A CHANGE to the way business rates are calculated for GP surgeries is set to cost Wychavon District Council millions of pounds in historic payments.

Managing director Jack Hegarty has sent a letter, along with the chief executives of the county’s other district councils and Worcestershire County Council, asking the Government to urgently review the situation.

The move follows a ruling from a valuation tribunal that resulted in a change to the way rates for purpose built GP surgeries, including in Droitwich, are calculated - meaning in future they will pay significantly less.

As a result a number of GP surgeries have made successful appeals to the valuation office against the value given to their property in 2005 and 2010.

It is estimated surgeries in Wychavon will receive a £3.5milliion refund and £600,000 a year on an ongoing basis from this financial year.

Wychavon, Worcestershire County Council and Hereford & Worcester Fire Authority will be responsible for half of the total losses. Wychavon will have to pay the majority share which will total £1.4million and £250,000 a year ongoing.

It is understood the money related to the historic payments will be retained by NHS England and the future money by local Clinical Commissioning Groups.

Wychavon, and other Worcestershire councils, are appealing to the Government for support as prior to 2013, business rates were collected centrally by the Government and redistributed according to a set formula as a grant. It is only since 2013 Worcestershire councils have been able to retain half of the rates they collect locally.

Councillor Lynne Duffy, portfolio holder for resources on Wychavon District Council, said: “We know a number of other authorities have been similarly affected and expect the issue to eventually have an impact across the country.

"We are raising the issue and the unfairness of the situation with MPs, the LGA and district council representative bodies.

“This decision will place even more strain on our finances. The one off refund will have to come from our cash reserves and the ongoing loss will have to be made up through further efficiency savings, carrying out more income generating work for other councils and growing the business rates base by providing land for new and expanding businesses.

“We’re hopeful the Government will listen carefully to our concerns on this matter. I also sincerely hope that any money retained by the NHS will be spent for the benefit of local patients.”