Chair of the Royal College of GPs in transactions similar to MP’s Expenses

The greatest issue of the MPs expenses scandal was not the duck house, or the digestives; but the private assets accumulated off the back of taxpayers via second homes allowances.

There is an exact parallel brewing in the world of general practice for some time now.  GPs have been accumulating private assets on the basis of PCT allowances for rents of premises. The issue is that there is no rule preventing the very GPs choosing and occupying premises for NHS services from owning the same premises.  That creates the potential for private profit, and conflict of interest.  This article focuses on the issue of private profit.

A stark example is that of the erstwhile Chair of the Royal College of GPs, Dr Clare Gerada, which I chronicle below.  I will say at the outset that I have had to piece together information on this from various sources, and some of it may be slightly inaccurate; and much of it I had to infer or impute.  But it will give the picture of Dr Gerada’s own position, of many other similar GPs, and of the general point I wish to make.

The story begins in the Summer of 2005 when the Hurley GP practice decides to take a property at St George Wharf – the luxury apartment complex overlooking the Thames and the Oval Cricket Ground. It is an exclusive development – at times enjoying the presence of luminaries such as Sir John Major, and Chelsea Clinton (why didn’t she choose to live in Chelsea?).

They spot the opportunity to make a substantial private gain.  It is an area that the PCT wishes to support (the Council itself took offices in the same development).  On the back of the property payments from the PCT, they can become the principals of a nice property.  They will develop it, get debt funding for it, and then move in.  Over the mortgage period, the PCT’s payments cover the capital and interest of the debt finance; and at the end of it they are left with a nice asset; and indeed the PCT paying them as owners the privilege for the practice using the premises.

The plan comes off smoothly.  The partners – Mark Ashworth, Clare Gerada and Arvind Madan –incorporate a company: “Tower Asset Management Limited.” They secure Units 18 and 24 of St George Wharf.  The General Practice Finance Company – a part of Norwich Union (now Aviva) – agrees to provide the debt funding.    The PCT pays the rent; and indeed agrees to rent space from them for district services!  The Hurley partners are now proud owners of the property at St George’s Wharf, which they have structured to increase in equity value on the back of taxpayers.

This is shocking in itself – that individuals can secure private gain on the back of taxpayers and the NHS is troubling.

The scandal, however, is the size of the monies we are talking about. Units 18 and 24 are reported to be 12,916 sq ft (that is huge).  The total value of the property after development is £5-6m.  And the total capital put in by each partner? £1.  (No, not £1m; £1. 100pence).  (This is according to information sourced from Companies House, St George plc, and Lambeth PCT).

So when the mortgage/ finance is paid off (off the back of taxpayer funded rents), the partners walk away with £6m and any capital appreciation in the intervening years.

To add further salt, this is not an isolated instance.  When they were selected to provide any GP service in Tower Hamlets, they did it again.  They took a property just off Canary Wharf in a new development on 100 Spindthrift Avenue (note the parallels of inner city borough, rapidly gentrifying location, piggy backing on someone else’s substantial redevelopment).  Today Tower Asset Management Limited has assets worth over £8m.

The luxury location of the first of the Hurley Group's current 12 locations

Another interesting issue is that they have incorporated a new company now called Hurley Assets Limited, whose principals also include Murray Ellender, their new partner.

All of this is highly troubling.  I started the article by comparing the issue to the problem of MPs expenses.  I still hold to that comparison.  But the magnitude of the numbers is more akin to the issue of bankers’ bonuses.  That is the scandal which we have to sort out – GPs using similar tools to MPs to get rewards similar to bankers.  And to the cast list of Sir Peter Viggers and Bob Diamond, should we now add Dr Clare Gerada?


[The photos on the left are of the four current Hurley Partners - Murray Ellender, Arvind Madan, Clare Gerada, and Mark Ashworth]