The 'National Health Service (General Medical Services – Premises Costs) (England) Directions 2004' (the 'Directions') provide the contractual rules for the funding of primary care premises under the new general medical services (GMS) contract and have applied since 1 April 2004.
They describe the circumstances under which PCTs should consider making payments to primary care practices to cover all or part of their premises costs and the nature of such payments. The 'Directions' represent a significant shift in funding arrangements for GPs – from funding individual GPs under a complex mix of cash limited and non-cash limited arrangements, to funding practices under a single, unified and cash limited funding stream. They only apply to GMS practices, but nonetheless comparable arrangements apply for PMS practices. This guidance is not a replacement for the 'Directions' and should only be read in conjunction with them.
The 'SFA' ('Red Book'), in effect until 31 March 2004, provided the legislative basis for payments (both direct and indirect) to GPs independently contracted by PCTs to provide general medical services to the NHS. This included reimbursement to GPs of costs associated with the provision of primary care premises.
Under the 'SFA' premises costs were funded from two streams of revenue: cash limited baseline allocations (based on historic expenditure patterns uplifted for inflation); and non-cash limited funds. The latter allowed PCTs to support premises developments without limitation, whereas the former was used for cost rent and improvement grant schemes. Under the new GMS contract, the premises sections of the 'SFA' (paragraphs 51, 55 and 56) have, with effect from 1 April 2004, in England, been replaced by the 'Directions' and the non-cash limited funding stream has been abolished.
The 'SFE' (part 5, paragraph 19) deals with premises development and improvement commitments under the 'SFA' ('Red Book'). It covers the building, purchase and development of premises including the use of improvement grants. This should reassure GPs committed under 'SFA' contracts. PCTs should continue to meet these costs subject to there being no significant change (in the view of the PCT) to the project since 1 April 2004. In cases of significant changes, these should be dealt with in accordance with the 'Directions'. The DH has calculated the amount of historic revenue support for primary and social care premises developments, including committed revenue expenditure, up to 30 September 2003. Baseline funds to PCTs take account of this figure. (See also 'Get approval for your scheme').
The 'Directions' support the provision of new and improved primary and social care premises in that they state that payments by PCTs should only be made where practices:
In other words, under the 'Directions', PCTs should only make payments towards premises costs where practices occupy or are planning to occupy ?modern practice premises?. In the context of the 'Directions', ?modern practice premises? can be defined as premises that a practice occupies (after 1 April 2004), that are newly-built or modernised according to the recommendations of this website and meet the ?minimum requirements? in schedule 1 of the 'Directions'.
In essence the premises budget is made up of three funding streams:
The first two funding streams represent baseline (guaranteed) allocations to PCTs, whereas growth funds come to PCTs via lead PCTs within the new, priority-based allocation. (See also 'Get approval for your scheme'). In addition, PCTs have the right to top up the baseline plus growth element from their main allocation of funds (unified budget) in order to support investment plans detailed in their SSDPs. Additional funding is also available from a variety of sources including grants or third party monies, planning gain contributions, unspent funds (?slippage?) from projects approved prior to April 2004, and regeneration schemes. It is not expected that the baseline plus growth allocation arrangement will continue after 2006/7. PCTs should, therefore, plan to use their overall unified budgets for future expenditure on primary and social care premises.
The following phrase appears throughout the 'Directions': ?The PCT must consider applications and, in appropriate cases, (having regard, amongst other matters, to the budgetary targets it has set itself) grant that application.? In other words, PCTs must consider all applications for payments as covered by the 'Directions', but are not obliged to approve bids. This means that practices should not commit themselves to premises expenditure on the assumption that they will automatically be reimbursed through their GMS contract. Rather they must obtain the prior agreement of their PCT to any contemplated expenditure on premises for which they wish remuneration. Otherwise, the practice could prejudice payments otherwise payable under the 'Directions'.
The 'Directions' are laid out in six parts with three attached schedules:
For further guidance on the 'Directions' see downloadable 'Q&A'.