place, it is highly advisable to seek specialist GP property advice.