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The Premises Costs Directions 2024 now in force - a step in the right direction?

on Friday, 10 May 2024.

Several years in the making, The National Health Service (General Medical Services - Premises Costs) Directions 2024 (The 2024 Directions) were published on 9 May 2024.

Like their 2013 counterpart, the 2024 Directions provide guidance to NHS England on the provision of premises funding to GP practices in England with a GMS contract. The 2024 Directions replace the 2013 Directions and take effect from 10 May 2024.

It is still very early days to know what impact the 2024 Directions may have. However, we consider some of the changes to be welcome.

  • For the first time, the 2024 Directions expressly refer to situations where contractors have handed back their GMS contract. This should provide some clarity on what will happen to outstanding grant funding, and where a practice has been unable to assign their lease.
  • The ability for an 'appointed valuer' (which is defined as a suitably qualified professional who is registered with the Royal Institution of Chartered Surveyors) to carry out valuations for NHS England (which have previously been exclusively undertaken by the District Valuer Service) should help to alleviate the considerable delays in the approval of funding applications.
  • Priority funding projects are no longer restricted to a minimum of 33% and a maximum of 66% funding, the acquisition of development land (as well as premises) is expressly mentioned, and fit-out works and improvements to premises required as a result of regulatory changes are now provided for. This indicates that in principle funding should be available in more circumstances which will be of great benefit to many practices.

Other changes are likely be less palatable to practices.

  • Applications for notional rent and rent reimbursement come with a caveat that the contractor must notify NHS England whether they do or do not accept the assessment of funding within 12 weeks. If this notification is not made, NHS England are prohibited from making the payment.
  • There is new detail as to the amount of rent reimbursement that will be payable for leasehold premises, and the procedure that must be followed on an application for rent reimbursement. This may result in delays to determination or changes to the amount reimbursed. There is also a prohibition on NHS England and ICBs negotiating directly with landlords in connection with rent determination, which is unlikely to be attractive to landlords.
  • Hand-in-hand with the widening of grant funding comes a broader range of factors that NHS England must consider, their powers in respect of claw back of funding have been broadened, and the timescales for repayment and abatement are lengthened.
  • In the context of the carbon net zero programme, the minor revisions to the 'green' considerations are unlikely to go far enough to empower practices (and where applicable their landlords) to make improvements to their premises' environmental performance.

Time will tell what the real effect of the changes to premises funding will be, and there is likely to be at least a short period of uncertainty whilst practices, ICBs, DVs and advisors find their feet with the 2024 Directions.

For more information, please contact Gemma Pouncy in our Healthcare team on 07468 698 931, or complete thye form below.

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