Creating a Single Neighbourhood Contract via the PCN DES
On 30 April 2026, NHS England published an updated Network Contract DES Contract Specification for 2026/27. It took effect the very next day. Interestingly, this was only a month after the original 26/27 DES had been published, so what had changed in such a short period of time? The answer is what could prove to be one of the most significant developments in primary care contracting in recent years: the DES Local Variation Arrangement, or “LVA”.
In this blog, we take a first look at what has changed, what we like about it, and what might give cause for concern.
What Is the Local Variation Arrangement?
The LVA is a new mechanism that allows a commissioner (an ICB) to submit a written request to NHS England for the establishment of a local variation to the PCN DES. In plain terms, it enables ICBs to propose changes to key parts of the PCN DES specification to suit local needs, subject to NHS England’s approval.
A Local Variation Arrangement may vary sections 7, 8 and 10.1 to 10.5 (inclusive) of the Network Contract DES Specification. To put that into context, those sections cover the Additional Roles Reimbursement Scheme (ARRS), the Service Requirements (including enhanced access, care home arrangements, collaboration obligations, and health improvement targets), and significant parts of the financial entitlements framework. The Investment and Impact Fund (IIF), however, cannot be touched.
The scope of what can be varied is striking. In principle, an ICB could propose to delete clause 7 entirely — effectively removing the ARRS — and replace it with something else altogether, such as an outcomes-based payment model or a locally defined set of KPIs. Similarly, the service requirements under section 8, including enhanced access provisions and NHS 111 obligations, could all be replaced. Even requirements introduced as recently as the 26/27 DES published the previous month could, in theory, be varied or removed.
There are no specified parameters limiting the degree to which these sections can be changed, beyond the requirement for NHS England approval. However, the LVA request must include the proposed variation wording, the rationale for the variations, and crucially, an explanation of how the proposed changes support delivery of the Network Contract DES for the PCN’s patients. So while the scope of permissible variation is wide, it is not a free-for-all — NHS England retains the final say.
What We Like About It
It builds on existing infrastructure. Perhaps the most immediately attractive feature of the LVA is that it does not require the creation of anything new. It builds on the PCN infrastructure that practices have spent years developing — whether that is through a lead practice model, a flat structure, a PCN company, or a federation. Whatever model a PCN has adopted, the LVA can sit on top of it. There is no need for new entities, new governance arrangements, or a procurement process. It is, as a consequence, a rapid way to start delivering locally defined services within a neighbourhood, assuming that neighbourhoods and PCNs are broadly aligned.
It preserves the independent contractor model. Because the PCN DES is a variation to each practice’s primary medical services contract, the LVA operates at practice level. Practices remain the prime contractors. This is a significant distinction from a potential single neighbourhood contract, which would almost certainly not be contracted at practice level and would likely involve a different entity — such as a PCN company or a federation — holding the contract. The LVA locks DES income into practices as practice-level revenue, which must be good news for those who value the independent contractor model.
It creates a “LES-DES hybrid”: national funding, local specification. In effect, the LVA creates something that has never quite existed before — a nationally funded enhanced service with locally defined content. The funding envelope remains set by NHS England, but what is delivered within that envelope can now be tailored locally. This is, in practical terms, a hybrid between the DES (national, centrally specified) and a LES (locally commissioned, locally designed) — and it is a genuinely novel construct in primary care contracting.
It offers radical devolution. The PCN DES has historically been a prescriptive, centrally driven contract. The LVA represents a significant relaxation of central control. The fact that so much of the specification is now, in principle, open to local variation is quite astonishing. It is, in essence, NHS England devolving power locally, enabling ICBs to tailor services to the specific demographic and health needs of their populations rather than persisting with a one-size-fits-all model.
It offers flexibility on geography. Interestingly, there appears to be nothing in the specification requiring a Local Variation Arrangement to apply to a geographically contiguous area. An ICB could, for example, apply the same variation to several PCNs/neighbourhoods scattered across its footprint that share similar demographic profiles — such as areas with high deprivation — without those PCNs needing to be geographically adjacent. An ICB could equally choose to have different variations for different groups of PCNs within its area, tailored to their distinct local needs. This kind of demographic-based flexibility is genuinely novel and could be a powerful tool for addressing health inequalities.
It is a credible alternative — or at least a precursor — to the single neighbourhood contract. The single neighbourhood contract remains a concept coming down the pipeline and will doubtless be implemented by many ICBs. When it does arrive, it will face significant implementation challenges: there is no entity structure for neighbourhoods, no governance framework, and a probable need for procurement. The LVA avoids all of those problems. For ICBs that are happy with their PCN footprints and want to start delivering locally defined neighbourhood-level services now, the LVA provides a credible route to do so without waiting.
What Might Be Problematic
ICB capability. ICBs are currently undergoing major cuts. The LVA requires ICBs to do a significant amount of work: drafting proposals, engaging with practices, navigating the approval process, and implementing variations. Whether ICBs have the staff and the capability to take advantage of this opportunity is a genuine question.
Lack of guidance. At the time of writing, there is no published guidance from NHS England as to what kind of changes it would or would not be likely to approve. ICBs are, to a degree, groping in the dark. Without a framework of expectations, there is a risk that ICBs either propose too little (for fear of rejection) or invest significant time and resource into proposals that are ultimately refused. This uncertainty is arguably the biggest practical barrier to uptake.
Central approval requirements. Every proposed variation requires NHS England’s approval. The more flexibility an ICB wants, the harder the approval process becomes. If a single ICB has 30 PCNs and wants multiple different variations, that is a significant volume of work flowing to the centre for sign-off. One has to hope that NHS England is adequately resourced to manage that process.
Getting practices on board. The LVA is, at its heart, still a DES — an enhanced service that operates on an opt-in basis. Before a Local Variation Arrangement can take effect, the commissioner must provide confirmation and evidence that each Core Network Practice has agreed to participate on the terms approved by NHS England. Unanimity within a PCN appears to be required. This means that a single practice within a PCN could, in principle, hold things up. If a practice refuses to sign up, the DES simply continues without modification for that PCN. Any proposed variation will therefore need to be demonstrably more attractive than the existing DES to get practices across the line.
Complexity if run alongside other models. Although no ICB would sensibly attempt to run LVAs alongside separate single neighbourhood contracts, (or indeed create a plethora of LVAs) there is nothing in the specification that precludes it. The potential for complexity and administrative burden is considerable.
What Does This Mean for Practice Finances?
One dimension that deserves particular attention is the financial impact on individual GP practices. PCN and enhanced services income typically represents around 30% of total revenue for a GP practice. A shift in how that funding is controlled, directed, or conditioned could, over time, affect both profitability and viability if not planned for. By locking this all in at practice level LVAs should be more attractive for individual practices than single neighbourhood contracts, but it does mean that the complex ‘shared cost/revenue model of PCNs will continue. Embedding control and governance of money at PCN/neighbourhood level will be more important than ever.
Are PCNs Organised for This Next Phase?
The LVA increases both opportunity and responsibility for PCNs. Networks are now expected to manage larger and more complex funding streams, employ or host multidisciplinary teams at scale, deliver locally tailored services, and act as credible partners with ICBs.
For some networks — particularly those that delayed structural decisions while waiting for clarity on neighbourhood contracts — incorporation or the use of an established federation model may now merit serious consideration. This is not about rushing into change, but about recognising that the PCN’s role is becoming increasingly central to service delivery and that governance arrangements need to be fit for purpose.
Practical Steps to Consider Now
While much will continue to evolve, there are some sensible steps practices and PCNs can take now.
First, understand your local neighbourhood model. In most parts of the country PCNs are evolving into neighbourhoods, but LVAs and single neighbourhood contracts are both aimed at neighbourhoods, not PCNs. Make sure you understand how your single and multi neighbourhood model is evolving.
Second, revisit PCN governance arrangements. Ensure decision-making, financial controls, and risk-sharing are clearly documented and understood. If you are still operating on the original Network Agreement without review, now is the time.
Third, engage early with your ICB. ICB reorganisations have created gaps — but that also means this is the moment when future direction is set by those who engage first. If your ICB is exploring LVAs, you want to be part of that conversation from the outset. This kind of engagement is probably best led at scale by your LMC.
Over time we expect to publish further, more detailed analysis of the specific provisions that can be varied and the opportunities that may arise from them. In the meantime, if you have any questions about the LVA or the updated PCN DES, please do not hesitate to contact us.
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The Neighbourhood Health Framework: Key Takeaways for Primary Care Providers
The NHS is undergoing one of its most significant structural transformations in recent years. The recently published Neighbourhood Health Framework builds on the 10 Year Plan and signals a fundamental shift in how healthcare services will be commissioned, contracted, and delivered. For GP practices, PCNs, and other primary care providers, understanding and planning for these changes is essential for survival.
At DR Solicitors, we have been working closely with primary care clients to help navigate the emerging neighbourhood landscape. This Framework brings together much of what we have observed, whilst raising important questions that providers must consider urgently.
A Paradigm Shift: The Major Changes
The end of PCNs as we know them
Perhaps most striking is the near absence of any reference to PCNs. The sole mention confirms that the government “will consult on how primary care networks might evolve into SNPs (Single Neighbourhood Providers).” This leaves a substantial question mark over services and funding currently contracted through the PCN DES.
In practical terms, PCNs will become “Neighbourhoods.” While many will operate on an identical footprint to existing PCNs, others will not. This transition from a network to neighbourhood model represents a fundamental change in the legal and contractual architecture of primary care.
A New Hierarchy of Population-Based Contracts
Until now, primary care contracts (GMS, PMS, and APMS) have been the only truly population-based contracts in the NHS. The framework introduces a new hierarchy of 3 new population based contracts: Single Neighbourhood Contracts (SNCs) for populations of 30,000-50,000; Multi Neighbourhood Contracts (MNCs) for around 250,000; and, at the apex, Integrated Health Organisation (IHO) contracts covering one to three million people. The government intends these to be “nested” within a coherent geographical hierarchy, creating organisational and legal complexity that providers must plan for.
The Implications: Risks and Opportunities
Funding Migration and Loss of Control
The most pressing concern is that PCN (and possibly also some Enhanced Service) funding will migrate into SNCs. Critically, whoever holds the SNP contract will control this funding. Currently, GP practices are the prime contractors under the PCN DES, but in a neighbourhood world they risk becoming subcontractors to the SNP. Our assessment is that GP practices & PCNs risk losing 25%+ of their combined income to the Single Neighbourhood Provider.
Practices who do not secure access to these contracts risk becoming financially unviable. Unlike the PCN DES (which is exempt from procurement rules as an Enhance Service), neighbourhood contracts may well be open to competitive tendering, and so it is critical that PCNs plan for how they will bid for and deliver these contracts – even though the details are not currently fully understood. With the notable exception of single practice PCNs, most PCNs lack legal personality and so will not be able to hold these contracts themselves. PCNs/Neighbourhoods should therefore urgently consider either setting up their own PCN/Neighbourhood company, or consider whether they are comfortable being a subcontractor to a third party, such as a federation, who controls the SNC on their behalf.
Opportunities Within the Hierarchy
There are significant opportunities within the new contract hierarchy for those willing to organise appropriately. GP Federations are generally around the population size of most MNPs, so they would be well placed if they ensure they are appropriately ‘nested’ geographically and have established effective collaborative working arrangements with other providers of primary and community care.
Even at IHO level – where contracts “will only ever be held by NHS organisations” (ie Trusts) – the Framework plans routes for “mature neighbourhood providers to lead an IHO through alliances or joint ventures with statutory NHS organisations.” The clear intent is that General Practice should take cornerstone roles at all levels of the population based contracts, but the obvious challenge is that the necessary governance and entities do not generally exist, and complex questions around staffing, data, VAT, insurance and more will all need consideration in due course. Providers who move quickly to establish governance models will be best positioned.
Local Flexibility
In a departure from NHS England’s usual centralised approach, ICBs and local communities will have significant latitude to develop their own contracting models. The immediate emphasis is on local experimentation – different geographies are developing different solutions, and those who engage proactively with their ICB will have greater influence. Again, this may be a real opportunity for local primary care leadership.
Neighbourhood Health Centres (NHCs)
NHCs represent a far more ambitious vision than the traditional GP surgery. They aim to “bring together GP services with community, local authority, civil society and VCSE sector services,” including co-location with family hubs, food banks, and employment support. As ever though, the problem is finance. Wave 1 (2026-2027) will focus on repurposing existing NHS Property Services and LIFT estates in deprived areas, but given the well-known problems with service charges in many of these buildings it Is hard to see how repurposing can work without first addressing these historic costs; future waves are supposed to include new builds funded through public-private partnerships, but we will have to wait and see how a building incorporating the voluntary sector could ever be financed in this way.
Practical Steps for Providers
Every strategic decision must now be considered through the neighbourhood lens. Providers must urgently consider how to contract for neighbourhood contracts and how their estate fits within the NHC model. Now is a good time to reconsider your PCN operating model, and practices with service charge disputes with NHS Property Services or CHP may find this an advantageous timing to negotiate.
The NHS is moving decisively towards neighbourhood-based commissioning. This creates opportunity for those who embrace change; for those who do not, the consequences may be severe. For further thoughts on the impact of these changes, please listen to our recent webinar on Preparing for Neighbourhood Contracts, and please do get in touch here to discuss your particular practice, PCN or Federation needs.
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When Partnerships Break Down: Navigating Primary Care Conflicts
Why Early Legal Advice is Your Best Investment
Partnership disputes in general practice rarely materialise overnight; they manifest over time, through various means including tensions around workload, commitment to the practice, money, differing views on the practice direction (stabilize, scale up by merger/acquisition, dispose, terminate NHS contract), patient safety concerns, poor professional practice behaviours, and so on. When left unaddressed, ‘annoying but tolerable irritations’ fester and escalate into a conflict that consumes time, causes stress and ultimately costs money because it threatens the viability of the practice itself. At DR Solicitors, we believe there is a more proactive approach which can be taken to mitigate these issues. Too often, practices reach out when relationships have already deteriorated and the only apparent option is formal litigation, when in fact resolving conflicts earlier can achieve more sustainable outcomes.
The Problem with Waiting before Taking Legal advice
There is a pervasive belief that instructing a solicitor should be a last resort. The concern, understandably, is cost. Legal fees can seem daunting so as a result, partners turn to sources of free advice including ChatGPT. While well-intentioned, these sources are unlikely to provide the specialist, healthcare advice needed to navigate a primary care partnership dispute.
When a dispute lingers on, relationships deteriorate, partner and staff morale plummets and good people leave. Before long, the practice has lost its resilience and it is unattractive to incoming partners. The good news? All of this damage can be avoided with the right, strategic legal advice at the start and sticking laser-focused to the goal.
Preparation Before the Meeting
When conflicts arise, the instinct is often to call an urgent practice meeting. This is rarely wise without preparation. Walking in without a clear agenda, defined objectives and an understanding of your legal position is a recipe for escalation.
Before any meeting, consider what outcome you actually want and take advice on your legal and commercial options at the outset. The right advice can hugely improve your negotiating leverage. Are you seeking to preserve the partnership, or is separation the best path? Do you want changes to working arrangements and profit shares? Next, understand your legal position. Review your Partnership Deed and the rights it creates. If you operate without a formal Deed, you are governed by the Partnership Act 1890, which may not reflect your intentions. Taking legal advice at this early stage is invaluable because a specialist solicitor can help you assess your position so you can approach negotiations with confidence and make informed, sensible decisions.
Every meeting should have a written agenda and clear minutes. Remember: everything you put in writing yourself is potentially disclosable; privileged communications with your solicitor remain confidential.
Choosing Your Dispute Resolution Route
If informal negotiation fails, you will need more structured processes. The three main options are mediation and, rarely, arbitration and court proceedings.
Mediation is a voluntary, confidential process where an impartial third party, known as a mediator, facilitates agreement and communication between parties, aiming to find a mutually agreeable solution for all. It is typically faster, less expensive and preserves relationships because it is collaborative rather than adversarial. Given there is no goodwill in a medical practice, if a dispute has reached this stage (most do not) the case is settled at mediation
Arbitration is more formal but the key positive (in comparison to the public courts or the Employment Tribunal) is that the arguments remain private. It is essentially a ‘private court’ where an arbitrator issues a binding decision. Most GP Partnership Deeds specify arbitration, and you can choose an arbitrator with healthcare expertise to fit the dispute. So you can appoint a healthcare surveyor to arbitrate a surgery valuation dispute or a healthcare accountant to arbitrate a financial dispute. But we work hard to settle a dispute before we get to this point because of the fact that there is no goodwill in an NHS practice so in most cases, the costs are prohibitive.
Court proceedings are heard in the High Court which is a public forum, and therefore the world can read about your dispute. It is slow because of the backlog in getting a hearing pencilled in, expensive and adversarial. It tends to destroy remaining relationships so in our view Court proceedings for a private GP partnership dispute should generally be a last resort.
Why Early Instructions to a Healthcare Lawyer can save Money
Instructing a specialist, primary care, dispute resolution solicitor early reduces your business risk and your costs. Early advice helps you avoid tactical errors: ill-advised emails and social media posts, verbal outbursts that are not thought through and most importantly, failing to follow the dispute resolution procedures set out in your Partnership Deed. You paid for a Partnership Deed so use it, and if you do not have a Partnership Deed in place then you clearly have a high risk appetite! Our team of highly skilled GP dispute resolution lawyers can quickly assess whether your GP or non-clinical partnership dispute is worth pursuing and identify the most appropriate route. Sometimes the best advice is to compromise early; sometimes it is to stand firm and hold out for a better deal.
Get in touch
Whether you are facing an emerging dispute, navigating a difficult partnership conversation, or simply want to review your Partnership Deed, our specialist team is here to help. The earlier you reach out, the more options you have and the lower your costs are likely to be. Contact our Primary Care team today here — the sooner we talk, the more we can do to help.
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Webinar: Preparing for Neighbourhood Contracts
In this webinar, Nils Christiansen from DR Solicitors and Guy Vine from MHA discuss issues surrounding the preparation for Neighbourhood Contracts. This fascinating webinar covers a variety of topics, including an overview of the neighbourhood and multi-neighbourhood models, challenges, opportunities and impacts, as well as what PCNs and Practices can do to prepare.
If you would like to get in touch about any topic covered in the webinar, please click here.
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Partnership SDLT Exemptions and GP Surgery Property: Understanding the Real Risks
There appears to be increased interest from HMRC and the Land Registry in partnership-related SDLT claims. While the underlying law has not changed, practices are now commonly receiving requisitions asking for further detail on why a property transaction qualifies for SDLT exemption.
Many GP partners are familiar with the concept of the partnership Stamp Duty Land Tax (SDLT) exemption and often assume that transfers involving GP surgery premises are automatically free from SDLT. In practice, this is a complex and frequently misunderstood area of tax law. This briefing explains how the exemption works, why it is not always available, and where GP practices are most at risk.
Because SDLT is a self-assessed tax, the responsibility rests with GP partners to identify when a chargeable event has occurred and ensure the correct return is filed. For practices undergoing structural change—such as mergers, retirements or incorporations—the financial and governance implications can be significant.
The critical starting point is establishing whether a surgery building is genuinely a partnership asset. Partnerships cannot be registered owners of land, so properties are held in the names of individual partners as nominees. Under general property law, there is a presumption that those named individuals own the property personally. That presumption must be clearly rebutted for the partnership SDLT exemption to apply.
Crucially, it is not enough that:
- the partners operate from the building;
- the building is used exclusively for NHS services; or
- property capital appears in the partnership accounts.
To qualify as a partnership asset, there must be clear, explicit and properly executed documentation—typically within the partnership deed—confirming that the property is held as a partnership asset. This is a high evidential threshold because it has to rebut the public record at the Land Registry where only individuals are named.
Where a building is genuinely a partnership asset, routine partner buy-ins and buy-outs are treated as changes in partnership interests rather than land transactions, and they therefore fall outside the scope of SDLT. From a Land Registry perspective this is ‘unusual’ and has been the trigger for an increasing number of requisitions checking the true status of the building.
In this context however, it is important to understand that several common events do give rise to SDLT charges, even though no change may appear on the Land Registry title
These include:
- Practice mergers, where assets move from two or more partnerships into one.
- Bringing a property into the partnership, which is itself a chargeable event and restricts further changes for three years.
- Partner retirements, where retained property interests may convert partnership property into a personal investment.
- Practice incorporations, where property transfers to a company or the partnership becomes a property-investment vehicle.
- Practice closure, which ends the trading partnership and can crystallise a chargeable event.
There are some practical steps that practices can take to mitigate their risks:
- Review partnership documentation to confirm whether surgery premises are clearly documented as partnership assets. Obtain legal advice if necessary as changing the status can have significant consequences
- Do not rely on assumptions based on usage, accounting treatment or historical practice.
- Flag SDLT risk early when mergers, retirements, incorporations or restructures are proposed.
- Seek specialist tax and legal advice before any transaction involving premises or changes to structure (eg. mergers, incorporation, retirements without full buy-outs).
Partnership SDLT is a highly specialist and frequently misunderstood area. With likely increased scrutiny, GP practices should adopt a precautionary approach. Clear documentation, early advice and robust governance are essential to avoid costly and unexpected SDLT liabilities at times of organisational change. If you would like assistance with any of the issues raised in this blog, contact DR Solicitors.
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Should I explore a merger? Things to consider
With financial pressures mounting, workforce challenges deepening, and the drive toward integrated neighbourhood models intensifying, many GP practices are asking the same question: should we explore a merger?
Mergers between practices — whether through full partnership consolidation, joint ventures, or federated working — can unlock economies of scale, resilience, and access to capital investment. However, they also carry significant legal, and operational implications that must be carefully evaluated before proceeding.
For GP practices, a merger is one of the most far-reaching strategic decisions partners can make. It affects partnership structures, property ownership, contracts, staffing, and patient lists. The partnership deed becomes the foundation for the merged entity, so understanding liabilities and governance arrangements is essential.
From an ICB perspective, supporting sustainable configurations of primary care is key to delivering integrated care and maintaining service continuity. Mergers can align with ICB estate strategies and workforce planning, but they also need to be lawful, compliant with GMS/PMS regulations, and properly authorised by NHS England where required.
Key considerations for 2026
The 2025/26 NHS planning framework places renewed emphasis on primary care sustainability and estates optimisation, both of which make mergers an increasingly practical option.
Recent guidance highlights:
- ICB discretion to approve merger proposals locally, replacing the more centralised approval model of previous years.
- Digital integration and estate rationalisation as key enablers for successful mergers, with funding potentially available through the Utilisation and Modernisation Fund, applying for which we discussed in another blog here!
- A push toward larger, multi-site partnerships or neighbourhood-scale practices to improve access, workforce flexibility, and business continuity.
These policy signals suggest that merger discussions are likely to become more common — but they should be underpinned by sound legal and governance preparation.
What does this mean?
For practice partners, this means assessing whether a merger aligns with long-term goals and values, not just short-term financial relief. You must be clear on what kind of merger you’re exploring — a full partnership amalgamation, a joint venture for specific services, or a shared administrative model — as the legal and tax consequences differ substantially.
For ICBs, it means developing transparent frameworks for assessing merger proposals, ensuring that patient safety, continuity, and value for money are preserved. A legally compliant and well-structured merger can help reduce duplication and improve care delivery — but rushed or poorly documented arrangements can expose both the new entity and commissioners to risk.
Below are some practical steps to take when one is considering a merger
- Start with due diligence – Review partnership deeds, property ownership, leases, NHS contracts, and outstanding liabilities.
- Engage early legal and financial advisers – Independent advice helps prevent disputes later and ensures proper structuring.
- Develop a shared vision – Align on culture, leadership, and service priorities before drafting the merger agreement.
- Consult stakeholders – Involve staff, patients, and ICB representatives early to maintain transparency and confidence.
- Plan governance carefully – Design robust decision-making and profit-sharing arrangements in the new partnership deed.
- Secure approvals – Obtain ICB and NHS England consent where required, ensuring compliance with GMS/PMS contractual terms.
A merger can be transformative when properly planned, offering stability, scale, and strategic opportunity. However, it remains a complex legal transaction — one that demands preparation, clear objectives, and professional advice to ensure that the promise of integration becomes a sustainable reality.
If you are considering a merger and would like expert legal advice to help you navigate what can often be a complex process, speak to DR Solicitors and find out how we can help you.
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Do PCN companies need to register with the CQC?
When advising PCNs on a possible PCN incorporation, a common misconception which we encounter is that the PCN company must register with the CQC. In practice, however, this is rarely the case.
A PCN, as created by the PCN DES, is a contractual ‘sharing’ relationship between its core network practices. These sharing arrangements create well-documented problems in relation to employment, VAT, shared liability and more.
How an incorporated PCN works around these issues
An ‘incorporated’ PCN gets round these problems by creating a structure which sits alongside the PCN in the form of a company owned and controlled by the core network practices. That company is generally used in two different ways:
- As a ‘classic’ PCN company which employs PCN staff and supplies their services to the core network practices. These staff are reimbursed either directly or indirectly from PCN DES monies.
- As a contract holder for non-DES services, which services are then subcontracted to, and delivered by, the core network practices. This second use is less common but is likely to increase with the NHS’ new 10-year plan and the introduction of single-neighbourhood contracts.
What does the CQC actually regulate?
The first critical thing to note is that the CQC only regulates entities which provide regulated services. Clearly a PCN company is an entity, but so is a partnership, or a person. The only ‘thing’ which is not an entity is the PCN itself, since that is a contract (which is why the CQC cannot regulate PCNs).
Since the PCN company is an entity, it COULD be regulated by the CQC, but whether it SHOULD be regulated will depend on whether it ‘provides regulated services.’ The fact that the company employs staff who are involved in delivering regulated services is irrelevant. The question is whether the entity itself is responsible for the delivery of the regulated services, regardless of who actually employs the staff doing the work.
The Key Regulatory Principle
The underlying rule is explained in some helpful CQC guidance from 2023:
https://www.cqc.org.uk/guidance-providers/gps/gp-mythbusters/gp-mythbuster-106-primary-care-first-contact-practitioners-fcps
The critical sentence in that guidance explains that “the meaning of ‘employed’ in the [Health and Social Care Act 2008 (Regulated Activities) 2014 Regulations] is wider than staff employed on an employment contract. It means anyone who works for the provider, under their ongoing direction and control.” That phrase “under their ongoing direction and control” is critical.
Essentially, where ARRS staff are employed by a PCN company, but are under the ongoing direction and control of an entity which is providing the regulated service and has a CQC registration (as is usually the case in the classic usage (1) detailed above), the PCN company doesn’t need its own CQC registration in respect of those employees. This is because, for the purposes of the regulations, such staff will be operating under the clinical supervision of the CQC-registered entity.
This principle may not be as novel to GPs as it might initially sound. Locums and locum agencies, just like PCN companies, provide sub-contracted clinical services to GP practices. The reason that locums and agencies don’t have their own CQC registrations is because the services they provide are always under the ongoing direction and control of a CQC-registered GP practice. The same principle applies when the services are being supplied to practices by a PCN company.
Application to contract-holding PCN companies
When it comes to the more recent usage of PCN companies for neighbourhood and other contracts (usage (2) detailed above), the same principle applies. Although the PCN company might hold the relevant single-neighbourhood contract, so long as the PCN company isn’t itself taking clinical responsibility for supplying the relevant service but is instead sub-contracting delivery of the regulated services to one or more of the member practices, then any staff delivering the clinical service will be under the ongoing direction and control of a CQC-registered entity, namely the responsible GP practice.
It’s important to understand that the principles detailed above aren’t an exhaustive exposition of all the rules and scenarios involved, though they are enough to demonstrate the principles of why PCN companies don’t generally need their own CQC registration. Beyond those principles, the fact of the CQC-registered entity having ongoing direction and control needs to be properly documented, in a way that doesn’t result in the CQC-registered entity taking on employment responsibility for the staff. There are also requirements for the CQC-registered entity to ensure that the staff whose services are supplied to it by the PCN company are suitably qualified and trained, with it being prudent to have documentation in place evidencing that this requirement has been met.
There are also practical issues with how to ensure that the clinical service is under the ongoing direction and control of a CQC-registered entity in practice. It’s easy enough to achieve where the clinical service is being delivered at a GP practice’s premises solely to the patients of that practice, but becomes more complex when patients from multiple practices are seen in the location of a single practice. It becomes even more difficult to achieve when patients from multiple practices are seen in a separate hub location which is not the premises of any of the practices.
It is also important to understand that this problem is not one which applies just to incorporated PCNs. An unincorporated PCN which operates in a way that patients from multiple practices are seen in a single location, whether it be a practice’s location or a remote hub, still needs to be able to demonstrate to the CQC who has ongoing direction and control of clinical staff at all times. “We’re all CQC-registered, so between us we’ve got it covered” is not sufficient, either in an incorporated PCN or an unincorporated one. While incorporation of a PCN often forces the practices to focus on clarifying who should have direction and control at all times, it doesn’t of itself create the requirement, which exists but is often overlooked in unincorporated PCNs too. With that in mind, the CQC requirements don’t create obligations or burdens in respect of PCN incorporations so much as force PCNs to address CQC compliance issues which they often overlooked.
How DR Solicitors can help
Clearly, PCNs (and now neighbourhoods) have made CQC compliance more complicated, but it is wrong to conclude that just because you have a PCN company, it needs to CQC register. In reality, what you need to do is understand and document your PCN-wide processes for clinical governance and then draw the right conclusions from that. If you would like expert support or guidance with your CQC registration requirements, contact DR Solicitors.
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DR Solicitors strengthens corporate healthcare offering with appointment of new partner
Specialist healthcare law firm DR Solicitors has announced the appointment of Paul Edels as a Partner, further enhancing its national corporate healthcare practice and expanding its expertise across the dental, pharmacy, and care home sectors.
With more than 15 years’ experience as a corporate healthcare lawyer, Paul joins from Bermans and acts for both buyers and sellers in a wide range of corporate and asset transactions. His work spans dental practice sales and acquisitions, pharmacy and care home transactions, and corporate restructures, as well as associate dentist contracts, partnership and shareholder disputes, and procurement matters.
Paul’s experience extends beyond healthcare into advising corporate purchasers and sellers across multiple industries, including construction, care homes, opticians and nurseries. He also represents healthcare providers in complex dispute matters, such as procurement challenges and claims against the NHS Business Services Authority.
Drawing on his background in investment and product development, Paul takes a commercially pragmatic approach to legal advice – combining technical precision with real-world understanding.
Paul will lead the firm’s Corporate Healthcare Team, supported by senior corporate paralegal Paul Rabbette, to further strengthen the firm’s capabilities in handling complex transactions and strategic advisory work across all healthcare disciplines.
Daphne Robertson, Founder and Partner at DR Solicitors, said: “Paul’s deep sector knowledge and extensive experience in corporate healthcare make him an exceptional addition to our firm. His appointment reinforces our commitment to providing the highest level of specialist legal advice to healthcare professionals and organisations nationwide. With his expertise across dentistry, pharmacy, and care homes, Paul will play a pivotal role in supporting our clients and expanding our national reach.”
Paul Edels, Partner at DR Solicitors, added: DR Solicitors is a firm recognised for its exceptional focus and reputation in healthcare law. The opportunity to work alongside such a highly respected team allows me to continue supporting clients across the healthcare sector with the commercial insight and legal rigour they need to thrive.”
Headquartered in Guildford, DR Solicitors advises healthcare professionals across the UK. The firm acts for more than 2,500 clinical practices, over 250 Primary Care Networks and numerous healthcare institutions and LMCs nationally.
Paul’s appointment comes after DR Solicitors recently reported its average annual growth of consultants at more than 40 per cent year-on-year, taking the total to 26. DR Solicitors was one of the first legal firms to develop a consultant-based operating model and has also been on of the first to integrate into a multi-disciplinary business advisory group.
DR Solicitors is part of the Dow Schofield Watts Group, following its acquisition in November 2024. The Group supports ambitious owner-managed businesses with deal advisory, tax, investment, business recovery, and legal services.
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Applying for a UMF Grant (Utilisation and Modernisation Fund)? A guide for GP Practices
The NHS Primary Care Utilisation and Modernisation Fund (UMF) provides much needed capital investment to improve the standard of GP practice premises. With more than £100 million earmarked, GP practices are successfully applying for UMF Grant money. But from a legal perspective, exercise care! Understanding the terms of these UMF Grant agreements is critical so you know where liability and risk sits, as well as avoiding funding clawbacks or disputes over property rights.
Why Take Legal advice?
UMF Grants come with strict conditions. No money is free! You need to understand what the terms of the Grant are including risk and liability, the position on clawback, and how the UMF Grant sits alongside any existing bank finance you may have taken out on the surgery premises. Misunderstanding or overlooking certain Grant obligations could lead to serious issues, such as breaches of Grant terms, conflicts with existing lease obligations or mortgages, and difficulties when partners change.
Key Details
The 2025/26 funding round has a focus on projects regarding refurbishing and reconfiguring existing Surgery premises. Technology-only solutions or entirely new builds will not qualify.
There are 3 UMF Grant scenarios – which of these apply to you?
1. UMF Funding exceeds £144,000 and relates to freehold property
Documentation: Freehold UMF Grant Agreement with a Legal Charge, Certificate of Title and a Deed of Priority will be required if the property is already charged to a bank. Note: This can raise practical challenges for GP practices with existing bank lending arrangements if NHS England takes a legal charge over the premises.
2. UMF Funding exceeds £144,000 and relates to leasehold property
Documentation: Leasehold Grant Agreement and Certificate of Title. GP Practices should check whether lease terms permit structural alterations or upgrades and obtain landlord consent where required. Note: that a Surgery lease must be in place to secure the UMF Grant money.
3. UMF Funding is less than £144,000 and relates to freehold or leasehold property
Documentation: Short Form Grant Agreement
What This Means for GP Practices
UMF Grant agreements are legally binding contracts; not simply administrative formalities. They govern how money can be spent, how changes to projects must be approved, and what protections are in place in the event of changing circumstances.
Practical Steps GP Practices Can Take
- Check Property Ownership – review HM Land Registry entries to confirm all current partners are correctly listed, and update where necessary. Ask your solicitor to expedite any pending HM Land Registry application
- Secure Third-Party Consents – obtain approval from landlords and mortgage lenders before starting works.
- Review Your Partnership Agreement and/or Declaration of Trust Deed – ensure they reflect how capital improvements are to be treated between current and future partners. For example, if improvements enhance the value of a surgery building, your Partnership Agreement or Declaration of Trust Deed should make it clear on how this ‘benefit’ is treated if property –owning partners retire and are bought out, or new partners join the partnership and buy-in. The grant money should be treated in the same way as you have historically documented how NHS improvement grants were treated
- Prepare a Compliant Business Case – align your Project Initiation Document (PID) with ICB priorities and national guidance to avoid rejection.
- Grant Agreement Changes – it might say on the front page that the Grant Agreement is not open to negotiation, but it is, so take professional advice early!
The Utilisation and Modernisation Fund presents a significant opportunity for GP practices. By taking legal advice at the outset, practices can ensure they secure the benefits of the Grant money while avoiding costly pitfalls.
How DR Solicitors can help
If you’re a GP practice looking to benefit from the UMF, contact DR Solicitors today to navigate the Grant terms with expert advice.
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Why I chose to replace big law with consultancy work
Elizabeth Duan, director of legal services at DR Solicitors, shares how stepping away from a career in large law firms and becoming a consultant has enabled her to shape her career with both ambition and flexibility.
After qualifying as a solicitor in 2014 I practiced in commercial real estate for a decade. I trained and worked at a few large corporate firms, advising on everything from care home developments to restaurant chain administrations and film studio deals. The work was complex and rewarding and taught me what it means to be a solicitor.
Despite the experience that came with working in a large corporate, it wasn’t without challenges. At any moment, I was expected to be an expert across multiple sectors which, despite giving me a breadth of knowledge, left me feeling that I was lacking the opportunity to carve out my own specialisms.
The ceiling of big law
When I started my career, I made a goal to reach senior associate. Making partner wasn’t something that particularly appealed to me – it’s no secret that in these firms your work can very quickly take over your life, with early starts, late finishes into the early hours and constant targets all leaving very little time outside of work for anything else.
I made senior associate in between having two children. After returning from maternity leave with my second child and at the end of 2023, I left private practice as I knew that I needed something different, and after doing some research, I found out more about the consultancy model and, subsequently, DR Solicitors. The opportunities this model presented felt like the perfect fit for me and the lifestyle I wanted to shape.
Benefits of consultancy work
I joined DR Solicitors in January 2024 and haven’t looked back since. For the first time in my legal career, I had true flexibility to structure my work. The cases I work on at DR Solicitors are still challenging and nuanced, and as legally complex as the corporate deals that I worked on at the big firms, but they also come with the opportunity to focus on the areas that interest me and hone my specialisms.
The consultancy model gives me stimulating work that I am passionate about, without the rigid structures and sacrifices that come with big law. With two children, this flexibility is invaluable to me, and I no longer feel that I must choose between career progression and quality time with my family.
Progression that you can shape
After starting at DR Solicitors as a consultant solicitor, I am now the director of legal services at the firm and get to oversee the day-to-day operations of the firm with the responsibilities of managing our team of consultant solicitors, client relations, risk and compliance, implementing effective processes and driving new business generation.
Leaving the traditional route sharpened my ambition and made me more determined to create a career that challenged me professionally, while giving me the flexibility to carve out time for other aspects of my life that I value – my family and advocacy work for women’s rights.
I now get to harness the entrepreneurial drive that I’ve always had, channelling it into the running of the business, from management of a team to strategic decisions. In a big firm, these opportunities are traditionally only reserved for partners.
And unlike a large city firm, DR Solicitors provides consultants with a steady workflow and trusts us to focus on delivering expert advice to clients, without the pressures of billable hour targets or bringing in new clients.
Why the consultancy model works
Being a consultant allows experienced lawyers to work independently, shape their working days and have control over their careers. At DR Solicitors, we recruit experienced lawyers and provide a platform for those seeking more autonomy, while still being technically challenged. Most of our consultants don’t join us with experience as a contractor, but the model and framework ensure that they get the support they need to run their own business as a consultant. All of this means that it’s rare our consultants go back to big law after joining us.
Deciding to step away from big law and into consultancy isn’t a step back, but a route to a sustainable, successful and rewarding legal career.
How DR Solicitors can help
For more information or a free, no obligation call with one of the DR Solicitors team, please contact us.