PCN Agreements – Key Considerations When Preparing For The NHS 10-Year Plan
Primary Care Networks (PCNs) are the foundation of the NHS 10 Year Plan’s vision to deliver integrated, population‑based care closer to home. As policy moves towards neighbourhood‑level contracting, PCN agreements will become increasingly important in supporting this collaboration across health, social care and the voluntary sector. As a result, PCNs will face material changes in governance, funding, workforce models and accountability. Early preparation and strategic planning will be essential to secure future revenue streams, maintain continuity of care and improve outcomes for the future of PCNs.
This article outlines the key areas PCNs should consider, particularly in relation to their PCN agreement – the foundation of any network. It will also consider the advantages and disadvantages of adopting a corporate model. Reviewing and updating a PCN agreement now will ensure networks are prepared for neighbourhood-level delivery and remain fit for purpose as NHS policy evolves.
What is a PCN agreement?
A PCN agreement is a governance document that governs how a Primary Care Network operates and, in a similar way to a shareholders’ agreement, sets out the rights and responsibilities of the member practices, including governance arrangements, financial management and decision‑making processes.
Given that PCNs will take on broader responsibilities as part of the NHS 10-Year plan and move towards neighbourhood contracts, PCN agreements will play a critical role in ensuring this move happens smoothly. This means that it is important to review PCN agreements now, both to ensure that they remain compliant with contractual agreements and are managed in light of future changes in NHS policy.
What to consider when reviewing and updating PCN agreements to ensure readiness for neighbourhood‑level delivery
To prepare for changes as per the NHS 10-year plan, it is important that you review and update your PCN agreement, as this will underpin how your network operates and adapts to the upcoming changes, especially in the following areas:
Governance and decision‑making
PCNs should review their PCN agreement to ensure governance arrangements remain fit for purpose as responsibilities grow. The agreement should set out clear decision-making thresholds and quorum requirements. It is also important to include appropriate conflict of interest provisions, especially where partners work across multiple organisations.
Scope of services and contractual alignment
Neighbourhood contracts may require broader or differently configured services than the current Directed Enhanced Service (DES) arrangement. In preparation for this, the PCN agreement should include:
- flexible service schedules that can be updated for new specifications;
- clear allocation of clinical and financial responsibility; and
- suitable arrangements for subcontracting and collaboration agreements with community, mental health, voluntary sector and local authority partners.
Financial flows and risk‑sharing
It is recommended that you review provisions on funding flows within your PCN agreement, apportionment procedures and risk-sharing to ensure they cover the following areas:
- clear arrangements for receiving and distributing new income streams;
- allocating cost pressures and liabilities; and
- managing exit costs.
Critically, building in mechanisms for audit access from the outset will ensure transparency and prevent future disputes amongst members. We have seen such issues come to light more recently because of the lack of transparent mechanisms in place amongst networks, particularly when one member receives/controls the income stream.
Workforce
Multidisciplinary healthcare staff (ARRS roles) will remain pivotal, and neighbourhood delivery will increasingly require staff to work across practices and partner organisations. Your PCN agreement should therefore deal clearly with:
- host employer arrangements;
- supervision and line management;
- clinical governance;
- indemnity; and
- information governance.
These arrangements should be set out (and kept under review) in a dedicated Workforce Schedule, so roles, responsibilities and risk allocation are consistently documented as the workforce evolves.
Data sharing and digital infrastructure
It is important for the PCN agreement to include clear and updated data sharing provisions that reflect the increased multi-agency information sharing expected under the NHS plan. Information governance should enable safe, effective care at neighbourhood level while remaining fully compliant with statutory requirements. It is also advisable to put in place (and keep under regular review) a standalone data sharing agreement to support and document these arrangements.
Exit, variation and onboarding
As PCNs continue to evolve, it is important that the PCN agreement sets out clear, workable processes for members joining or leaving the network. This should include continuity obligations and an orderly handover of shared assets, staff arrangements and key contracts. This will help to protect continuity of care and minimise disruption for patients and member organisations.
Should a corporate vehicle be used?
As responsibilities evolve, many PCNs consider incorporating a corporate vehicle to hold contracts, employ staff, manage assets and deliver services. Incorporation is not mandatory but can offer practical and legal advantages where properly structured and governed.
For some networks, incorporating a company can also support the effective implementation and management of PCN agreements by providing a single legal entity through which services and contractual obligations can be managed.
If you are considering incorporation, below lists some advantages and disadvantages of incorporating a company for networks to consider:
The advantages:
Incorporation can provide:
- limited liability for members;
- clearer governance and accountability;
- a single contracting counterparty for commissioners and partners;
- simplified employment and HR management;
- the ability to hold assets and leases centrally;
- standardised policies, risk and quality management; and
- facilitate multi‑disciplinary collaboration and enable a platform for growth or diversification aligned to neighbourhood contracts.
The disadvantages:
- a company adds regulatory, compliance and administrative burden, including statutory filings, accounts and governance processes;
- there are costs to establish and maintain, including professional advice, insurance and audit;
- taxation and VAT complexity can arise; and
- if the company is required to be CQC registered, additional regulatory obligations and inspection oversight apply.
To prepare for neighbourhood contracts envisaged under the NHS 10-year plan, PCNs should begin strengthening their foundations now by putting in place appropriate governance arrangements and developing the operational integration and flexibility needed to adapt to change. A proactive review of PCN agreements can help ensure that you are best placed to navigate ongoing and future change.
The expert team of corporate and commercial solicitors at GA Solicitors in Plymouth is currently supporting PCNs across the South West to review and update their PCN agreements, and to put in place appropriate corporate structures in preparation for forthcoming changes. If you would like to discuss how best to prepare or would like our assistance, please contact a member of our corporate and commercial team.
For a no-obligation discussion, call the team today on 01752 203500 or email enquiries@gasolicitors.com.
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