PCNs 'frightened' to recruit as ARRS delays create six-figure cash shortfall

PCNs are facing major cashflow problems because late payments under the multi-billion pound additional roles reimbursement scheme (ARRS) have left them out of pocket by six-figure sums.

Money
(Photo: Rosemary Calvert/Getty Images)

Payments to PCNs under the ARRS should be made a month in arrears based on the number of staff they have hired through the scheme.

But accountants working with PCNs say payments often come through two to three months in arrears, leaving the networks significantly out of pocket.

The average ARRS budget for each of England's 1,250 networks will exceed £1m per year by 2023/24 - and accountants warn that payment delays have left some PCNs increasingly ‘frightened’ to recruit as the scale of the budget involved grows.

ARRS payments

Specialist medical accountant Katie Collin, of Ramsay Brown and Partners, said delayed ARRS payments had become 'quite a significant problem'.

She said: ‘The ARRS tends to run about two to three months in arrears, which means an average PCN - if they maximise their use of ARRS - would have a shortfall of around £85,000 a month in arrears, or £250,000 a quarter in 2023/24.

'Where it works well, funding tends to come in around two months in arrears, but it's different in different areas, and PCNs are being asked for different information.'

Some PCNs had been required to seek approval from their local PCN before submitting a claim for reimbursement under the scheme, and some had to go through a process that involved supplying contracts and payslips to prove the number of staff they had hired, Mrs Collin told GPonline.

Cashflow

Any queries by the local NHS managers over claims could further delay payments under the ARRS, forcing PCNs to cope for longer without large sums having been reimbursed, she said.

GPonline reported earlier this year that large numbers of PCNs had 'incorporated' - forming limited companies to take financial risk away from member practices.

Ms Collin said in cases where an individual 'lead practice' was employing all the staff through the ARRS for their PCN, the cashflow pressure on that practice could be 'huge' if payments were significantly delayed.

'Federations, or limited companies can manage that cashflow risk more easily than individual practices,' she said.

Clawback

Some CCGs had been supportive, with some offering cash upfront to help networks cover the shortfall while ARRS payments came through and then clawing money back at the end of the financial year, Ms Collin added.

But in other cases, networks were struggling to cope. Many were diverting funding from other elements of PCN budgets - such as for management costs - to try to plug the gap.

She said the problem was compounded by longstanding problems with the way payments came through to practices - with a lack of clarity often on what payments related to, and funding for schemes such as the ARRS in some cases bound up with other PCN or practice funding.

She said that delayed payments had left networks wary of hiring more staff through the ARRS because expanding their wage bill could increase the cashflow problem. 'It's a vicious cycle,' she warned.

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