A month after the government announced its 10 Year Health Plan for England, a poll of leading accountants finds they are uncertain about how their GP practice clients will benefit from the plan. Members of the Association of Independent Specialist Medical Accountants (AISMA) say the absence of detailed information is concerning.
‘This lack of information is very worrying. Without more detail, it’s difficult to see how the plan will be rolled out for general practice,’ says Lizzy Lloyd, AISMA Chair and partner at east of England accountancy firm Larking Gowen. ‘The aspirations behind the plan are positive, but they need to be matched with detailed information, clear leadership and informed decision-making in preparation for the implementation of the new single neighbourhood and multi-neighbourhood contracts. Without this, the government will fail to unlock the potential these new contracts hold for general practice.’
Lizzy Lloyd says that AISMA accountants are ready to contribute their expertise and share learning, particularly from their experiences of helping to set up primary care networks. ‘Our door is open’, she says, adding that AISMA has yet to be contacted by those leading the implementation programme.
She and members of the AISMA leadership team are concerned about the level of risk involved for general practice in relation VAT, employment and premises. Working capital and cashflow issues for the new organisations need to be worked through, they say, and there must be continued focus on practice-level funding.
Increased risks through VAT, employment and premises issues
‘It’s vital that GP practices, PCNs and GP federations getting involved with the new contracts don’t jump to decisions without mitigating the risks,’ says AISMA adviser Andy Pow. ‘There are some highly technical tax considerations that need thinking through carefully. For example, VAT flows and VAT exemption rules need to be understood when it comes to employing and sharing clinical and administrative staff within the neighbourhood.’ Specialist accountancy advice is essential, he adds.
Employment issues of concern include how staff will access the NHS Pension Scheme. ‘Staff moving into these new organisations will need pension scheme access from the start of the new contracts,’ says Mr Pow, adding that organisations holding the new contracts must be set up as NHS employing authorities. Pension rules may need to be amended, he added.
AISMA also highlights significant risks involved for GP partners becoming leaseholders for the proposed new Neighbourhood Health Centres.
Limited liability partnerships could help mitigate risks for partners
While the new contracts open up potential new flows of money for general practice, the increased risks to GP partners are substantial according to AISMA. However, accountants say these could be mitigated if practices were allowed to form limited liability partnerships.
‘GP partners could be about to take on a lot of new risks, in particular in relation to employment and premises,’ says joint AISMA Vice Chair Jim Duggan, medical director at south-west accountancy firm Albert Goodman. ‘Business structure rules for GP practices need to change – and change quickly – so that practices are allowed to hold contracts and are able to access the NHS pension scheme through limited liability partnerships (LLPs), he added.
LLPs provide a wrapper needed to protect the individual partners while allowing the business to work flexibly, he says.
Working capital needed for new organisations
AISMA is calling for clarification on the initial investment required for working capital for the new organisations. ‘When primary care networks were first set up, they had to delay spending money on employing staff and providing services until they had built up enough working capital,’ says Andy Pow. ‘However, there is no mention of working capital investment in the 10-year plan.’
‘For the new contracts to be successful quickly, serious consideration must be given to the funding of working capital, otherwise cashflow will be impossible to manage.’ He warns GPs to ensure they have a robust business plan dealing with working capital before they sign up to a neighbourhood contract. Commissioners will also need to consider this in how they support the newly formed organisations.
Questions over practice-level funding
According to AISMA the 10-year plan does not address the core issues of funding at practice level. ‘GP practices are the bedrock of the NHS, yet there is no mention of practice-level funding in the 10-year plan,’ says Lizzy Lloyd. ‘I am concerned that PCN money or local enhanced service funding, which is currently used to support into practices, will be diverted into the new neighbourhood contracts, leaving practices unsustainable. The money needs to stay where the core general practice service is delivered.’
She also highlights the risk to general practice of premises budgets being diverted to the new neighbourhood health centres. ‘The existing primary care estate is no longer adequate and requires funding to bring premises up to the standard required to deal with the new ways of working demanded of GP practices, increased staff numbers and more patients. Many practices need to develop their existing premises and we hope the support will still be there for these smaller projects.’
Questions for PCNs and role for GP federations
AISMA reports one of the biggest concerns for PCNs is the impact of the 10-year plan on the PCN model, and lack of real guidance on the future of PCNs. ‘PCNs were not necessarily set up geographically, and some have evolved from their initial inception into a very different model,’ says AISMA board member Pete Farrier, director of Hampshire firm Morris Crocker Chartered Accountants. ‘How they are going to be potentially shoe-horned into the neighbourhood model remains to be seen. There is currently a lot of emphasis on a 50,000 population for single neighbourhood provider contracts, but smaller local communities, such as those in rural areas, will need to be protected. Single practice PCNs of a certain size and scale, and practices working together in strong, cohesive groups could benefit most from these contracts.’
‘There may need to be a change, forced or otherwise, in the structure of PCNs to reflect neighbourhoods, but a lot of practices will want to wait and see,’ he added. ‘Our advice is not to jump too quickly but stay engaged and keep talking to your local area.’
GP federations are likely to be the only GP organisation of the size and scale big enough to hold a multi-neighbourhood provider contract. Abi Newbury, joint AISMA Vice Chair and managing director of south-east firm Honey Barrett Chartered Accounts, says: ‘It’s going to be increasingly important for practices to have a strong federation representing their interests. For practices in areas without a federation, it will be essential to find one. Have conversations with your nearest federation about expanding its reach to include your area.
‘Collaboration will be key when it comes to multi-neighbourhood provider contracts,’ she says. ‘It’s vital that local providers, including councils, federations, voluntary organisations and hospital trusts, work together closely, not only to deliver the contract but to gain the wider benefits and opportunities the 10-year plan has the potential to deliver.’