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8 key finance questions every Primary Care Network Manager and Clinical Director should know in 2024

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 consider when it comes to the financial management of the network.


In this blog, I encourage you to become competent in answering the following.


  1. What is the vision for the network?

  2. What are the contractual requirements of the network?

  3. Do we have any underspend from the previous financial year?

  4. What is the forecasted spend for the year?

  5. What is the current cash balance in the network?

  6. What is the typical monthly expenditure?

  7. Who is responsible and accountable for financial activities?

  8. Do you understand your PCN spreadsheets/statements?


⚠️ Disclaimer: This is a generalised set of questions. Every network is different and Clinical Directors and Managers will need to adapt this list to suit the needs of their own networks.





Before we get started, let's cover the current core funding streams:



🎯 To support the network's financial management moving forward, it's advisable to review your allocated income using the PCN ready reckoner here.


This list does not include every source of finance that your PCN may have, so please talk to your PCN finance lead (or ICB) if you are unsure of your entitlements.




Every Clinical Director and PCN Manager should be fully familiar with:

1. The Network Vision


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 to other members of the network regarding the network finances.

2. The contractual requirements of the network.


You will find the contractual requirements of the DES 24/25 DES can be found here

You may have other sources of income and deliverables attached to this.



3. Any underspend from the previous financial year and where this will be allocated


This is important as failing to spend income could result in tax implications and failure to secure certain funding streams moving forward.


This may also impact the affordability of specific recurring costs once the underspend has been utilised.


4. Any overspend within the previous financial year


Many networks overspend on their PCN Additional Roles Reimbursement Scheme budgets. Whilst, in most cases, this is a good thing, you still need to keep track of this as you may be liable for unforeseen employment costs moving forward. Click here to view our salary calculator.


5. Forecasted spending for the year


Being fully familiar with your financial forecast ensures the network has a good overview of where underspend may occur (and how much) and / or where further resources may be required and enables you to plan accordingly.

6. The cash balance in the network, either on a monthly or quarterly basis


In most organisations, cash is king. Networks will need to agree on and ensure that there is a monthly float in place to pay for expenses.

7. The expenditure overview


This will typically include:

  • Salaries

  • IT subscriptions

  • Payments to practices e.g. Extended Access

  • Services commissioned by the network





8. Who is responsible and accountable for financial activities


The RACI model, which 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 i.e. those tasked with managing day-to-day finances.


The accountable party usually has ultimate responsibility for the network's finances. This tends to fall to the PCN Clinical Director.


The consulted party provides input and advice. This is often 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 all of the practices within your network.

Using the RACI model can help to ensure that everyone understands their role in financial management and serves to prevent misunderstandings and errors.

9. Reading your PCN statement


I recommend that you take the time to understand your PCN spreadsheets/statements.

With many PCNs now responsible for seven-figure budgets, a spreadsheet containing these amounts can be daunting.


If your spreadsheet is too complex, you will likely;

  • Make mistakes

  • Want to retreat from managing this aspect of the network

  • Not have trust in the financial decisions made and/or the options being put forward

  • Conversely, you are more likely to blindly trust the financial decisions taken and suggested options with no real understanding.

Try to keep things as simple as possible and make use of online tools (such as Xero) to help you manage your money.

I hope this helps.😀



 

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About the Author


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.


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Find out more about THC Primary Care at: https://www.thcprimarycare.co.uk


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