Norfolk hospitals and councils face fight over millions of pounds in business rates

General view of the Norfolk and Norwich University Hospital at Colney.

General view of the Norfolk and Norwich University Hospital at Colney. - Credit: Evening News © 2009

Towns halls in the region are gearing up to fight a potential attempt by the cash-strapped NHS to win a reduction in business rates similar to that enjoyed by charities.

South Norfolk council leader John Fuller has warned district councils could be left with a 'crippling burden' if property surveyor Bilfinger GVA succeeds in winning rate relief on behalf of NHS Trusts.

While the hospitals in South Norfolk, West Norfolk and Great Yarmouth have not made any applications yet, council leaders fear that if the bid is successful elsewhere, it could set a precedent.

Charities are currently entitled to an 80pc discount in their business rates and Bilfinger GVA said it had made applications to councils on behalf of NHS Trusts after seeking legal advice, although it would not disclose which ones.

But Mr Fuller said the Local Government Association was seeking its own legal advice and looking at what safeguards might be put in place to protect councils and local rate payers from the loss of income, and the crippling burden of paying potential refunds.

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He also fears it could pave the way for other public sector bodies to seek a discount. 'Local councils are not running a social security fund for the rest of the public sector,' he said.

South Norfolk believes that if the Norfolk & Norwich University Hospital (NNUH) NHS Foundation Trust were to apply for a change in rates the council could see revenue for current and backdated rates drop by £11m, with an ongoing loss of £1.98m. The NNUH said it had not made an application for mandatory rate relief, but it did work with a consultant each year to negotiate the best rate.

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West Norfolk Council leader Nick Daubney said they were aware of the issue, but had not been approached by the Queen Elizabeth Hospital. 'We have made no provision in our budget this year to deal with that because we have had no straightforward notification. I understand some hospital trusts have some opinion they could make this application. Should we receive one we would almost certainly contest it, as I'm sure councils and groups of councils will.'

He said the estimated impact for West Norfolk was £3m.

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