8 key finance questions every Primary Care Network Manager and Clinical Director should know in 2023
Updated: Jul 11
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 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 spreadsheets/statements?
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.
Before we get started, below are the core funding streams.
You will also have;
Impact and investment funding payable on achievement of 5 indicators
The Additional Roles Reimbursement Scheme
The Capacity and Access Support Payment paid monthly
The Local Capacity and Support Payment paid based on the improvement plan
This list is not inclusive of every financial source your PCN may have, so please talk to your PCN finance lead or ICB if you are unsure of any payments.
For a PCN with a list of 48,000/150 beds annual funds could be in excess of £1.6m, as illustrated below.
Funding per bed / patient
Leadership and Management
Capacity and Access 70%
Capacity and Access 30%
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 will find the contractual requirements of the DES 23/24 here.
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 clawback from your local Primary Care team due to incorrect claims. It does happen.
3. Where there is underspend from the previous financial year and how 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 certain recurring costs once the underspend has been utilised.
4. Where there was 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 forwards. 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 can plan accordingly.
6. The cash balance in the network, either monthly or quarterly
In most organisations, cash is king. Networks will need to agree on and ensure there is a monthly float in place to pay for expenses.
7. The expenditure overview
This will typically include:
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 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.
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;
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, or conversely, you are more likely to blindly trust the financial decisions taken and suggested options.
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.
The Online Programme
The Online Accelerator Programme is an introductory programme, delivered online for you to work through at your own pace and around your existing commitments. You can start straight away.
Click here for further information and to register today.
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.