• Court case under way between GPs and NHS Property Services
  • GPs accuse company of imposing “arbitary charges” 
  • NHSPS describes actions as “regrettable”

Five GP surgeries in a legal dispute with NHS Property Services are accusing it of imposing “arbitrary charges”, claiming they are being overcharged by tens of thousands of pounds in rent.

According to the court papers, the surgeries, whose cases are being brought by the British Medical Association, are accusing the company of imposing “arbitrary charges” on their facilities costs.

However, NHSPS charging policy, as quoted in the GP surgeries’ court papers, requires the company to charge tenants rent and service charges which “better reflect the true market based cost”.

The company, which is wholly owned by the secretary of state for health and social care, manages around 3,000 properties used by the NHS. These buildings mainly house primary and community care services, and were previously owned by primary care trusts and strategic health authorities.

However, many GPs have refused to pay the company because they dispute their accuracy and fairness of their bills. Last June, the National Audit Office said the company was owed £576m in rent, of which 30 per cent was from GPs.

As of June last year, NHSPS had only agreed leases for two-thirds of their tenants, and the company has no legal mechanisms — such as eviction — to get tenants to sign agreements. 

Such payment disputes have contributed to NHSPS racking up deficits of tens of millions of pounds each year.

Rising costs

The court action against NHSPS was first announced last November, when the BMA said it would start legal proceedings over “unjustifiable” estates fees for some of its members.

According to papers lodged at the High Court, Bushbury Health Centre in Wolverhampton has seen its total rental charges rise annually from £6,000 per year in 2013-14 to nearly £71,000 per year in 2019-20.

NHSPS’ charging policy stated the increasing annual charges were a “forecast” and costs were recalculated at the end of the year based on the facilities and services used by the tenant.

However, Bushberry Health Centre claims it should only pay for utility costs, repairs and the maintenance of the interior of their properties.

In its court papers, Bushberry argued: “The charges levied do not represent costs and expenses incurred but instead impose an arbitrary charge (sic) in an apparent effort to recoup [NHSPS’] overall yearly expenditure.”

Three other surgeries involved in the case — Coleford Family Doctors in Gloucestershire, Valley View Health Centre in Hertfordshire, and St Keverne Health Centre in Cornwall — all occupy their premises under an “unwritten periodic tenancy”.

For Coleford Family Doctors, the court papers stated the terms of the surgery’s occupation are “implied from the parties’ conduct in demanding and paying service/facilities charges” between 2002-03 to 2012-13.

The surgery paid £6,000 in 2002-03 and £14,000 in 2012-13. This rose to £24,000 the year after — when NHSPS took over the premises — after which costs have risen to nearly £57,000 in 2018-19.

Coleford Family Doctors argues NHSPS’ charges fail to take the “terms upon which the claimant occupies the premises” into account, and are based on a retrospective “implication of a term that has not been agreed”.

Valley View and St Keverne health centres argue they have been paying “all-inclusive” charges, which have historically been lower than NHSPS’ recent charges. They say NHSPS’ charges breach the “implied terms” of their historic payments.

The final surgery, St Andrews Medical Centre in Salford, occupies premises for which the most recent written tenancy (which has expired) is from March 2004. Its arguments are similar to Bushberry Health Centre.

‘Regrettable’

No defence papers have been lodged yet by NHSPS. The company’s previous chief executive Elaine Hewitt quit in January after nearly five years in charge of the organisation. 

An NHSPS spokesman told HSJ: “These actions are regrettable given the constructive efforts we have made with the BMA to resolve issues around GP tenancy agreements and services charges.

“Over the years we have proactively tried to engage with the BMA on behalf of its GP members and we remain committed to working with the BMA and GPs constructively on these matters.”

In a court hearing on Tuesday, a timetable was set for the claimants to provide NHSPS with more information and enable the company to file its defences and counterclaims.

A BMA spokesman said: “While these five practices represent a range of different factual and legal situations, they are all facing the same core problem - which is the unfair, unjustifiable increase in service charges.”

Asked if the BMA is paying for the surgeries’ legal costs, the spokesman said: “The BMA is supporting the practices bringing their claims. We do not discuss funding arrangements.”