As PCNs enter year 3 of their existence, they are growing in complexity.  Not only is the number of staff employed by the PCN continuing to increase, the expectations and requirements on PCNs is also going up.  The more the PCN becomes like a business in its own right (as opposed to a shared enhanced service across practices), so the importance of the PCN having a financial plan grows.

To date it has been easy enough to monitor the finances based on the individual funding streams associated with the PCN: the ARRS funding (which has pretty tight rules about how it can be claimed); the PCN CD funding (which generally goes to the PCN CD); the extended hours access payment (which generally goes to the practices who have provided it); and the £120 per bed care home premium (which is generally paid according to the beds managed by each practice).  I have not included the network participation payment as it is paid directly to the practices and by and large stays there.  That only really leaves the core £1.50 per head funding, and the PCN development monies (which are handled differently in different parts of the country) that have required any debate as to their allocation.

It won’t be so simple going forward.  This is for a number of reasons.  The first is that many PCNs have been managing the vaccination service which is highly unlikely to have exactly broken even, and so have to decide how any surplus is to be used.

The second is that the PCN CD money has once again been increased to 1 wte for the April to June period.  This creates a significant sum: a 50,000 population PCN will receive just over £26,700 extra for these three months.  Most PCN CDs do not have the capacity to work full time in the role (because of their clinical and practice commitments) so PCNs have to decide how they will make best use of this funding.

The third is the Investment and Impact Fund (IIF).  Not only will PCNs (eventually) receive payment for achievement against last year’s IIF (up to £21,534 for the average PCN), there is a small in year payment available for this year (£5,400 for mapping appointment slot types to national categories by the end of June), as well as the opportunity to earn £40.5k in total by the year end from the indicators announced.  The total IIF earning opportunity is due to rise to over £120k with the addition of the indicators not yet announced but set to commence in October.

The IIF funding has caveats not contained within the core funding and any funding earned from the vaccination service – “a PCN must commit in writing to the commissioner to reinvest any IIF Achievement Payment into additional workforce, additional primary medical services, and/or other areas of investment in a Core Network Practice” PCN DES 10.6.16.  It is the arrival of the IIF funding that means it suddenly becomes more sensible for PCNs to think about the finances in the round, as opposed to in terms of each individual funding stream.

If a PCN combines its core funding, any surplus generated from the vaccination work, the IIF funding, any unallocated PCN CD funding, plus any development monies it has been able to secure, then it can create a funding pot that it has relatively flexible use over.  There are some requirements governing some of these funding sources, but if a PCN can create an overall expenditure plan (i.e. how it wants to use the money it has), it can generally allocate the expenditure items against the different funding sources to ensure it complies with the rules.

So for example if a PCN is looking to reimburse GP time for clinical supervision of ARRS roles, or employ a PCN project manager, it may be better to allocate at least some of this out of the IIF monies rather than the core funding as it meets the IIF requirements and means the PCN then has total freedom for how it uses the remaining funding.

This financial complexity will continue to increase for PCNs moving forward.  The new PCN specifications likely to be introduced in October will have demands that require some sort of funding.  The IIF is due to be worth nearly a quarter of a million pounds to the average PCN by 23/24.  The commissioning of extended access via PCNs from next year will have its own financial (as well as operational!) challenges.

Now is the time for any PCN that has not created a comprehensive financial plan (as opposed to managing each of the PCN finance streams in isolation) to do so.  It is a good habit to create, and one that will reap significant dividends down the line.