GPs' pounds 513,000 expansion raises fear over profits

A GP fund-holding practice has saved more than pounds 500,000 from its drugs budget and wants to use it to develop a new surgery. But Avon Health Authority has blocked the plan, saying that it would create a "substantial profit to the practice" because of the GPs' ownership of the equity of the premises.

The case has caused particular concern because of a recent attempt by the practice to cut the number of its health visitors from two to one.

The authority has told Dr Roger Rolls and his partners in Bath to suspend plans for a satellite practice in nearby Bathampton, and wants further talks.

The authority had given earlier permission for a smaller pounds 280,000 development but was surprised to discover that the plans had been expanded, without permission, to what it described as a "very substantial" pounds 513,000 scheme.

In agenda papers, John Watson, the authority's development director, reported the audit sub-committee's view that the practice should not make a profit out of the development.

"It is implicit within fundholding that the scheme should not work in such a way as to provide those participating with a personal profit," he said.

The Manufacturing Science and Finance union (MSF) said that the proposal raised serious questions about the amount of National Health Service money now held, unused, by fund-holders. Roger Kline, MSF national secretary (health), said: "Where has this money come from? Was the practice over- funded or is it because they have saved on patient services?"

Mr Kline said that the issue was not just a local one because the amount of money in fund-holder savings was virtually equal to the pounds 100m sum the Government has vowed to find through cutting bureaucracy. During 1994- 95, the Audit Commission, the public spending watchdog, noted pounds 95m of such "savings".

Mr Kline said that the Government regarded health visitors as key workers in areas such as child protection and working with the elderly: "They are the corner-stone of preventative health care."

Yet instead of being spent on such posts, money was going on buildings which, in effect, acted as a deferred pension for the GPs.

A spokeswoman for Avon Health Authority said that the authority had a duty to ensure that money was being spent properly and had asked the doctors to look again at their plans. One of Avon's suggestions is that the partners should provide more of the funding for the development from their own resources.

The authority estimates that if the practice were to rent its premises, it would cost in the region of pounds 39,000. It believes this notional rent should be taken into account in the budgeting of the development.

Although this has not been done before, the authority notes that "had there been profit elements in past schemes it is unlikely that they would have been on the scale of this particular development".

The money was saved from the drugs budget over four years. However, the practice's patterns of prescribing are similar to those of other surgeries.

No one from the practice was available for comment.