As part of the Charging Policy 2017/18, for the first time we have published a consultation document outlining proposed changes to next year’s charging policy.  

Following a period of feedback from our customers we will publish final proposals by the end of 2017 to allow them to be considered as part of future planning rounds.  

Find out more about the Charging Policy 17/18 and download a copy of the consultation proposals. Please give your feedback to the following proposals.

Potential revisions to service charges

Proposed revision A different basis of fee on the service costs where it is based on an appropriate industry benchmark fixed fee which is set by the size of the building. Fee rates would be set according which band size the building fell within. The management fee would be reviewable annually by either tracking changes in published benchmarks, or be indexed.

Rationale The revised approach is accepted as industry best practice and accords to the Royal Institution of Chartered Surveyors (‘RICS’) Service Charge Code. Fee rates tend to be similar to a 10% fee, but by moving away from the mark-up approach, it removes the incentive to the managing agent/landlord of loading the service charge with unwarranted costs in order to inflate their fee. 

Q: Please detail your feedback on the above proposal.

Service charge accounting year  

Proposed revision NHSPS has the freedom to agree with occupiers an alternative service charge accounting year.

Rationale Robust service charge accounting can never be delivered in the timescales that finance officers ideally require when closing their financial year accounts. Industry norms for service charge accounting show that it often takes at least four months, if not longer. Keeping a service charge year to the financial year optimistically assumes that final reconciliation of actuals can be delivered very soon after financial year close. As the desired outcome cannot be delivered, it makes sense not to overburden NHSPS property management accountants unnecessarily every financial year end, but to spread the workload throughout the year. It is though recognised that an alternative approach may be difficult to reconcile to the basis upon which the NHS routinely undertakes annual planning and the associated allocations process.  

Q: Please detail your feedback on the above proposal.

Service charge apportionment for additional services or higher standards of service  

Proposed revision Liability for provision of services outside of core hours to rest with those customers who request them. Higher standards of service provision for common parts and shared areas required by medical occupiers are a customer specific requirement and financial liability for the overage in cost compared to standard service provision to rest with those customer(s) who requested them.

Rationale Allows for the equitable allocation of cost where any extra cost burden is to lie solely with the party/parties who want it, and not with those who do not want it or benefit from it.

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