Which NHS Premises Cost Directions apply now?
Next in our series of blogs on the new Premises Cost Directions (PCDs), which came into force on 10 May 2024, we explore whether the 2024 PCDs apply to your existing reimbursement or application for reimbursement or other existing request for financial assistance.
We set out five FAQs to help you navigate the new PCDs:
1. Will the new PCDs apply to continuing existing actual or notional rent reimbursement applications?
Yes. They will now be paid pursuant to the provisions of the new PCD.
2. Will the new PCDs apply to borrowing costs pursuant to Directions 37 and 38 of the 2013 PCDs?
Yes. They will continue to be paid pursuant to the 2013 Directions. New applications will fall under the 2024 Directions.
3. What is the position if your application (whether for new rent, increased rent or other financial assistance) was made prior to 10th May 2024 and has not yet been determined.
If any part of your application relates to ‘costs incurred’ before 10th May 2024 then these will be determined under the 2013 Directions.
If any of the costs are to be incurred after 10th May 2024 then the new PCD apply. Although the drafting is unclear it is assumed that the costs to be incurred split across the two sides then the relevant Directions will apply to the relevant part of the costs depending on when they were incurred.
4. What is the position if your application is in relation to a rent review which fell before 10th May 2024 but has not yet been determined.
This is more problematic but is likely to be a common issue. Which Directions apply may depend on when the application was made, when the revised rent is determined and may be different for the uplift than the main rent. It will be interesting to see in practice how these provisions are interpreted.
In practice, it is advised to comply with the requirement to accept or appeal a decision from the district valuer within 12 weeks so that you are compliant with this requirement in the event the new Directions apply.
5. What if you have received financial assistance pursuant to the Directions in error either in whole or part.
The 2024 Directions require a contractor to notify NHS England of any overpayment and to repay it. An overpayment includes payments made in error, payments made in respect of a charge which was later refunded to the contractor, payments made where the contractor did not meet the requirements for entitlement or the payment was calculated incorrectly.
Whilst there may be an argument that these provisions only apply to payments made pursuant to the 2024 Directions it could potentially also be retrospectively applied and contractors should ensure they check that the amounts they are receiving are and continue to be correct. This includes checking those changes in the partnership, premises, borrowing or services provided have not changed your entitlement to reimbursement and notifying the Integrated Care Board where there is a change.
To find out more about the implications of the new PCDs, you can read our blogs in our PCDs series:
- GP tenants
- Development and improvement of GP premises
- New Primary care Premises Costs Directions come into force
Do get in touch, if you'd like to discuss any of the issues raised here.