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The Isolation Of Debt – The Next Step

The serious issue of debt and financial strain is very real. Who or where does a GP turn, when a conversation is needed?

There are issues that will always arise in relation to debt, but there are solutions for GPs.

The first places of discourse are usually identified by the practice manager, book-keeper and accountant. These are all influential sources for the first financial lines of communication. However, the advice to address many issues can be very short term with potential solutions presented of up to five years. Seldom is there access to advisers who have the ability to plan twenty to forty years in the future. The ability to plan on a generational level is a discussion that has to be had.

Society Changes, But The GP Requirement Stays

We all need health care of some description. At some point during out lives we need to be in front of a physician. No matter how much the digital revolution becomes part of our everyday lives, there will always be a requirement for human interaction to look at, consult, inspect and diagnose. This will certainly require premises to deliver that service.

Property is generally regarded as one of the biggest burdens and blessings, depending on which side of the fence you reside. Over the years many GP premises have remained stationary, whilst the growth and demands of the community puts pressure on surgeries to expand and deliver a better provision of primary care services.

The solution for many GPs has been to secure loans to provide bigger and more focused space. GPs committed and looked at how it was going to be paid for. This is predominatly been via the NHS through reimbursement, cost or notional rentto allocate funds for the provision of the premises. The altenative situation could be that the NHS owns the health centre and the GPs move in to provide the service (no premises costs, just providing the service).

There is still the widely held assumption that owning property is a sound investment. Generally it is, however, we have to look at the use of the property to define the value of the space. For instance, the capability of property to deliver a service changes from where it was 10 to 15 or even 30 years ago. The situation is exacerbated for a number of GPs in having interest only loans where there is a mortgage on a building that maintains its service delivery role but does not hav the cash flow ability to pay down the debt. This becomes one of the biggest debt problems for GPs when they come to retire or the service provision changes over time.

To become an attractive proposition for a future partner to invest in the bricks and mortar , upgrade to current regulations and to eventually buy-out does not become as attractive as first anticipated. GPs are becoming stuck, but there are options.

So, What Is The Solution?

Charles Higgins Partnership have a dedicated fund to provide an exit option through the purchase of your interest, subject to taking out a 20yr lease (subject to NHS approval) and then working in partnership with you create a plan for new premises or modify and expand the existing premises. In the case of a new build you would surrender your old lease on taking a new lease of new premises. It is the Charles Higgins responsibility to deal with the challenges of disposing of the old premises.

As a retiring GP, the Charles Higgins Partnership team can provide creative solutions to exit issues. They understand there are challanges to face in the short term, but are aware of and have implemented interesting solutions.

We work with our associated partners to consider options to find alternative solutions and work alongside GPs their accountants and planners to create a collaborative effort, a true partnership. The whole objective is to identify different avenues to benefit all parties, there is no one solution.

It all comes down to starting a dialogue. If you are currently facing difficulty lets look at it in detail together. It is important to understand where you are today and what can be achieved. There is support and experience, it doesn’t have to be isolating. Call Jon on 01202 744990 or email jon@charleshiggins.co.uk



“To end my working days in such a place considering that 31 years ago when I started we worked from two very small rooms. It’s been magnificent.”

Dr Geoff Walder, Retired Senior Partner, Lilliput Surgery, Sandbanks

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