When PCN funding gets tough, everyone feels it

The evolution of PCNs has transformed the healthcare landscape, creating an ecosystem of service providers, technology vendors, and specialist consultancies. While this transformation has brought invaluable support to practices and networks, we’re now at a critical juncture where funding pressures threaten not just PCNs and general practices, but the entire infrastructure that has grown around them.

The expanding ecosystem

Since their introduction, PCNs have catalysed the emergence of a diverse support network. This expansion was both necessary and logical – networks faced the dual challenge of delivering more services while grappling with capacity constraints. In response, an array of organisations emerged to:

• Enhance productivity through technological innovation
• Provide specialist expertise in financial management, legal compliance, and quality assurance
• Support workforce development and training
• Deliver back-office functions and administrative support

Even PCNs and federations themselves have recognised opportunities to commercialise their innovations, sharing successful solutions with peers. This organic growth has created a symbiotic relationship between networks and their suppliers, with both parties reliant on each other’s success.

The Funding Conundrum

The sustainability of this ecosystem primarily depends on two funding streams: PCN core funding and the additional roles reimbursement scheme (ARRS). However, this financial foundation is showing signs of strain, complicated by:

1. The ‘use it or lose it’ funding model
2. Finding the funding to top up the ARRS
3. The unintended consequences of funding devolution to practices

1.The ‘Use It or Lose It’ Dilemma

Networks must either utilise their full allocation of funding within the financial year or risk losing it entirely. This creates pressure to make spending decisions quickly, sometimes at the expense of strategic planning.

In other instances, networks may find themselves criticised for not spending the money, despite a key reason being their inability to reach a consensus on its use because of the constraints around it or lack of certainty about the future. 

2. The ARRS top-up challenge

While the scheme offers funding for additional roles and networks recognise the potential value of certain ARRS-eligible services, many find themselves unable to afford the required top-up funding from their own resources. This results in valuable services remaining unused, despite being theoretically available and frustration building among practices who see valuable support services becoming increasingly unaffordable or not representing value for money.

3. The practice devolution challenge

While devolving funding to practices helps networks spend their allocation, it comes with unintended consequences:

• Variation in how roles are used
• Different employment terms and conditions, leading to recruitment and retention issues
• Increased competition between practices
• Fragmented induction, training, support and supervision
• Compromised financial governance
• Introduction of silo working
• Difficult-to-recruit fractional appointments for practices with small list sizes
• Risk of unmet DES requirements
• Irreversible decision-making
• Loss of network identity and purpose

Where do we go from here?

At a local level;

• PCNs and providers need to be transparent about costs and potential savings, balancing the long-term with the short-term.

• Be prepared to adapt as network needs evolve – this may be doing things differently which may feel painful in the short term.

At a wider level:

The Labour government, NHS England and us as a PCN community not only have to think carefully about how we protect general practices as businesses, and extend the general practice workforce funded by the ARRS, but also the cottage industry that supports it – or are we at risk of watching the slow collapse of a support structure that took years to build?

Tara Humphrey is CEO of THC Primary Care, which provides interim management training to PCN leaders and has supported more than 120 PCNs.