NHS calls for equality over private hospitals’ discounts

NHS trusts are calling for equality on business rates after it has been revealed that private hospitals get discounts worth £52 million over five years.

A study has suggested that more than one in four private hospitals are charities, resulting in an 80 per cent rebate in business rates.

But NHS trusts have to pay in full, and will face a£300 million increase in rates over the next five years.

Research using Freedom of Information Act requests by CVS, a property valuation company, suggests that around 27 per cent of private hospitals receive business rates relief.

Local authorities reported that 123 out of 457 private hospitals were charities, and so they could have the 80 per cent rate reduction. No information was provided for a further 169 private hospitals in England and Wales.

CVS calculates that the 626 private hospitals would have been expected to pay a total of £241.4 million between them. But accounting for the institutions that are known to receive the discount for charities, the company expects to save £51.9 million.

Nuffield Health, whose income makes it Britain's third largest charity, is expected to pay just £3.2 million over the next five years, saving £12.7 million because of its charitable status, according to the analysis.

Dozens of NHS hospitals wrote to local authorities last year to try to claim the reduced business rates, but the Local Government Association rejected the claim, as they are not charities in law.

The revaluation of business rates, which came into effect in April, has increased NHS hospitals’ tax bill by 19 per cent to £366 million a year.

University Hospitals Birmingham Trust is appealing against a rate rise of more than £2 million a year.

A spokesman for the trust said: “The trust believes there is an anomaly in how NHS trusts are treated for business rates when compared to other organisations such as universities, charitable care facilities and private hospitals.

"NHS Trusts receive no additional funding to offset business rates costs.

"We are therefore, alongside other NHS trusts, part of a long-running challenge to seek a similar level of charitable relief on business rates, similar to non-profit organisations."

Mark Rigby, chief executive of CVS, said: “It is iniquitous that NHS hospitals pay normal business rates but 26.9 per cent of private hospitals, using charitable status, receive an 80 per cent discount."