We interview Rob Lynch, Practice Manager at Uppingham Surgery
The Uppingham Surgery is situated right in the centre of the town just off the historic marketplace. Built of traditional Leicester ironstone, the main surgery building is an 18th century rectory, which although packed with beautiful period features, presents significant drawbacks for use as a modern medical facility. Space is lacking, there is limited internal access for those with mobility problems, there’s no car parking for patients and there are no opportunities to expand to cope with increasing patient numbers.
The Partners made the decision to move in May 2011 and started to look for a suitable location. Whilst investigating vacant units on an edge-of-town business park, Rob realised that a call centre building owned by the NFU was up for sale.
The building offered distinct and immediate advantages. As a discrete building and in its open plan state, it could easily be subdivided to meet the practice’s exact needs. It offered a blank canvas where the only constraint was the building’s physical shell. All core services were already in place, including a large car park.
Rob’s first step was to check overall affordability. He invited three local companies to provide initial cost estimates which, on the advice of the old PCT property contracts advisor, he immediately doubled. Based on this initial assessment, the partners then made an offer on the building which was accepted.
At this point, having visited other practices who had gone through a similar process, Rob realised that he didn’t have the detailed building procurement or project management experience he would need for a project of this scale and approached Neil Mason Associates.
“I immediately realised that this was a good move,” explains Rob. “We hadn’t anticipated that we would have to pay VAT on our offer price which came as a shock. Neil was able immediately to renegotiate the purchase price with the NFU, which more than paid for his fee. We also appointed Phil Weston to act as our project manager throughout the project.”
The practice entered into discussions with the PCT (as was) at a very early stage. Although in favour of the project, the PCT made it very clear that there was absolutely no money available from the purse for this project. The surgery was not on the capital investment plan and there would be no extra money on the notional rent payment.
“Given the current funding climate, the partners were not entirely surprised by this response,” adds Rob. “Despite this, we still felt that the project was worth pursuing. Neil negotiated a proportional increase in our notional rent, whereby the new surgery will attract a higher level of rent per square foot but with overall payment based on the floor area of the old surgery.”
To make the project pay its way, the new surgery includes space for a commercial pharmacy and the NFU will be renting part of the top floor back as office space. All this helped when assessing the project’s financial risk.
“The biggest risk lies in selling the current building where the partners own the freehold,” explains Rob. “Taking out a bridging loan could be seen as a risk but we are confident that with Neil Mason Associates’ help, we will be able to arrange a sale.”
The bank agreed to finance the project in principle and undertook a detailed valuation of the building and assessment of the individual circumstances of the partners. Rob comments, “It’s worth noting that the bank’s due diligence took a month which I hadn’t anticipated in the project’s timings.”
There were considerable legal difficulties with buying the building, which was complicated due to the differing interests involved. This delayed the project for 3-4 months while the issues were resolved. In the end the project cost more than had been anticipated because of increased legal fees, VAT on the purchase price and the initial cost estimates hadn’t anticipated problems with the heating system.
Rob’s advice for other practices considering a similar move?
“Don’t do it on your own,” says Rob. “Get specialist professional advice. Every project is unique, but unless you have a detailed background in building procurement, you need a trusted agent with a strong track record working on your behalf. It will save you money in the long term. We employed specialist consultants and the savings they were able to make more than paid for the consultancy fees. Build a strong team around you, with the right people doing the right job. If you trust them, it will happen.
“Do your due diligence on the contractors. The contractor we selected came personally recommended. He is quietly professional and I was impressed by his approach. I checked him out thoroughly to reassure myself that he was financially robust prior to signing the contract.
“Get as many people on board as early as possible in the process. Our consultation process took in the views of as many local stakeholders as possible including the County Council, Town Council, patients and other local residents. 85% were fully in favour of the move from the start, which was a great help.”