ࡱ> ]_\y &+bjbjEE *\''"a     8U$y\"(EEE   !!!!!!!$T#%"      "  EE"  E E! ! !EX>s!!,"0\"!&p&4!& !       ""   \"    &          : LMC POSITION PAPER ON PRACTICE PREMISES  1 Introduction The ownership and funding of premises has become a major concern for GPs in the current uncertain climate. This paper summarises the present position and suggests alternatives for how doctors can manage the risks associated with property ownership, 2 Current Position Most general practitioners in the LTK work from premises that are privately owned, often by the partnership. In Somerset over the last 30 years the cost rent scheme has ensured the accumulation of a stock of very good quality buildings which are worth something like M25 (the national figure being about B3-4) This represents a substantial capital sum even in NHS terms. Most Somerset GP principals are property owning partners. 3 Premises and Independent Contractor Status Although the Government has repeatedly reassured the profession that the independent contractor status of GPs is not under threat, it is clear that it will be an increasing anomaly within the new structures of primary care. New models of delivering primary care, and a perception by younger doctors that salaried employment may be preferable, will lead to a gradual but inexorable reduction in the number and proportion of true general practitioners. It can therefore no longer be assumed that doctors joining a practice will necessarily be partners, and even if they are, that they will wish to invest in the property. Benefits of Property Ownership To The NHS Premises occupied by GPs and paid from cost rent have usually been seen to provide better value for money to the NHS than owned Health Centres - it has been suggested that accommodation costs per doctor are 30% higher in the latter. Furthermore, the standards of maintenance and repair are typically much better in private buildings. GPs quickly adapt their buildings to meet new needs. To GPs Some GPs have considered property ownership to be an investment, particularly for their retirement, but this has never been part of the intention of the scheme. Investment in property allows the GP to have control over his or her working environment but it is not a secure pension fund. A commitment to the property makes for long term partnerships and a stable provision of medical manpower. 5 Problems of Property Ownership Capital value Although the problem of negative equity is disappearing in the current property boom, the value of buildings may fall again. Also, when inflation is low it may take some years before the capital value of a building exceeds the construction cost and the practice would traditionally change from cost to notional rent. During this time a property owning partner who leaves would, in theory, have to make a capital payment to the practice. Difficulties in valuation Valuation of premises is notoriously difficult. In the early years the cost rent valuation can be used, and thereafter GPs are advised to have an "open market" valuation. It is acceptable to value the premises for accounting purposes "for use as a medical practice" which takes into account facilities and adaptations specifically made for use as GP premises, but on no account must the value be inflated to the point where the sale of goodwill could be deemed to occur. 6 Future Considerations PCTs Power of Compulsory purchase Although at the moment a theoretical footnote, it is possible that this power could be used by a PCT to acquire GP owned buildings. In practice, the capital costs of doing so are unlikely to make it an attractive proposition. Nonetheless, if it were to occur the purchase would be made at the District Valuer's price, which will normally not exceed the open market valuation PCT Manpower Planning The equivalent and opposite risk is that a PCT will decide that it does not wish to contract with a practice to provide GMS in a particular location. Although PCTs do not at present have the power to terminate a GPs contract, it is not an impossible jump for the future. Under these circumstances GPs may be compelled to relocate and dispose of the property on the open market. Reduction in Property Owning partners A more immediate concern is the likelihood that incoming partners, or salaried colleagues, may not wish to become property owners. Most current partnership agreements have a clause that requires remaining partners to buy out a departing doctor, and then sell on his or her share to an incomer (though often these two processes are combined). With fewer doctors owning the property, the burden and risks for those that do grow greater. Alteration in rental arrangements Given that nothing in primary care can be regarded as safe, it must be assumed to be possible that the basis for notional rent (or its equivalent) could be changed at some time to make it less favourable to property owners. This is probably the least likely of these risks. 7 Options for the future Continuing property ownership GPs wishing to remain property owners should take the following steps: Ensure that the property is valued realistically, that is at something near to the "Open Market" valuation. Ensure that their practice agreement is sufficiently flexible to allow for future colleagues being unwilling or unable to become property owners. For instances, clauses that require the remaining partners to buy out a departing doctor may need to be revisited. Accept that property ownership allows for more. flexible accommodation arrangements but will not necessarily provide a good return on capital invested. Aim to hold about 30% of the equity of the building, and consider seeking an evergreen loan for the balance. GPs close to retirement or not planning to stay in the practice are advised not take part in the financing of premises development. Seek the most flexible funding arrangements possible. Non-property owning partnership Within the present structure of medical partnerships there are difficulties in not owning a share of the premises. Costs can be difficult to allocate, colleagues may feel that a non-property owner lacks commitment, and such doctors will find it hard to influence decisions about how the practice is accommodated. However, this has to be an option, particularly during the transition to the employment of salaried GPs within PCTs or PMS schemes. Accommodation in property owned by a third party Development of premises by a third party, which are then let to the practice, may increasingly be suggested as cost rent developments disappear and prices rise. At the moment the rental income from the NHS is sufficient to make this an attractive option, however, there are four significant considerations. The developer may impose a long lease which can be difficult to change if the circumstances of the practice alter. It is hard to protect yourself against a mismatch between rent charged and NHS reimbursements. Adaptations to the building must be agreed by the landlord who will have an overriding commercial interest, which may not coincide with the needs of the practice. The developer would not undertake this project without a profit. Could this profit come to the practice if you were to arrange things differently? One interesting possible solution would be the establishment of a corporation or agency to purchase GP premises and then let them under nationally agreed terms. This could be commercially viable at present interest rates and would remove the whole problem of property ownership from the primary care arena. Public/Private Partnership In January 2000 the Minister of Health announced new rules allowing Health Authorities (and ultimately PCTs) to become property owning partners with GPs or third parties in premises developments. Although primarily concerned with inner city developments these may prove applicable elsewhere. They include: HA may jointly purchase land or developments selling on its interest when appropriate. Rent reimbursement may be supplemented by a "needs "factor. HA may take on a lease from a third party, and then sublet to the practice. Help in moving to new premises - grants to convert houses back for residential use, bridging grant during transfer from substandard premises. Reimbursement of costs of temporary accommodation in social housing. Reimbursement of some equipment lease costs added to rental payments. Provision of mobile services in rural areas - chiropody, endoscopy, minor surgery etc This represents a significant shift in policy, and joint developments with NHS bodies may give GPs a high measure of autonomy whilst protecting them against market fluctuations. 8 Conclusion GPs should agree with their partners now a policy on property ownership. Practices should consider establishing a plan for moving to a secure position, and review their partnership agreements accordingly. Dr Harry Yoxall March 2000     LMC Position Paper on Practice Premises March 2000  PAGE 2 of  NUMPAGES 4 '()*+95 H I ( ) HIPQ nop˼˼˼˼ˬ؟ˬ˒˒sm hHCJhH56CJmH nH sH uhH6CJmH nH sH uhHCJmH nH sH uhHCJmH nH sH uhH56CJmH nH sH uhH5CJmH nH sH uhHCJmH nH sH uhHjhHUhHCJmH nH sH uhH5CJmH nH sH u*(*+:4 r.D$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh^a$= t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh $A&#$/D ƃ+p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh4 5 I ) HIQx? & F q%p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh$^a$= t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh  >>D$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh^a$@$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eha$= t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@ehop@$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eha$= t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@ehpq*01P [\fgrs #"$"q"ҶҶҧҧҧҧҧҧҧҧҧҧҧҧҧҧҔߧҧҔҧhHhH>*CJmH nH sH uhH6CJmH nH sH uhH5CJmH nH sH uhHCJmH nH sH uhHCJmH nH sH uhH56CJmH nH sH uhH56CJmH nH sH u:+~>~>@$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eha$= t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@ehD$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh^a$1P~D$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh^a$= t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@ehcK$ ƃ+p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh^a$O$ ƃ+p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@ehP^`Pa$OOOOV$ Ƙ2p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh^a$Z$ Ƙ2p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@ehP^`Pa$  ^S  ^R$ Ƙ2p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eha$O Ƙ2p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh #"$""3P$ & F ƅh+@p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh@^a$= t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh= t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@ehq"r"""""""C#D#######3$4$6$j%k%%%&&''''O'R'''''.(0(u(x((()))))))*********+dzǞǖÖÖÖjhHUhH5CJmH nH sH u hHCJhH56CJmH nH sH uhHhHCJmH nH sH uhH6CJmH nH sH uhH6CJmH nH sH uhHCJmH nH sH u9"""cP$ & F ƅh+p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh^a$K$ ƃ+@p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh@@^@a$""#[Z$ & F ƚh2p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh^a$H ƃ+p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh@^@##5$UW Ƙ2p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@ehP^`PS Ƙ2p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh@^@5$6$j%k%%q1@$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eha$= t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@ehO Ƙ2p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh%&&'gQ$ & F ƈh,8p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh8^8a$@$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eha$^''Q'W\$ & F Ɲh38p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh8^8a$K$ ƃ+p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh ^ a$Q'R'''/(0(MM\$ & F Ɲh38p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh8^8a$V$ Ƙ2p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh ^ a$0(v(w((()MMV$ Ƙ2p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh ^ a$\$ & F Ɲh38p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh8^8a$)))))i,,= t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@ehD$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh^a$R$ Ƙ2p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eha$)***************#+$+%+&+= t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh++ + ++++++ +!+"+%+&+hHCJmH nH sH uhH hOA0J hH0JjhH0JU (. A!n"n#$%S DdP   s<  C AbA&(0[ "\$MD;n&(0[ "\$MPNG  IHDRP *gAMAPLTE# pHYsbcbm,<8 IDATx[ Ds $$HBJTlߦ                oz>) tP(XGN@u7Qm`ՁV Y8z1@kYK3yLϦ,ΑUл;7N8 L&ed(6;!ُMR1DE 4U^Tä֯}lWN9_ ='L48cPfic-MiCn` KHI4B\O!7гAJޕ0D$nHFz942%W%l4C6:Y81@~p `8dHي18yEꎣ`Gڕ\z/r^!-YXE%~1a]k^C4˛/9EރCHzz7B.@4χЂ'_Թ/>}z-\$r&xR#$SR81c3)I,9dlZ8Egh9=".8-]T>p:l3N-ՠPe<l.H?VQvyQ/EhTo8h}x20[)#[gyFGQ{p=3, gC RtxW̜|{@K&:({KN#b5bv5܇+΃N{w0{Pԁ!%\ YzO C@VgW?V&kzmQo3ae sʀƸv) > hµuZw01ȫX.)tM J@9Px[Pk{X} )p U]sWs#'7݁jEh&(kRJ6Pml_H PqY P]` j.@|C1^(S c8c<j-b8ߛ4t tw: sYCJjwfg~8Mu>ў7w=IWkx/@6-Df@-_(({([xuϷ"jik즽8^lNh0f#XVC4a짾8/! L-m$.\OINFxxzzZN86.ٳ^81R}AxGiuZ ԝǣmr!gZB7BJk_tG]}~2u3גz]sZ@ў [N@sYVؤxN3Ѯ҈eY> aNW]Y{J/&4s,?|DT9WhZ@_m\I[dֳxvW -.z&62a[\=ٻH3L@10ԡՁV{HMwzZ/yeI@JADk=J`7;k],V6aj m\ ;{fQ@ O_& .AvxpF!6Enf_@OU/ -ܡ̔,Z}oȿʤaqGG/H8ͨлӗSO"ĨӀ8}` nM}y։"yzս}:_߹P pd6:8IsTO]y@&Ge[U{a(s5@ >( CGe]tYOI󥩏eI<ȤlSy66Yl;ُrPRTFm^h4Cr5;b<ՙ6ќC,^)+ԟ<^us<il2PWY+;3"L w y Po׹S 4W4}ΎusQVB*-?K&m@3WD7@D%!nI 9S9/>9hi .X68KŘ$#)@˼lKެp&rs-Y.j2 *$=9tV]h>:sxV\ hnxYRy<ϠO6‡)@FXf/TsF(Ѫ)z(ܞ3#q5;6@ۛhy!;п$P+bҟ lRkE<1'7h>iPKv9{X_FHx"*![peG4}*[5=Q^\ gۉ^%vյMP #@D qY$ gMݷ Krg"@-.ߪ{f_G*K?Erg>.O ?3uRԬw~SIE/͛AfAX(X(X(X(X(X(X(X(X(X(X(X(X(X(X(X(X(X(X(X&l IENDB`^ 666666666vvvvvvvvv666666>6666666666666666666666666666666666666666666666666hH6666666666666666666666666666666666666666666666666666666666666666662 0@P`p2( 0@P`p 0@P`p 0@P`p 0@P`p 0@P`p 0@P`p8XV~_HmH nH sH tH @`@Normal_HmHnHsH tH uJ J Heading 1@&_HmHnHsH tH uJ J Heading 2@&_HmHnHsH tH uJ J Heading 3@&_HmHnHsH tH uJ J Heading 4@&_HmHnHsH tH uJ J Heading 5@&_HmHnHsH tH uJ J Heading 6@&_HmHnHsH tH uJ J Heading 7@&_HmHnHsH tH uJ J Heading 8@&_HmHnHsH tH uJ J Heading 9 @&_HmHnHsH tH uDA`D Default Paragraph FontViV 0 Table Normal :V 44 la (k ( 0No List B@  Body Texty t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@ehCJmH sH uC@ Body Text Indent$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eh^a$CJmH sH uP@  Body Text 2$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eha$CJmH sH uQ@"  Body Text 3$ t&p@ P !$`'0*-/2p5@8;=@CPF IKNQ`T0WZ\_pb@eha$CJmH sH u424Header  9r 4 @B4Footer  9r .)@Q.  Page NumberPK![Content_Types].xmlj0Eжr(΢Iw},-j4 wP-t#bΙ{UTU^hd}㨫)*1P' ^W0)T9<l#$yi};~@(Hu* Dנz/0ǰ $ X3aZ,D0j~3߶b~i>3\`?/[G\!-Rk.sԻ..a濭?PK!֧6 _rels/.relsj0 }Q%v/C/}(h"O = C?hv=Ʌ%[xp{۵_Pѣ<1H0ORBdJE4b$q_6LR7`0̞O,En7Lib/SeеPK!kytheme/theme/themeManager.xml M @}w7c(EbˮCAǠҟ7՛K Y, e.|,H,lxɴIsQ}#Ր ֵ+!,^$j=GW)E+& 8PK!Ptheme/theme/theme1.xmlYOo6w toc'vuر-MniP@I}úama[إ4:lЯGRX^6؊>$ !)O^rC$y@/yH*񄴽)޵߻UDb`}"qۋJחX^)I`nEp)liV[]1M<OP6r=zgbIguSebORD۫qu gZo~ٺlAplxpT0+[}`jzAV2Fi@qv֬5\|ʜ̭NleXdsjcs7f W+Ն7`g ȘJj|h(KD- dXiJ؇(x$( :;˹! I_TS 1?E??ZBΪmU/?~xY'y5g&΋/ɋ>GMGeD3Vq%'#q$8K)fw9:ĵ x}rxwr:\TZaG*y8IjbRc|XŻǿI u3KGnD1NIBs RuK>V.EL+M2#'fi ~V vl{u8zH *:(W☕ ~JTe\O*tHGHY}KNP*ݾ˦TѼ9/#A7qZ$*c?qUnwN%Oi4 =3ڗP 1Pm \\9Mؓ2aD];Yt\[x]}Wr|]g- eW )6-rCSj id DЇAΜIqbJ#x꺃 6k#ASh&ʌt(Q%p%m&]caSl=X\P1Mh9MVdDAaVB[݈fJíP|8 քAV^f Hn- "d>znNJ ة>b&2vKyϼD:,AGm\nziÙ.uχYC6OMf3or$5NHT[XF64T,ќM0E)`#5XY`פ;%1U٥m;R>QD DcpU'&LE/pm%]8firS4d 7y\`JnίI R3U~7+׸#m qBiDi*L69mY&iHE=(K&N!V.KeLDĕ{D vEꦚdeNƟe(MN9ߜR6&3(a/DUz<{ˊYȳV)9Z[4^n5!J?Q3eBoCM m<.vpIYfZY_p[=al-Y}Nc͙ŋ4vfavl'SA8|*u{-ߟ0%M07%<ҍPK! ѐ'theme/theme/_rels/themeManager.xml.relsM 0wooӺ&݈Э5 6?$Q ,.aic21h:qm@RN;d`o7gK(M&$R(.1r'JЊT8V"AȻHu}|$b{P8g/]QAsم(#L[PK-![Content_Types].xmlPK-!֧6 +_rels/.relsPK-!kytheme/theme/themeManager.xmlPK-!Ptheme/theme/theme1.xmlPK-! ѐ' theme/theme/_rels/themeManager.xml.relsPK] &##\ ```cpq"+&+"-4  ""#5$%'Q'0())&+ !#$%&'()*+,AHJP[]c!tt8@0(  B S  ? &.'+IP !"""""""""""""###"#$#'#cg!CKdnnv""""""""""""$#'#333333"""""""""""""###"#'# y\ t   [P+ = +<[C 8YlJ 9iԾt%v wSz*6 hh^h`OJQJo( hh^h`OJQJo( hh^h`OJQJo( hh^h`OJQJo( hh^h`OJQJo( hh^h`OJQJo( hh^h`OJQJo(0^`05o(. hh^h`OJQJo(0^`0o( wSz9i[P+%v+<[C t=8YlJy\ OAH""@ &#@UnknownG* Times New Roman5Symbol3. * ArialA BCambria Math"h&& Q0?0?Y0""2HX $POA2!xx#Position Paper on Practice Premises Somerset LMC Dr Anne Hicks4         Oh+'0 , L X d p|$Position Paper on Practice PremisesSomerset LMC Normal.dotmDr Anne Hicks2Microsoft Office Word@@\]dž@@0՜.+,0  hp|  .?" $Position Paper on Practice Premises Title  !"#$%&'()*+,-.012345679:;<=>?@ABCDEFGHIJKMNOPQRSUVWXYZ[^Root Entry FPk>`Data /1Table8&WordDocument*\SummaryInformation(LDocumentSummaryInformation8TCompObjy  F'Microsoft Office Word 97-2003 Document MSWordDocWord.Document.89q