An ICB ruling that a developer’s reimbursement demands for a new GP practice were unaffordable has led to the involvement of Health Secretary Wes Streeting.
Assura had been appointed as the specialist medical developer for a branch surgery of Woodlands Medical Centre in Didcot, but Buckinghamshire, Oxfordshire and Berkshire West (BOB) ICB said last month its proposed reimbursement levels ‘exceed what is affordable’.
The GP practice was planned to accommodate the 3,000-home Great Western Park housing estate over a decade ago, but while the estate is nearing completion, BOB ICB is now ‘working to identify an alternative developer’ for the practice.
Speaking to BBC Radio Oxford last week, Mr Streeting said he had personally been ‘drawn in’ to the case and that the Government was ‘doing everything we can’ to find a new developer ‘sooner rather than later’.
The Department of Health and Social Care did not respond to a request for further information.
Last month, the ICB concluded Assura’s reimbursement proposals had ‘been assessed as not representing value for money and not meeting the requirements of the Premises Costs Directions 2024’.
‘While the ICB recognises the increasing costs of delivering new healthcare facilities, the latest proposed reimbursement levels – driven in part by new investor funding requirements– exceed what is affordable within the agreed envelope’, the ICB said.
At a December meeting of Vale of White Horse District Council, the planning authority, cabinet member for property and housing Cllr Andy Crawford said: ‘The developer requires a lease commitment before construction, and GP partners – who are personally liable for debts – must ensure rent levels are sustainable.
‘Current finance costs under private models are very significantly higher than public borrowing, which creates affordability issues.’
In a further council statement, Mr Crawford said the situation was ‘indicative of current government policy on private finance in health care’ and showed its ‘inherent weaknesses’.
‘I am personally not supportive of the private financing of healthcare facilities especially because it creates financing costs to be borne by the health sector which can be up to double that compared with capital raised direct by the Government’, he said.
The ICB said it is now seeking expressions of interest from developers ‘capable of delivering the new building within the financial parameters agreed by the district valuer’ and it hoped to build the new practice ‘as soon as feasible’.
An Assura spokesperson said: ‘We continue to engage constructively with the ICB, as they work to deliver the critical healthcare infrastructure the local community needs. We will provide any updates in due course.’
Last year, Altrincham-based Assura merged with Primary Health Properties in a £1.8bn deal. The Competition and Markets Authority (CMA) investigated whether the acquisition would lead to a ‘substantial lessening of competition’ but it was ultimately approved.
This story first appeared on our sister title Pulse.
