PCN service offer: financial management and assurance

The Confederation is offering PCNs a financial management service which eases the administrative burden on PCN teams. The Confederation offer centres on PCNs using the Confederation bank account (Lloyds), ledger system (Iris Kashflow) and finance team currently available.

Centralising financial services in this way creates economies of scale by having a small dedicated team to run the service and paying once across all PCNs for year-end accounting services.

As the Confederation is a not for profit organisation, all charges associated with holding funds will be based on the actual cost of delivering the service. We are also able to set up a cost sharing agreement between practices or PCNs and the Confederation that will mitigate the potential VAT risk associated with providing back office functions such as managing finances.

How it will work

PCN income would be paid into the Confederation bank account.

Each PCN would have its own account in the Confederation ledger where all income and payments would be processed, recorded and monitored.

The finance team would send out monthly budget reports detailing transacted spend to date and forecasts for the year based on the information to date. They would also provide financial advice, answering queries and providing additional information when necessary and ensuring invoices are processed and paid as quickly as possible.

The PCNs would need to provide the Confederation with details of their financial governance arrangements, so it is clear who can approve payments, to what limit and who the finance team would need to liaise with on a monthly basis. The Confederation would never process any payment without prior agreement with the appropriate PCN.

A Memorandum of Understanding (MOU) with the Confederation and PCN would underpin these agreements. A standard MOU template will be issued to PCNs wishing to proceed with the Confederation offer that will clearly outline the rules of engagement and who can authorise what for each PCN.

Income would be received directly by the Confederation on the PCN’s behalf unless the PCN wished to have a nominated practice to initially receive the income and then pass it on to the Confederation – either option can be accommodated.

VAT implications

A major risk for all PCNs is the potential issue of providing services which are deemed to attract VAT. The Confederation has a cost sharing agreement which resolves this issue as we can provide services to members of the agreement without attracting VAT. This forms part of the MOU between the PCN and the Confederation


The Confederation will provide clear, transparent, accurate and timely information to the PCNs but would not share individual PCN information further, unless for some reason the PCN instructed us to do so. A summary level position of PCN income and expenditure across all PCNs taking up the offer would be provided to the Confederation board as it would form part of the Confederation’s annual accounts.

How much it will cost

It is difficult at this time to estimate the costs associated with this new service. However after the first year of operation we will be clear on how many PCNs take up the offer, the volume of activity the accounts will generate and the amount of support PCNs will require.

We are proposing a charge of 2% for the first year of all income that the Confederation holds and manages on the PCN’s behalf. This charge would directly correlate to how the income is received. So if income is received monthly then the 2% charge would be on a monthly basis.  The table below gives an indication of the potential costs per PCN. The range is between £2-7k with the average being £4.5k per PCN.

PCN Income £s 2% charge £s
1 300,000 6,000
2 250,000 5,000
3 200,000 4,000
4 150,000 3,000
5 100,000 2,000


As we are a not for profit organisation, should the 2% charge be too much, we will redistribute any efficiency savings back to the PCNs proportionally, based on the initial amounts received and charged.

The Confederation will incur annual accounting charges from an external accounting firm; however PCNs will not be expected to contribute additionally to this cost as the Confederation would have paid for these anyway.


The Confederation offers a comprehensive, robust finance system to receive, record, monitor and forecast individual PCN financial positions, providing accurate information on a monthly basis. The Confederation’s finance team is small but very cost effective, providing value for money and assurance regarding financial governance and mitigating potential VAT issues.,

More information or to take up this offer

  •  If you would like more information about the financial management and assurance offer, please contact Jenny Davies, Finance Director
  • To take up this offer, please complete the online form