A HAMPSHIRE MP is urging the government to make hospitals exempt from business rates following the decision to impose huge increases.

Royston Smith, Tory MP for Southampton Itchen, has spoken out after the Daily Echo revealed that the annual rates bill paid by Southampton General Hospital is set to rise by £600,000.

Other NHS hospitals in the region have also been told to pay more, leaving them with less cash to spend on patient services.

It follows the latest revaluation of property values across the UK.

The review is supposed to take place every five years but the previous revaluation was delayed by the government for two years, making the latest increase even bigger.

Now Mr Smith, former leader of Southampton City Council, has written to the Chancellor, Philip Hammond, to highlight the “significant” financial challenges facing the NHS.

Urging the government to make hospitals exempt he claims the money currently spent on collecting the tax could be used to improve frontline services.

His letter says: “It has recently been reported that Southampton General Hospital will face an annual increase of £600,000 on its Non-Domestic Rates (NDR), bringing the total amount due to £2.53 million per annum.

“The local newspaper, The Daily Echo, has estimated that the increase in the hospital’s NDR would be enough to support 26 junior schools.

“The NHS is facing significant financial challenges in the years ahead and is rightly looking to make efficiencies to ensure value for money for taxpayers.

“The cost of levying and collecting NDR by the local authority and the exchequer is significant.

“Has any thought been given to exempting NHS premises and indeed other publicly owned premises from NDR as a way of making further efficiency savings, allowing more investment to be spent providing frontline services?”

Mr Smith has yet to receive a reply from Mr Hammond but the Department for Communities and Local Government has previously supported the decision to make hospitals pay more.

A spokesman said: “This revaluation improves the fairness of rate bills by making sure they more closely reflect the property market.

“Rateable values are set independently by the Valuation Office Agency. We’ve also given local authorities the powers to grant additional business rate relief as they see fit.

“Overall nearly three quarters of properties in England will see no change or even a fall.”

The huge hike in business rates - due to come into force from April - has sparked widespread anger.

It means the NHS, already said to be facing the biggest financial squeeze in its 70-year history, will have to pay an annual rates bill totalling £322 million. 

Campaigners say facilities such as Southampton General should be made exempt from business rates or awarded the same status as private hospitals, which are classed as charities and receive an 80-per-cent discount.

The hospital is run by the University Hospital Southampton NHS Fund Trust, which has declined to comment.