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Find answers to common queries and questions


Primary Care Networks (PCNs)

This FAQ document accompanies the summary of the 2019 contract. It is based on questions posed by LMC reps and also other GPC reps during debates. The answers are based on information gathered from NHSE, GPC Exec and LMC Executives in other LMCs. Where the answer to a question has not been immediately apparent, I have sought an answer from the Chair of GPC. The purpose of this guidance is to advise on how contract holding partners can get the best possible results for themselves and their practices – the fundamental primary objective of the LMC. 

Please read the summary before these FAQs. Citations in blue note where in the agreement document details can be found. 

What is a PCN?

A Primary Care Network is the new building block of community-based care. It is a provider-based entity made up of contract-holding GMS/PMS/APMS practices. They are designed to shift control of delivery of community services from commissioners to providers. PCNs are a crucial component of the NHS Long Term Plan and can be seen as a “bottom up” reorganisation of the system placing the funding and control of delivery into the hands of contract holding GPs.

Who can form a PCN?

Only practices who are eligible for the PCN DES, by virtue of holding an in-hours, essential primary medical services GMS, PMS or APMS contract, can form a PCN. (4.7 pp26)

How big can a PCN be?

A PCN should be 30,000 to 50,000 patients in size. Although these are not strict nor legal requirements, deviation from these limits should be the exception not the norm. This ideal size is based on evidence gathered by NHSE regarding Vanguard programmes and Primary Care Homes, based on the optimum size for group working. NHSE guidance says a PCN “needs critical mass to do its job” and also should “operate on a small enough scale to make relationships work” (4.22, pp29)

Why is the LMC warning against being greater than 50k in size?

The LMC is advising practices to exercise caution before forming a PCN which is much greater than 50k in size. This is because as the size of the PCN goes up, the following things are at risk of happening:

  • Less relative influence and control over PCN level function by partners and practices
  • Potential for loss of control over partner earnings – As the Balancing Mechanism links partner profits with PCN payments this means as an individual partner your PCN may take actions which indirectly affect your pay. The greater the size of the PCN, the less control over this you would have.
  • Less benefit of staff reimbursement in year 1, as in this year staff entitlement is not capitated
  • The larger the PCN the less adaptable it is as the DES changes over time which could affect what services are negotiated both nationally and locally
  • Possible disadvantage and difficulty in future DES delivery as future funding and schemes are likely to be modelled on PCN sizes of 30-50k
  • You are less likely to be able to extricate yourself from the PCN DES should it prove not to be beneficial to your individual practice in the future.
  • Lower likelihood of maintaining individual control of locally enhanced services as these are rolled into PCNs in the next few years

Ultimately though, it is up to the practices to decide how big they want to be, but the LMC would advise practices to weigh up the risks of whatever they choose.

Is there a disadvantage over being 30k in size or slightly smaller?

It depends. The contract agreement explains that 30k or smaller is actually likely to be beneficial in rural areas which cover a large geography. Indeed, having a PCN of 50k or larger in such a setting would be logistically challenging. Conversely, having a larger PCN in an urban area would be preferable due to the increased population density. Benefits of smaller PCNs include efficiency, autonomy and relationships, but this should be weighed against the benefits of larger PCNs which include resilience and economy of scale. (4.21, pp 29)

If we’re a big enough practice, can we just form a PCN on our own?

Yes, you can. However, this is only likely to be of benefit to you as a practice if you are toward the larger end of the PCN scale. The LMC would advise against any practices at the 30k end of the scale from forming a PCN on their own as they are likely to find it harder to meet their DES obligations in the medium to long term if their PCN is just one practice, as well as risking being outbid for services by other, larger, more diverse PCNs. (4.22 pp29)

What about our projected growth? Should we account for this?

The guidance and current GPC accessory documents are based on your current size and they take projected growth into consideration. Whilst your growth should be taken into consideration when considering future projects by your PCN, it should not discourage you from forming your PCNs, if for example you are already close to 50k and concerned about going over this amount.

Can CCG localities turn into PCNs?

PCNs are intended to be designed and controlled by practices, not CCGs. Aside from the fact that localities will ordinarily be too big to form a PCN, it is up to the practices to decide how they wish to group together, with the support and assistance of the LMC and the CCG. If any practice(s) feel they are being pressured by any organisation to form in a certain way, they should report this to their LMC. (4.18 pp29)

Does the Clinical Director role have to be filled by a GP?

There is nothing in the agreement which specifically mandates this role be filled by a GP. However, the requirements in the role description would be difficult for a non-GP to meet. The £0.69 per head funding for the Clinical Director role does not all need to be spent on one person. The PCN (particularly larger ones) may wish to fund a team of people, or backfill practice management time. However, a single clinician should have nominal responsibility for the PCN. (Annex E, 1.1, pp96)

Can a Federation form a PCN?

A Federation cannot, in its own right, form a PCN as it does not meet the criteria mentioned above. However, the practices which form the PCN may choose to subcontract services or delegate work to a Federation if it is in the practices’ interests. It should be noted, however, that where a PCN delegates work to an outside body in this way, the member practices will always still ultimately retain all responsibility for delivering the service specification of the DES, as only they can hold that contract. (1.31, pp14)

How does the money flow?

Each PCN must have a dedicated bank account, with a nominated account holder. The account holder could be a lead practice or the PCN may delegate account holding to an external organisation such as a Federation. As above, it should be noted that even if account holding is delegated, responsibility and liability for DES delivery cannot be delegated. Given the balancing mechanism relating PCN expenditure to partner pay, the LMC would strongly advise GP partners to consider all options carefully before delegating account holding itself to a body outside the practices of the PCN. (4.32 pp31)

What are the tax implications for the account holder?

Issues of tax and VAT are still being worked out by GPC and further guidance will be forthcoming on this. Practices can draw profits from their PCN, or invest capital vice versa (although they should note the balancing mechanism before doing so). Profits which are either held by the lead practice or distributed among all practices will be taxed the same way as all practice income. The LMC will produce further guidance on this in due course. (GPC)

Is dispensing income factored into the Balancing Mechanism?

No. The balancing mechanism links global sum to PCN funding. Dispensing funding is a separate non-core income stream.

Is the lead practice solely liable?

A network agreement will exist between all practices in the network to ensure that on the one hand the lead practice doesn’t have sole entitlement to all benefits and profits, but also to ensure they are not left liable for all finances, employment and other risks. This agreement will be akin to a partnership agreement in a partnership, and will be drawn up by the GPC. (GPC)

Does a PCN have to be CQC registered?

This is not yet clear. It will depend on whether a service the PCN is providing is provided separate to practices (eg: in a Hub) or provided at practice level. GPC have said this is still being discussed and guidance will be forthcoming, but GPC confirms there is no intention by anyone to create new registered bodies. (GPC)

What is the role of the LMC?

LMCs are written through the contract agreement as the representatives of both the practices which make up PCNs and the PCNs themselves. PCN formation and specification must be agreed with both the LMC and the CCG. GPC and NHSE have committed throughout the document to support LMCs and CCGs respectively in delivering PCNs. (1.28 pp14, 4.9 pp27, 4.20 pp29)

What is the role of the ICS?

Integrated Care Systems will act as an overarching body with PCNs as the building blocks. Each PCN Clinical Director will have a say in ICS management at high level. The ICS will link everything together at a larger scale together with linking up with acute trusts, mental health, social care etc. However, the formation and running of PCNs themselves is decided by their member practices. (4.23 pp30, 4.28 pp31, 4.38[iv] pp32)

What is the role of Federations?

This deal does not replace Federations nor render them obsolete. On the contrary, Federations will play an important role in offering bespoke services to PCNs depending on each PCN’s needs and resources. Federations will need to adapt and evolve as they will no longer be bidding directly to CCGs for at scale contracts on behalf of their members, but instead will be bidding to their members to provide multiple services collectively with economy of scale. The LMC is working with all Federations in supporting them in providing the best possible services to practices. (1.31 pp14, 4.32 pp31)

What is the role of CCGs?

CCGs will have to approve the footprint and registration of all PCNs. They are also required to fund the £1.50 DES money from their general allocations. As well as and in addition to this funding, CCGs are expected to provide support “in kind” to PCNs to support and assist them in formation and future delivery. (4.38[iii], pp32)

Can CCGs use existing primary care funding to pay for their DES obligations?

No. Both GPC and NHSE have made this clear in NHSE Operating Guidance and the Contract Agreement that the PCN DES is to fund additional, not existing capacity, and that CCGs should continue local investment over and above this deal. The £1.50 DES money is recurrent, new money. Any suggestion by CCGs that they are planning on cutting existing funding should be reported to the LMC, who will lodge a complaint with the GPC and NHSE centrally. (1.28 pp14, 4.38[ii], pp 32)

What happens if my practice doesn’t want to join a PCN?

Your practice would still receive the uplift to core funding and the benefits of the rest of the contract, including the state backed indemnity scheme. You would, however, not receive the SFE £1.76 per head entitlement, nor any share of the PCN DES funding. The PCN whose footprint your practice sits in would receive your share of that DES funding. Your patients would have access to any network provided services, via those practices. The LMC would strongly advise any practice against opting out of the PCN DES. (4.19, pp29)

What happens to Local Enhanced Services (LES)?

The document says that “CCGs in discussion with LMC(s), will need to review their local enhanced services in the light of the new Network Contract DES, so that their additional local funding for general practice secures services that go beyond national contractual requirements.” This means such locally enhanced services should continue. However, the agreement also expects that “most local contracts for enhanced services will normally be added to the Network Contract DES” meaning that they will become the responsibility of PCNs to deliver, rather than individual practices. (7.13 pp54)

Does the above mean my practice will lose all its Locally Enhanced Services?

No. It is entirely within the gift of the practices which make up the PCN to simply continue the status quo, with funding flowing through the PCN. However, this is an example of how crucial it is for practices to retain total control over how their PCN is managed and how funding is directed.

How many additional role staff are each PCN entitled to?

In year 19/20, each PCN gets 1 pharmacist and 1 social prescriber. Going forward over the next 5 years, further staff will be capped at their proportional entitlement of the national maximum allocation, which will depend on the capitation of the PCN. PCNs will be limited on how many staff they can hire by their maximum proportional financial entitlement, rather than strict head count figures. (1.32 & 1.33, pp15)

Is there an advantage to being of a certain size?

The optimum recommended size of 50k is based on evidence of working at scale provided by Vanguards. Larger than this, the relational and community benefit is lost as shown in NHSE’s data on “Primary Care Homes.” Technically in year 19/20 a 30k and 50k PCN would each have the same entitlement to only 1 pharmacist and 1 social prescriber, suggesting advantage at being smaller. However, after April 2020, this entitlement will be capitated, removing this benefit. Furthermore, a 50k PCN will have more money left over in 20/21 as the baseline DES money of £2.01 (in year 19/20) per head will be larger for them than a 30k. The LMC advises practices to form PCNs of as close to 50k as practicable. (1.32 & 1.33, pp15)

Do we have to pay maximum Agenda for Change pay scales?

The AfC pay scales determine the maximum amount which can be reimbursed. You may employ someone for less than this, but would still only be entitled to 70% of their actual salary plus on-costs. (1.26, pp13)

How will the problem of limited premises space be dealt with?

Practices should consider the issue of buildings and logistics when they form their PCN. Future innovation & impact funding which will commence in 2020 and further similar initiatives will follow. There is scope for premises support funding to fall within these pots of money in future. The GPC will continue to negotiate on items such as this at annual contract negs. Furthermore, CCGs are expected to engage with PCNs to meet NHSE’s Long Term Plan objectives and will need to prioritise such issues to meet their obligations. (7.12, pp53)

What do we do if we’re not happy?

As this is a DES, you are free to leave your PCN at a later date by simply opting out of the DES. Similarly, all the practices in a PCN can hand back the DES simultaneously, essentially dissolving the PCN. The LMC would advise all practices to take a two-year view and consider if/how to continue with the DES depending on what effect this has on their own practices and delivery of services, as well as what support both in cash and kind is forthcoming from NHSE and CCGs. The LMC will be watching the situation closely and gathering feedback from practices to pass back to GPC to guide ongoing negotiations.

PLEASE NOTE: We will shortly be adding a separate PCNs only FAQs section.

With thanks to BBOLMC and Dr Matt Mayer for permission to share.