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.

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.

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.

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.