Updated: Jun 12
If you are a new PCN Manager, a Clinical Director or a member of the network with financial responsibilities, this blog has been created to help you understand the key questions you will need to know when it comes to the financial management of the network.
In the blog titled The Primary Care Network DES | A checklist of what to focus on in Q2, I recommended a finance review.
I have recently led a Primary Care Network Finances masterclass in our PCN PLUS Programme for Clinical Directors and experienced Primary Care Network Managers.
We also have a finance module in our PCN Accelerator for new PCN Managers delivered by 2 experts with experience of managing the day-to-day PCN finances.
Lastly, at the time of writing, THC Primary Care provides PCN management to 3 PCNs which collectively includes a £3 million budget.
Based on this experience, I thought I would compile a list of questions every Clinical Director and Manager should have oversight and understanding of when it comes to the network finances.
Disclaimer: This is a general set of questions. Every network is different and Clinical Directors and Managers will need to adapt this list to fit the needs of their own networks.
In this blog, I encourage you to become competent in answering the following.
What is the vision for the network?
What are the contractual requirements of the network?
Do we have any underspend from the previous financial year?
What is the forecasted spend for the year?
What is the current cash balance in the network?
What is the typical monthly expenditure?
Who is responsible and accountable for financial activities?
Do you understand your PCN spreadsheet/statements?
Let’s get started.
Every Clinical Director and PCN Manager should know;
1. The vision for the network
This is key and will affect how the network views and manages its finances. Some networks will want to return as much money as possible to practices. Other networks are happy to invest in the network infrastructure.
It's not unusual to experience some conflict here if the Clinical Director has a different ethos regarding the network finances to other members of the network.
2. The contractual requirements of the network.
You may have other sources of income and deliverables attached to this.
In this area, Managers and Clinical Directors must understand what can and can’t be claimed under certain workstreams.
THIS IS IMPORTANT!!! You do not want to incur any claw back from your local Primary Care team due to incorrect claims. It does happen.
3. Any underspend from the previous financial year and how this is to be spent
This is important as failing to spend this could result in tax implications and failure to secure certain funding streams moving forward.
This may also impact the affordability of certain reoccurring costs once the underspend has been utilised.
4. The forecasted spending for the year
To give the network a good overview of how much underspend may occur or what further resources are required.
5. The cash balance in the network, either monthly or quarterly
In most organisations, cash is king. Networks will need to ensure and agree on a monthly float to pay for your expenses.
6. An overview of the expenditure
This will typically include:
Payments to practices eg. Extended Access
Services commissioned by the network
7. Who is responsible and accountable for financial activities
The RACI model, which I believe is a project management tool, can be used to support the financial management of your PCN.
In this context, the RACI acronym stands for "Responsible, Accountable, Consulted, and Informed."
The responsibility component helps to identify who is responsible for financial tasks within the network.
This would typically include tasks assigned to a PCN Manager or Financial Lead managing the day-to-day finances.
The accountable party typically has ultimate responsibility for the network's finances. This is typically the PCN Clinical Director.
The consulted party provides input and advice – This is typically the PCN Board and your accountant. (But not always. Remember, this is just a guide).
The informed party is kept up-to-date on progress. This would typically include practices within your network.
Using the RACI model can help to ensure that everyone understands their role in financial management and can help to prevent misunderstandings and errors.
8. How to read your PCN spreadsheet
The 8th element is not really a question, but I recommend that you take the time to understand your PCN spreadsheet/statements.
With many PCNs now responsible for budgets in the region of £500k all the way up to £2 million and beyond for the super PCNs, a spreadsheet containing these amounts of figures can be daunting.
But do not fear; take the time to create a spreadsheet which both you and your board can understand.
If the spreadsheet is too complex, you will likely;
Want to retreat from managing this aspect of the network
Won’t trust the financial decisions and options being made or blindly trust the financial decisions and options being made
Try to keep things as simple as possible and if you don’t understand, get someone to help you.
Lastly, if you required more practical advice on managing the day-to-day aspects of the finances, please check out An Introduction to Primary Care Network Finances (2022)
I hope this helps.
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I'm Tara; I am the founder of THC Primary Care, an award-winning healthcare consultancy specialising in Primary Care Network Management and the host of the Business of Healthcare Podcast.
I have over 20 years of project management and business development experience across the private and public sectors, and I have supported over 120 PCNs by providing interim management, training and consultancy.
I have managed teams across multiple sites and countries; I have an MBA in Leadership and Management in Healthcare, I'm published in the London Journal of Primary Care, and I am the author of over 250 blogs.
I have 3 children. My eldest has Asthma, my middle child has a kidney condition called Nephrotic Syndrome, and my youngest daughter has Type 1 Diabetes, so outside of work, healthcare plays a huge role in my life.