Developing and improving your surgery premises

First published in Practice Management in March 2023. 

Bryn Morgan, a partner in the healthcare law firm Hempsons, specialises in advising GPs on property matters. In this article he provides some guidance on improving your premises.

Having fit for purpose surgery premises has now become essential for a GP practice to be viable. In these challenging times for recruitment and retention, the building has a major impact – good and bad – on staff morale and a practice’s attractiveness as a place of work.

At the same time, your practice may be struggling to accommodate growing patient lists and keeping on top of Care Quality Commission (CQC) standards, as well as increasingly costly general repairs.

Your practice may be aspiring to move to new premises or to improve your current space. But where do you start? In this article I set out some key issues to consider.

Sources of funding

Having the funding is crucial to any building project. Project costs may include buying land, stamp duty, and appointing professional advisors and contractors.

Sometimes, the projects costing a few tens of thousands of pounds can be more disruptive and stressful than those costing millions, which are usually a new development off site. For GP projects, funding may be available through:

  • NHS grants (currently normally limited to 66% of the project costs)
  • Section 106/ Community Infrastructure Levy (CIL) funding linked to local housing developments, and payable as a condition of the grant of the planning permission
  • Mortgage finance
  • Private investment under third party developer (‘3PD’)

These sources of funding are underpinned by the NHS, whether in the form of capital (such as a grant) or by increased NHS notional rent or rent reimbursement. There may be a number of schemes competing for limited resources available to commissioners.

Therefore, it is important to understand local needs and to be able to demonstrate how your scheme will benefit the wider health economy. If the scheme could be shown to assist a practice merger, that could be advantageous in any discussions as the overall cost to the NHS may then be reduced by the consolidation of practices.

Design and development risk

The new or improved premises may require planning permission and will have to comply with NHS and statutory standards, including in respect of energy efficiency and the NHS net zero targets. Specialist architectural advice is essential to help ensure the design is compliant with these requirements and ideally adaptable to future changes and advances in primary care.

Getting a project off the drawing board is an expensive process which is often done at the risk of the developer. Expert advice is invaluable to help assess the lie of the land, to develop a robust business case and also to gauge the best time to discuss proposals with commissioners.

What type of scheme is right for us?

There is no one-size-fits-all scheme, and much will depend on the options available and your appetite for risk when viewed against any potential rewards.

Some may see development as an exciting project with long-term investment potential, while others may feel more comfortable working with specialist primary care developers who take the development risk in return for the practice leasing the premises typically for at least 15, and up to 25, years.

The developer and ultimate landlord may in some cases be an NHS body (such as NHS Property Services) or a local authority, with the scheme funded through public capital.

While these schemes may feel daunting, with the right expert team and commissioner engagement there are opportunities for practices to develop new and improved existing surgery premises.