Neighbourhood Health Provider Contracts: What SNP and MNP Proposals Mean for GP Finances

NHS England published a consultation on proposed Single Neighbourhood Provider and Multi-Neighbourhood Provider contracts on 16 July 2026.

The consultation closes on 10 September 2026 and seeks views from GP practices, Primary Care Networks, GP federations, Integrated Care Boards, NHS providers and other stakeholders.

These are proposals, not final contracts. NHS England intends to use the responses to develop firmer proposals that will be subject to further consultation later in 2026.

Nevertheless, the proposed neighbourhood health provider contracts raise important financial questions for GP partners and practice managers. These include how PCN funding could be transferred, how ARRS resources might be allocated, who would employ shared staff, when practices would receive payment and how contractual risk would move through an MNP or SNP structure.

Our specialist GP practice accountants help practices separate NHS income streams, monitor contract performance and assess the financial implications of new service arrangements.

This guide explains the current proposals and the areas GP practices should review before responding to the consultation.

What Are Neighbourhood Health Provider Contracts?

Neighbourhood health is intended to bring services closer to patients and create more integrated care around local population needs.

A neighbourhood would normally cover approximately 50,000 people, although the size could vary according to local circumstances. In many areas, this may be similar to the existing PCN footprint.

The consultation proposes two contract models:

1. A Single Neighbourhood Provider contract for enhanced primary medical services within one neighbourhood.
2. A Multi-Neighbourhood Provider contract for coordinating or delivering services across several neighbourhoods.

The contracts would be commissioned locally. ICBs would determine much of their scope, funding, duration and service requirements.

NHS England has also confirmed that there is no new national funding specifically attached to these contracts. Additional funding would need to be agreed locally or brought together from existing service arrangements.

What Is a Single Neighbourhood Provider?

A Single Neighbourhood Provider would organise and deliver enhanced primary medical services for one defined neighbourhood.

The SNP could work directly with GP practices and subcontract appropriate activities to practices or other local providers. It would also work with community services, NHS trusts, pharmacies, local authorities and voluntary organisations.

The model is intended to evolve from the existing PCN structure. However, it would be a separate contractual arrangement rather than simply a new name for the PCN DES.

An SNP contract holder must be a legal entity. This could include:

• A lead GP practice acting for a consortium of practices
• A GP federation
• A primary care provider organisation
• Another eligible legal entity with access to the registered patient list

Practices would not necessarily need to create a new company. However, a PCN that is only a contractual collaboration and not a legal entity would need to determine which legal entity would hold the SNP contract.

That decision affects governance, banking, employment, VAT, financial reporting and liability.

What Is a Multi-Neighbourhood Provider?

A Multi-Neighbourhood Provider would operate across several neighbourhoods. NHS England suggests a working footprint of around 250,000 people or more, but the consultation does not propose a mandatory national population size.

An MNP contract would use the NHS Standard Contract with an additional neighbourhood schedule.

Potential MNP contract holders include:

• GP federations and primary care organisations
• Limited partnerships
• Community interest companies
• NHS trusts
• A lead provider acting for a consortium

The MNP would need to be a single legal entity, even where several organisations collaborate to deliver the services.

Two broad MNP models are proposed.

Coordination model

Under this model, the ICB would continue holding existing contracts with individual providers. The MNP would coordinate services and could manage additional outcome-based incentive payments.

This model would introduce less immediate change to existing income flows because the underlying provider contracts would remain in place.

Lead provider model

Under this model, the ICB would commission the MNP to deliver the complete neighbourhood service or pathway.

The MNP would then subcontract relevant services to SNPs and other providers. This creates a longer contracting and payment chain, with the MNP carrying greater responsibility for service outcomes.

The financial risks are therefore different under each model. Practices should not assess an MNP proposal without first identifying which model their ICB intends to use.

Does This Replace GMS, PMS or APMS Contracts?

No. Core GMS, PMS and APMS contracts are not the subject of the consultation.

They would continue to commission core general practice services, including the practice’s registered patient responsibilities and core primary medical services.

The proposed SNP and MNP contracts would sit alongside the core GP contract and focus on enhanced neighbourhood-level services.

However, practices should not assume that every existing enhanced or locally commissioned service will remain outside the new arrangements. The consultation allows locally commissioned enhanced primary medical services and associated funding to be included within an SNP contract.

When modelling the financial effect, practices should separate:

• Core GMS, PMS or APMS income
• QOF income
• The GP Reimbursement Scheme
• PCN DES income
• ARRS reimbursements
• Local enhanced services
• Other ICB-funded services
• Private and non-NHS income

The core contract provides the starting point, but the income surrounding it may change according to local decisions.

What Could Happen to the PCN DES?

The current PCN DES is not being removed immediately.

The consultation presents several possible routes:

• Continue using the existing national PCN DES
• Use a locally varied PCN DES
• Commission an SNP directly
• Commission an MNP that subcontracts defined services to SNPs

These options would not operate simultaneously for the same services in the same geography.

Under a direct SNP model, participating practices would stop delivering the equivalent PCN DES services and voluntarily move to the SNP arrangement.

Practices would therefore need to compare the new contract with their existing PCN position before agreeing to switch.

Is ARRS Funding Protected?

The proposals require minimum investment in an SNP equivalent to the PCN DES, including ARRS resources.

This provides important neighbourhood-level protection. It means that an ICB should not simply remove the existing PCN funding when replacing the PCN DES with an SNP contract.

However, this does not yet establish how the money must be divided between individual practices.

A practice currently hosting several ARRS employees could receive a different allocation if the SNP introduces a new neighbourhood-wide workforce model.

Before supporting a transition, each practice should establish:

• Which organisation will employ the ARRS staff
• Whether existing employment arrangements will change
• How reimbursement will be allocated
• Who carries any unreimbursed employment costs
• How vacancies and underspends will be handled
• Who is responsible for redundancy or exit costs
• Whether NHS Pension Scheme access is available
• What happens when a practice joins or leaves the SNP

The neighbourhood may receive a protected overall amount while individual practices experience different financial outcomes.

Could an SNP Contract Be Multi-Year?

Yes, but it is not guaranteed.

The consultation states that ICBs could commission SNP contracts for multiple years, unlike the PCN DES, which is renewed annually. The actual duration would be decided by the ICB.

A longer contract could improve:

• Workforce planning
• Staff recruitment and retention
• Investment in premises and technology
• Service redesign
• Cash-flow forecasting
• Long-term collaboration between practices

A multi-year contract is only valuable if its payment terms, inflation arrangements, performance measures and termination provisions are also workable.

Practices should examine whether funding will increase when staffing and other delivery costs rise. A fixed multi-year income figure without appropriate review provisions may transfer inflation risk to the provider.

Financial Risks for GP Practices

Changes in the distribution of income

The minimum funding requirement protects the SNP’s overall funding floor. It does not necessarily preserve each practice’s current share.

Practices should model their existing PCN income against the proposed allocation rather than relying only on neighbourhood totals.

Longer payment chains

Under an MNP-led structure, money may flow from the ICB to the MNP, then to the SNP and finally to individual practices.

This could create:

• Delayed payments
• Additional invoicing requirements
• Disputes over performance
• Withheld or reduced payments
• More complex reconciliations
• Greater working-capital requirements

The proposed mandatory neighbourhood schedule may provide consistency, but practices should review the final payment provisions carefully.

Performance and clawback exposure

Some contracts may contain outcome-based or variable payments.

Practices need to understand:

• Which measures determine payment
• Whether performance is assessed at practice, SNP or MNP level
• Whether one provider’s underperformance affects other providers
• When income becomes payable
• How clawbacks are calculated
• Whether there is a dispute or appeal process
• How performance data will be validated

A practice should not accept financial responsibility for outcomes that it cannot control or measure.

Employment liabilities

The contract holder may employ shared staff directly or subcontract staffing responsibilities to practices.

Before staff move between organisations, specialist employment and legal advice may be required. Practices should assess payroll, pension, absence, redundancy and potential transfer obligations.

Our guide to the GP contract changes for 2026/27 provides additional context on the current reimbursement and ARRS arrangements.

VAT risk

The VAT treatment will depend on the nature of the services supplied and the contractual relationships between the parties.

Clinical healthcare services may qualify for exemption, while some management, administrative or support services may have a different VAT treatment.

The contract should therefore be reviewed before invoices are issued. The fact that money originates from an NHS body does not, by itself, determine its VAT treatment.

Governance and liability

The organisation holding the SNP or MNP contract will carry contractual responsibilities that may not currently sit with the informal PCN structure.

Partners should understand:

• Who can sign contracts
• Who controls the bank account
• How decisions are approved
• How surpluses and deficits are allocated
• Whether liability is limited
• How conflicts of interest are managed
• What information practices must provide
• How practices can join or leave
• What happens when the contract ends

These points should be agreed before a provider accepts the contract, not after funding begins.

Accounting for Neighbourhood Contract Income

The final accounting treatment will depend on the signed contract and the practice’s reporting framework.

A suitable accounting system should distinguish between:

• Core NHS income
• SNP or MNP service income
• Pass-through funding
• Staff reimbursements
• Outcome-based incentive income
• Locally commissioned service income
• Amounts withheld
• Expected clawbacks
• Payments made to other providers

Income should normally be attributed to the period in which the related services are delivered and the practice has established an entitlement to payment.

Where performance conditions remain unresolved, management should assess whether income can be measured reliably and whether a provision, accrual, deferral or other adjustment is required.

The correct treatment should be determined from the actual contract rather than applying a general assumption to every receipt.

Accurate healthcare bookkeeping will be particularly important where income and expenditure pass through several organisations.

Financial Review Before Joining an SNP

Before agreeing to participate, prepare a comparison covering:

The comparison should include the cost of delivering the contract, not only the proposed income.

Questions to Ask Your PCN or ICB

Before supporting a new neighbourhood provider structure, ask:

1. Which commissioning option is being considered?
2. Which legal entity would hold the contract?
3. What services and funding would move into it?
4. What would remain under existing contracts?
5. How would PCN DES and ARRS funding be allocated?
6. Who would employ neighbourhood staff?
7. What is the proposed contract duration?
8. How would inflation and pay increases be handled?
9. What performance measures would affect payment?
10. What subcontract would each practice sign?
11. When would invoices and payments be processed?
12. How would disputes and clawbacks be managed?
13. What would happen if a practice opted out?
14. How would surpluses or deficits be shared?
15. What financial information would practices need to provide?

A GP practice internal audit can also identify whether the practice’s existing financial controls are ready for more complex contractual income.

How to Respond to the Consultation

The consultation closes on 10 September 2026.

Practices can respond individually or contribute through their PCN, LMC, federation or representative body.

The current consultation focuses on the design and practical implications of the proposals. A further consultation on more detailed contract terms is expected later in 2026.

Useful financial points to raise include:

• Protection for individual practice funding
• Clear ARRS allocation rules
• Standard payment and subcontracting terms
• Protection against unreasonable withholding
• Transparent performance calculations
• Fair entry and exit provisions
• Treatment of employment liabilities
• Inflation and pay-cost protection
• Proportionate reporting requirements
• Clear dispute and appeal procedures

The consultation documents and response form are available through the official NHS England consultation page.