Five GP practices in England have won significant reductions in outstanding service charges levied by NHS Property Services Ltd (NHSPS) following a long and complex legal case backed by the British Medical Association (BMA ).
In an out-of-court settlement, invoiced arrears for the practices were reduced from between £25,000 and more than £400,000 for the period between 2013-14 and 2019-20.
In 2013, the premises of around 3600 NHS premises in England were transferred to NHSPS, a company owned by the Department of Health and Social Care. NHSPS implemented a consolidated charging policy to levy fees against surgeries to cover rent, maintenance, and service charges. In the years that followed, the BMA said it received hundreds of reports from practices claiming that NHSPS was charging them outside their existing contractual terms and at higher levels than those charged by NHSPS' predecessors.
Five practices began legal action in 2020 because of the increasing bills they faced. The five practices involved were Valley View Health Centre in Goff Oak, Hertfordshire; Coleford Family Doctors in Gloucestershire; Bushbury Health Centre in Wolverhampton; St Andrews Medical Centre in Eccles, Greater Manchester; and St Keverne Health Centre in Helston, Cornwall.
The first phase of the case involved the practices seeking a legal declaration that NHSPS could not reply on its consolidated charging policy as a basis for issuing the new charges, and that imposition was, therefore, unlawful. Lawyers for the BMA also contested the magnitude of the fees imposed.
The NHSPS launched a countersuit against each of the practices, demanding recovery of the historical service charges.
2022 High Court Judgement
In a 170-page judgement handed down by the High Court last June, Mr Justice Edwin Johnson ruled in favour of the NHSPS. However, he said he was prepared to "hear the parties on the precise terms of the orders to be made in the five actions consequential upon this judgment, to the extent that the same cannot be agreed between the parties".
The BMA then assisted the five practices in settling with NHSPS out of court the fees and service charges for the period in dispute.
Dr Gaurav Gupta of the BMA's GP Committee described the lawsuit as "ground-breaking" and said that the settlements "vindicate the practices' assertion that, for years, NHSPS has been claiming unduly high levels of service charges without sufficient reason or justification". He said: "We’ve heard of practices facing serious financial burdens due to NHSPS charges and even worrying that they might not be able to keep their doors open, so this outcome should give hope of a fair resolution to the other NHSPS tenants struggling with rising service charges and resulting disputes."
However, Mr Justice Johnson said in his 2022 judgement that he would be "wary of classifying these five actions as test cases".
NHS Property Services 'Keen to Progress Discussions with Other GP Practices'
In a statement sent to Medscape News UK , a spokesperson for the NHSPS said it was pleased that a settlement had been reached. The spokesperson continued: "We are keen to progress discussions with the wider GP community to resolve outstanding charges. For these five cases, the judge determined that the practices should pay the reasonable cost of services reasonably provided. We look forward to working with individual practices to agree a way forward."
A spokesperson for one of the practices involved in the case said: "It’s been such a relief to know that years of stress and frustration are now finally over. If we had paid what we were being asked to by NHSPS, then our practice would not have survived, which would have impacted thousands of patients."
The BMA said it had created advice for practices to follow if they considered they were facing disproportionate service charges. It advised them to "take care when interpreting the results of these settlements and directly applying them to their own circumstances, as these are not test cases". It said that the individual obligations of tenants "will turn on their specific context and occupancy arrangements" .