Time has flown for PCNs. It is difficult to believe that we are now in year 3 with the attendant growth in scale. Through our work, At Scale is aware that some PCNs are finding the growth in expected activity challenging. As Clinical Directors lift their heads from the depths of covid vaccination clinics the next set of asks from the PCN DES are there waiting for them and their network of practices. Recruiting, embedding and managing the new staff is an increasing burden for what are often limited managerial resources.
As the PCNs grow the level of turnover becomes ever more substantial. The ARRS limit for a 50,000 weighted patient PCN is now £615,000. That means a PCN, potentially, with turnover of around £1,000,000 per annum with further growth to come.
With such substantial figures there is a need for financial planning to be integrated with clinical and HR planning. That planning must:
- Enable the most advantageous application of the available funding for patients and practices
- Ensure that account is taken of the full year budget consequences of recruitment decisions in the current year – so it is affordable in the longer term
- Make sufficient provision for expenditure not funded by ARRS, including non-applicable expenditure and the excess of cost over the maximum reimbursable sums per post.
- Have a multi-year view reflecting intentions for the next two years.
The financial planning is quite complex, but not unduly so. If you are a PCN without a financial plan (aka a budget) for 2021/22 do not worry, you are not alone but should act quickly. We should be planning to make optimal use of the available funding – use it or lose it. That needs an appreciation that recruitment takes time – spending this year’s ARRS could be challenging if the process of securing staff has not already started.
My fear for the current year is that many PCNs will be considerably underspent against their ARRS funding but overspent on the expenditure covered by the core funding. That is unlikely to be popular amongst member practices who probably have to make up the shortfall.
Ironically, the more successful a PCN is in bringing the additional roles on board the more challenging it may be to fund the other expenditure – possibly leaving practices to contribute to it. It also means that budgets have to be managed well and any Development Funding used wisely. Regular and accurate information on expenditure against the various funding sources is a must. Decisions then have to be made as to how make best use of the funds and to bridge any shortfalls.
Income from the IIf also needs to be managed. This year is odd as most of the criteria have not yet been announced. (And of these that have Flu Vaccinations are some way from imminent). But there is money to be made in the interim if actions are prioritised towards the three measures that are initially active.
So, in summary, get a financial plan in place and remember you have to monitor it and take action through the year to stay on course. And if you need help we are ready, willing and able!