No tax breaks for primary care centres

Private investment: The Government is not to provide new tax incentives to encourage private investment in the development of primary care centres.

It is understood the Department of Health has been advised the introduction of such tax breaks could be in breach of EU law.

The Department of Health is believed to have been in discussion with the Department of Finance for several months about the possibility of such tax incentives being included in the Finance Bill to be published later this week.

The proposed primary care centres, which are essentially one-stop shops where patients could access the services of GPs, social workers, physiotherapists and other healthcare professionals under one roof, are a key element of the Government's 2001 Primary Care strategy.

It has been estimated that the bill for the provision of these facilities could reach more than €1 billion. Both the Minister for Health, Mary Harney, and her predecessor, Micheál Martin, indicated that the private sector would have to be brought on board.

Mr Martin proposed shortly before he left office that the Government should consider the provision of tax breaks as a means of stimulating private sector investment. However, this was not approved by the Department of Finance, the priority at the time being the development of nursing homes and private hospitals.

The Irish Medical Organisation had pressed for the provision of tax breaks for general practitioners to develop new primary care facilities.

However, senior Department of Health figures have told The Irish Times there will be no provision for new tax incentives for primary care units contained in the Finance Bill.

Sources said the Department of Health had been advised that the provision of tax breaks could be in breach of EU law. Sources said that, in particular, there were difficulties with the concept of doctors or other healthcare professionals involved in the centres as owner occupiers receiving tax incentives.

There are already a series of tax breaks in place for other health facilities including private hospitals and sports injuries clinics.

In these cases, the tax incentive is generally made available to developers/investors.

The Health Service Executive (HSE) announced at the weekend that up to 100 new primary care teams are to be established this year. These will bring doctors, nurses, physiotherapists and other healthcare professionals into groups. It is accepted that, initially at least, they will not be based in the same premises.

Under the new plan, each of the HSE's 32 local health offices is to be asked to develop three primary care teams in its area.

The Government has provided €16 million in additional funding this year for the development of primary care. The Government has come under criticism on a number of occasions in recent years for its failure to deliver on its own primary care strategy.

HSE chief executive Prof Brendan Drumm has strongly argued that the problems of the hospital sector can only be tackled by the development of adequate services in the community.

In the absence of the proposed tax incentives, it is understood the HSE may consider entering into leasing arrangements with doctors or private sector groups who develop new primary care centres themselves.

It is also possible that in some locations the HSE may consider financing the development of primary care centres itself.