BMA confirms agreement with NHS Property Services over new lease arrangements for GP Practices

The BMA has confirmed that they have now reached agreement with NHS Property Services (“NHS PS”) on the terms of a “standard” lease to be used by NHS PS to formalise occupancy arrangements with its GP tenants.

Whilst the long awaited template lease has not yet been formally published, the BMA has advised that the template lease:

• Includes a break right for Practices where their GMS/PMS Contract is terminated;
• Sets out a guarantee that Practices whose rents are revised shall be entitled to equivalent rental reimbursement from NHS England;
• Does not include a clause that has commonly been included within PCT/NHS PS leases which permitted NHS PS to relocate Practices to other NHS PS premises;
• Has a clear dispute resolution procedure to be followed by the parties in the event of a dispute arising.

In addition to announcing agreement on the form of template lease, it has also been confirmed that NHS England will now deliver on the promises made in the GP Forward View published in April 2016, which were to ensure that Practices receive:

• Transitional support in respect of Practices seeing significant increases in service charges over the next 18 months resulting from the recalculations carried out to services charges recently by NHS PS;
• Reimbursement of Stamp Duty Land Tax and legal costs arising from Practices signing a new lease with NHS PS;
• Reimbursement of any additional sums payable to NHS PS as a result of VAT being charged on top of the annual rent.

The above “package” of support from NHS England is subject to Practices entering into a new lease with NHS PS before November 2017.

It is also worth noting that support to Practices who are facing increases in services charges is described as “transitional” only and there remains uncertainty as to how long the support will last and how Practices are to meet the increases in the long run.

The “package” of support offered also does not provide any financial assistance to Practices in receipt of backdated service charge demands from NHS PS. A large number of those backdated demands have themselves amounted to very significant sums.

This announcement does represent significant progress by the BMA on behalf of Practices occupying NHS PS premises with no formal lease currently in place and the support offered by NHS England has certainly gone some way to address many of the most common concerns raised by Practices in relation to entering into new leases with NHS PS.

The wording of this agreement is important and we have not yet seen the standard lease itself. Until we have seen the actual form of lease to be used and had an opportunity to review the detailed provisions dealing with the broad headlines set out above, we cannot be confident that the lease will offer fair and balanced terms of occupation to Practices.

Whilst the new package does have a deadline attached of November 2017, we would urge Practices to await a more detailed analysis of what is on offer before committing to the new lease.

We expect that the next step in proceedings will involve NHS PS writing directly to Practices or their solicitors advising of the new offer on the table.

If you are contacted by NHS PS or want to discuss your Practice’s options, please contact Victoria Armstrong on the details below:

Victoria Armstrong 
Partner
0191 226 7858
victoria.armstrong@sintons.co.uk