Peterborough and Stamford hospitals trust hit by 43% rise in business rates under new system
The trust which runs Peterborough City Hospital and Stamford Hospital will have to fork out more than Â£1 million more in business rates from April.
The 43 per cent rise in rates will force the trust, which lost £37.1 million in the last financial year, to find new savings according to chief executive Stephen Graves.
The new cash burden comes after the rateable values of business properties was increased, meaning hospitals in England will pay £64 million per year more over the next five years.
Stephen Graves, Chief Executive Officer at Peterborough and Stamford Hospitals NHS Foundation Trust, said: “The trust has seen an increase on business rates of £1.2 million which is an increase of 43 per cent in a year.
“This has created a rise from £2.7 million to £3.9 million which means that the trust will now need to put additional cost efficiencies in place, on top of the savings that we had already planned for, to ensure that we reach our financial control total for next year - 2017/2018.”
According to property consultants CVS, the trust will be the third worst off out of all hospital trusts from the rise in business rates.
Only the Queen Elizabeth hospital in Birmingham and the Royal London would lose out more.
CVS, which revealed the new business rate figures, says the trust in Peterborough will be paying £1.82 million a year more on average over the next five years than it currently does.
Mark Rigby, chief executive of CVS, said: “Theresa May’s Government has the aspiration to cut corporation tax to the lowest level in the G20, but what we need more than ever, given the current and future challenges facing both the public and private sectors, are competitive property taxes.
“The focus must be on the business rates yield, as this is currently the highest of any G20 country both as a percentage of GDP and overall taxation.”
NHS trusts claim they should be classified as charities, meaning they would be eligible for an 80 per cent tax discount, but this has been rejected by local councils.
Many private healthcare groups are registered as charities and benefit from such tax breaks.
Rateable values are set by the Valuation Office Agency, a government agency, and then multiplied by a business rates multiplier (set by central government) to form business rates.
However, a spokesman for the Department for Communities and Local Government said the Government has no involvement in the setting of rateable values and that it has recently reduced the multiplier.
He added: “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.”