GP practices housed in NHS Property Services (NHSPS) premises have received letters pressuring them into settling disputes with their landlord over service charges, the BMA has revealed.
It said that the letters – ‘ostensibly from credit controllers’ – have caused ‘alarm’ among GP partners, who have been given a ‘tight timeframe’ to respond.
The BMA launched a legal claim in January 2020 over ‘astronomical’ rises in charges faced by GPs in NHSPS premises and claimed a victory the following September, when NHSPS ‘conceded’ that its ‘national charging policy’ could not vary GP practice contracts.
But in February last year, NHSPS launched a counter-claim worth £1.3m against the BMA’s five-practice ‘test case’ regarding the policy.
And in June, the High Court ruled in favour of NHSPS in a landmark case – which meant that GP practices could be forced to pay huge service charges.
Now the BMA has revealed that ‘many’ practices have recently received NHSPS ‘settlement letters’ regarding the disputed service charges.
Its latest GP Committee bulletin said: ‘We know that many NHSPS practices across England have recently received “invitation to settle” letters, ostensibly from credit controllers, seeking to encourage NHSPS practices to settle disputed historical debt concerning non-reimbursable service charges.
‘Understandably, some partners may read these letters with alarm, especially as they involve the common pressure tactic of requiring a response within a tight timeframe.’
NHSPS claimed in May 2021 that it had reached ‘agreements’ with 97% of its tenants – but this was disputed by the BMA, which suggested that GP practices may have had these imposed upon them.
The GPC bulletin advised practices that decide to ‘engage with NHSPS on this issue’ to ‘do their due diligence’.
It said that practices in dispute with NHSPS should ‘seek independent advice about their occupancy arrangements and what they believe is recoverable by way of service charges’.
It added that they should also ‘engage with NHSPS on a good faith basis and make clear where amounts are in dispute’, as well as allow NHSPS an ‘opportunity to provide evidence to support its claims concerning the disputed amount’.
Practices should ‘make payments or agree to settle where they agree with the legal basis on which NHSPS have charged them, and where they believe these charges are accurate’, it said.
An NHSPS spokesperson said: ‘Following the recent judgement on the five practices, NHSPS is keen to progress discussions with the wider GP community to resolve this long-running dispute and has begun a phased process of writing to practices to discuss their individual situations.
‘We are pleased the BMA recommends its members ‘engage with NHSPS on a good faith basis’ and appear to support the points made by the judge during the hearing, where he encouraged tenants to work with NHSPS and provide relevant information, take independent advice where appropriate and engage constructively on any outstanding matters.’
They added: ‘Whilst the judgement handed down for the five practices found unequivocally in NHSPS’ favour, the judge was clear that they should not necessarily be deemed ‘test cases’.
‘For these five cases, the judge determined that the practices should pay the reasonable cost of services reasonably provided and we are confident that where an open dialogue can be established that we can find an effective way forward – our initial letters to a small number of practices is an attempt to begin an open dialogue.’
Meanwhile, BMA guidance for NHSPS practices updated last month added that the union is ‘prepared to consider all options to reach a fair process for calculating service charges’.
This process should ‘not result in practices having to fund the historic neglect of buildings owned by NHSPS’, it said.
It reiterated that the BMA is ‘disappointed’ that NHSPS counter-sued the five practices, saying it created ‘huge amounts of work’ and ‘enormous stress’ for their GP partners.
It said: ‘NHSPS’ decision to drag the five practices through protracted legal proceedings during a period of national crisis was shocking to the BMA and the five practices.’
And it added that the union remains concerned that NHSPS is ‘unable to readily evidence its claims and had mistakenly overvalued the debt owed by three of the practices by over £235,000’, meaning demands may be ‘inflated’ and cannot be accepted ‘at face value’.
Some practices might even be due a refund for charges that have been paid but cannot be substantiated by NHSPS, it said.
And NHSPS will need to provide a similar level of information to all its other GP tenants where the ‘accuracy of historic invoices are in dispute’ as it now has for the five practices ‘after years of legal action’, it added.
It said: ‘Unless NHSPS takes a more cooperative approach to sharing information relating to the specific charges, we do not expect other practices to have their disputes quickly resolved.’
NHSPS service charges have ‘reached a magnitude to make some practices unviable’, with ‘many’ GP partners ‘reluctantly contemplating’ handing their contracts back as a result’, the BMA said.
It is ‘in talks’ with the five GP practices involved in a legal dispute with NHSPS about ‘how they would like to proceed’, it added.
Disputes over premises service charges
The High Court ruled in June that NHSPS is able to claim service charges from its practices for specific services it provides. A further trial will now determine how much each practice owes the landlord.
NHSPS owns premises for over 1,000 practices, but the legal action has also been viewed as a ‘test case’ for practices with buildings owned by other companies facing similar disputes.
Pulse has long documented disputes over premises service charges since reporting in 2016 that several practices saw their fees hiked by up to 400%, while more recently a practice had its service charge triple to over £100,000 in four years.
Pulse also revealed that a GP practice had been asked by NHSPS to pay half a million pounds in service charges for ‘non-existent’ services and in February 2020, a number of practices were threatened with bankruptcy due to unpaid rent.
In October 2020, NHSPS hiked service charges for GP practices in England to meet Covid-related costs.
