Bigger bill for key hospital as rates rise

Rising business rates could cost Northumberland's key hospital almost £8million over the next five years following a 50 per cent increase in April.

By The Newsroom
Wednesday, 18th January 2017, 2:00 pm
Staff at Northumbria Healthcares new emergency care hospital at Cramlington.
Staff at Northumbria Healthcares new emergency care hospital at Cramlington.

Amid mounting pressure, concerns over whether the NHS can cope and calls for a cash injection, data provided by CVS Business Rent & Rates Specialists shows that rate bills for hospitals in England are set to rise by £322million over the next five years.

Northumbria Specialist Emergency Care Hospital, near Cramlington, is in the top 30 ‘losers’ table and will see its property assessment – the value used to calculate the rates bills – jump from £2.08million to £3.12million.

This financial year, the Northumbria paid £1.03million in business rates, but this is projected to rise annually to £1.55million on average over the next five years – a total of £7.8million over that period.

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However, the NHS trust responsible for the hospital has said that it will appeal the proposed increase.

Paul Dunn, executive director of finance at Northumbria Healthcare NHS Foundation Trust, said: “We are aware of the impending changes to business rates affecting all NHS trusts in the country due to the revaluation of property and fully intend to appeal the proposed increase for the Northumbria hospital.

“As one of the largest NHS trusts in the country, we have multiple sites over a vast geography.

“This means we already pay business rates of around £3.6million per year and while this cost represents less than one per cent of our overall annual expenditure across the organisation, our priority is always to ensure the very best value for the taxpayer when investing NHS money.”

Towards the end of last year, the Government adjusted the rateable values of every business property in England and Wales to reflect changes in the property market. The new rateable value will be used to determine the basis of the tax calculation for rates in April.

The evaluation of business properties usually happens every five years, but was controversially delayed by two years as a result of the economic downturn. The last revaluation came into effect on April 1, 2010, based on the property market as long ago as April 1, 2008.

Last year, around 80 NHS trusts in England wrote to local councils to say they should be classified as charities and therefore eligible for an 80 per cent discount.

A spokesman for the Department for Communities and Local Government said: “This revaluation improves the fairness of rate bills by making sure they more closely reflect the property market. Rateable values are set independently by the Valuation Office Agency, which uses a widely accepted method to assess NHS hospitals.

“We’ve also given local authorities the powers to grant additional business rate relief as they see they fit. Overall nearly three-quarters of properties in England will see no change or even a fall – including 600,000 who from this April will have their bills cut altogether.”