'˜Perverse' ruling would leave QA with bigger tax bill

QUEEN Alexandra Hospital is set to pay an extra £1m in business rates over the next five years.

Tuesday, 24th January 2017, 6:00 am
Queen Alexandra Hospital at Cosham, Portsmouth

In April, the Valuation Office Agency will set the values of properties based on their rental value on the open market.

The move could see the Cosham hospital go from paying £2.43m a year to £2.64m.

It means QA would have to find the extra £200,000 a year, potentially from its front-line services.

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Portsmouth Hospitals NHS Trust, which runs QA and St Mary’s, had a total expenditure of £504m in the financial year ending March 31, 2016.

Councillor Luke Stubbs, cabinet member for public health at Portsmouth City Council, which collects the cash for the government, said: ‘It’s somewhat perverse at a time when the NHS is already suffering. If the government wants to put these rates up, I hope they compensate as the NHS is struggling.’

The rate is set by the VOA on behalf of central government but the money is collected by local authorities.

Cllr Stubbs added: ‘We rely on bringing in these business rates as we have seen our funding from central government drop over the years.’

The projected figures, from business rate specialist CVS, show other hospitals in Portsmouth could face major increases. St James’s Hospital in Milton could see its rateable value increase by 25 per cent meaning that over the next five years, they will have to find an extra £187,000 to fund their tax increase.

And St Mary’s Hospital, on Milton Road, could have to pay an extra £343,000 over the next five years. The revaluation of business properties usually happens every five years but was delayed by two years. The last revaluation came into effect on April 1, 2010.

Portsmouth North MP Penny Mordaunt said: ‘It is hard for organisations to budget and make decisions over spending and investments if they cannot be sure what their outgoings would be.

‘The department of local government has been consulting on changes to business rates, but in the meantime we should be asking questions about some of the increases in these values.

‘QA has not been in touch with my office but other organisations have, in particular small businesses, and I am querying the rises as they do not seem to be based on any changes to that property or its surrounding location. In the case of the NHS there is an argument to be made that it is robbing Peter to pay Paul.’

There has also been criticism of the system as organisations that are registered as charities get a business rate relief discount of 80 per cent.

However the definition of ‘charity’ is wide and covers charitable trusts, including private hospitals.

Fareham MP Suella Fernandes said: ‘This is a substantial increase which could increase strain on parts of the NHS that are already under pressure. We should consider ways that hospitals are exempt from hikes in rates like this.’

Portsmouth South MP Flick Drummond said: ‘These figures are, of course, speculative figures, but if it does turn out to be the case, it is my understanding is that hospital trusts can apply for business rate relief. I would urge Portsmouth City Council to consider this option to avoid any hardship at QA.’

A Department of Communities and Local Government spokesman said: ‘This revaluation improves the fairness of rate bills by making sure they more closely reflect the property market.’

Portsmouth Hospitals NHS Trust did not respond when contacted by The News.