"Doctors are permitted to buy buildings for their surgeries which are then “rented” back to the Department of Health, often for far more than the mortgage repayments. The surgery is then sold off – either to another doctor or a developer – when the GP retires and they are allowed to keep the profits from the sale of the building.
An investigation by this newspaper and the Bureau of Investigative Journalism has uncovered details of the secretive scheme, which currently costs the Government more than £630m each year.
GPs have boasted that they have made six or even seven figure windfalls from the system – the costs of which have soared by more than 70 percent in just six years.
The terms of the arrangement are even more generous than the controversial system which allowed MPs to profit from the sale of taxpayer-funded properties.
A typical surgery may have been bought for £150,000 a decade ago. The GP then could then claim tens of thousands of pounds in “notional rent” annually which is used to clear the mortgage. They could then sell the property today for more than £500,000, and often substantially more, and keep the profit."
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Which is followed by a comment from Gaeil:
" This system has existed since the beginning of the NHS. The scheme is not secret, but the sums paid to GPs are. PFI has added to the cost, but the vast majority of these payments go to owner-occupiers as 'notional rent', long after the loans have been repaid GPs reap healthy returns on the premises the NHS helped them to buy.
GPs must be compensated for the cost of premises, but those costs have risen exponentially. It is a theoretical market where the NHS pays the bill, the natural brakes of someone paying their own money is absent. PCTs also end up paying the costs of the appeal for both sides, so regardless of the merit of the case, many GPs believe that as they have nothing to lose, may as well appeal, as as no single valuataion is correct, there is always scope to nudge it up a little.
These no win, no fee 'surveyors' have few skills apart from techniques or harassment, each appeal they win adds to the evidence of the next, the Public Accounts Committee needs to compare it with the real market to ensure the tax payer is getting value for money.
Given a large semi is 500k+, it is not hard to imagine a larger house in a nice area going for £1m. As for the funds being used to modernise premises, some surgeries are appalling and they still recieve rent.
GPs must be compensated for the cost of premises, but those costs have risen exponentially. It is a theoretical market where the NHS pays the bill, the natural brakes of someone paying their own money is absent. PCTs also end up paying the costs of the appeal for both sides, so regardless of the merit of the case, many GPs believe that as they have nothing to lose, may as well appeal, as as no single valuataion is correct, there is always scope to nudge it up a little.
These no win, no fee 'surveyors' have few skills apart from techniques or harassment, each appeal they win adds to the evidence of the next, the Public Accounts Committee needs to compare it with the real market to ensure the tax payer is getting value for money.
Given a large semi is 500k+, it is not hard to imagine a larger house in a nice area going for £1m. As for the funds being used to modernise premises, some surgeries are appalling and they still recieve rent.
The system is long overdue for review, which must surely be done before GP consortia take charge."
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