The environmental performance or sustainability of buildings has never been more relevant to the primary care estate than now. With NHS England’s commitment to achieving net zero by 2040, increasing public consciousness of the importance of environmental sustainability and the impact on finances from high energy costs, spending time to understand and improve your surgery premise’s sustainability and energy performance is time well spent. This blog sets out some considerations for Practices that own their own surgery premises. A future blog will consider issues for those Practices that lease their surgery.
The impact of high energy costs aside, if you own your own building, its sustainability or energy efficiency credentials are likely to have an impact on its value. Market commentary suggests that it is not so much the case that high-performing buildings attract a premium on their value, but rather that is assumed to be the norm, and as a result, poorly performing buildings attract a discount on their value.
A discount on valuation based on the energy performance of your property could impact how much you may be able to borrow from a bank, which will have a knock-on effect on being able to fund the buy-in of future partners. It is also likely to influence the price you will receive for your property if you sell it to an investor. For some investors, it is one of the first things they look at – some will only consider acquiring surgery premises that meet a minimum Energy Performance Certificate (“EPC”) rating, for example, a C or above.
Even if you are not considering selling or mortgaging your building, the energy performance of your surgery can limit what you can do with it as an owner. By law, with very few exceptions, if you want to grant a lease of part of your building, perhaps to a pharmacy or your PCN, you must have an EPC rating of E or above and current proposals are that this is to be increased, to a C rating. Granting leases in breach of these requirements can lead to substantial fines.
What Can You Do To Improve the Energy Performance of Your Surgery Premises?
- Many low-cost improvements can be made which will help improve your EPC rating. Installing appropriate draught-proofing measures, upgrading to LED light bulbs and insulating your surgery can all make big differences.
- Bigger ticket items such as installing air source heat pumps in place of inefficient heating systems and adding solar panels will yield bigger returns. Finding the funds to do this, however, can be difficult. Given the NHS’s commitment to net zero, it is perhaps surprising that the current Premise Costs Directions specifically state that “improvements designed solely to reduce the environmental impact of premises, such as the installation of solar energy systems, air conditioning or replacement windows, door or facades’ must not be funded. We hope that the much-anticipated new Premises Costs Directions (publication date yet unknown) will address this.
- Behavioural change can help. Small measures such as appointing an environmental champion to promote best practice, regular reminders and helpful signage and pointers around the building can bring measurable improvements to your energy consumption.
- Monitoring energy usage can help you spot trends, allowing you to take action to reduce your energy consumption.
- Sharing knowledge within your PCN and other Practices can be a great source of support, and there are plenty of organisations within the healthcare sector that provide relevant resources, e.g. the Royal College of General Practitioners’ “Green Impact for Health Toolkit.”
Our solicitors work with GP practices and medical professionals nationwide. If you would like to speak to one of our healthcare law specialists, please email online.enquiries@LA-law.com or call 023 8082 7422.