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The scheme, which has been in place since April 2001, was split in two halves: the investment monies, £50m are on a recurrent basis and are included in baseline allocations for PCTs, on a fair share basis; the reward monies, also £50m, have been made available to PCTs on a non recurrent basis through the central budget. From April 2004/05 onwards, both funds will be available to PCTs through baseline allocations and will form part of the Primary Care Enhanced Services floor.

The Primary Care Enhanced Service floor covers PCT investment in Primary Care Services for the totality of Primary Care (i.e. GMS/PMS). The floor will remain whether the Contract is accepted or not.

Investments should contribute to implementation of the NHS Plan and the delivery of Local Delivery Plans (LDPs). PCTs are free to include other local incentive schemes and payments within this arrangement.

The key points of the proposals are:

It will allow PCTs to invest at the outset an average of £5,000 per practice to support service improvement

Primary Care Enhanced Services Funding

Annex 7 of 'HSC 2002/012 Primary Care Trust Revenue Limits 2003/04, 2004/05 & 2005/06' sets out the arrangements for PCTs ensuring that appropriate levels of spending in primary care are secured.

This budget is part of these arrangements. Therefore any request via SHAs for feedback on deployment of Enhanced Service funding will include this budget.

The Aim of the Incentive Scheme

The vast majority of PCTs will now have in place prioritised plans to develop and improve local primary care services. These will reflect both national priorities and additional locally identified priorities.

This investment is intended to assist PCTs and their constituent practices to meet these priorities. Within the framework, locally designed schemes should provide the resources needed to support and incentivise practices to achieve locally agreed targets or, if feasible, to extend them.

PCTs and their practices will need to identify and agree ways to maximise the impact of the scheme. The process of clarifying and agreeing priorities for investment should consolidate the relationship between practices and the PCTs.

Incentivising General Practice

The NHS Plan has set out a number of priorities for primary care. It is for PCTs and practices to develop local incentive schemes within this broad strategic context. There are a number of key priorities where development of the practice and community based team could make a significant contribution to further improving delivery of services to patients. PCTs will therefore wish to seek agreement with practices to invest, for example to:

In developing incentive schemes to reflect these priorities PCTs should involve local practices in deciding how the investment should be focused. Whether local objectives and targets are set across the PCT or incentives are made specific to each practice in turn is an issue for local determination.

Multiple schemes covering different priorities may prove onerous and may best be avoided. It is for PCTs to decide on the merits of bringing all their strands of incentives together. They may also elect to top up the central sums provided for investment from their unified budgets or access funds, if available.

Investing for Change

The Investment portion of the budget for the three years of the Spending Review (2003/04 - 2005/06) will total £150m, £50m per annum (equating to an average £5,000 per practice). This is specifically and solely to be used by PCTs to invest in the development of practice based services that will help deliver the locally agreed incentive scheme targets. This will reinforce monies already available to PCTs for improvements to access.

Investment in practices should be proportionate to the size of the practice, with the specific objectives and targets that will result from the additional investment agreed by the practice and the PCT.

The money should be used to stimulate development at practice level. Practices should have as much discretion as possible in applying the money but PCTs will want to be assured that the money will help deliver the intended improvements. To achieve this, PCTs will want to identify with practices or primary care providers how the investment will achieve beneficial outcomes. Examples might include:

Where tangible improvements to local service delivery are more likely to be achieved through co-operative development initiatives, practices may wish to pool their resources and energies in order to maximise overall success. Where schemes are aimed at facilitating improved joint working between practices and/or between primary, secondary and community care colleagues, practices should ensure that incentives are in-line with agreed priorities so that they achieve outcomes that benefit the local health economy as a whole.

This upfront investment can be used to fund recurrent costs of service improvements.

Rewarding Achievement

The Reward portion of the budget for the three years of the Spending Review will total £150m, £50m per annum. Provided that they have achieved their targets the average practice may benefit by at least a further £5,000. Allocations have been made by RLAs for 2003/04. Future monies will be routed through PCT main allocations.

When PCTs design their schemes, they will agree with their practices and PMS providers, the arrangements for distribution of the payments to reward achievement of targets. As with the first allocation, it should be possible for each practice to achieve a reward proportionate to the size of the practice, where agreed targets of broadly comparable challenge have been achieved.

PCTs should agree mechanisms for ensuring that partial achievement of the objectives (akin to milestones) can be rewarded by partial payments of reward, therefore adopting an incremental sustainable approach to secure improvements.

When a practice or PMS provider has shown it has achieved targets and objectives agreed with the PCT, it will have the discretion to apply the agreed reward monies as it sees fit. This could be either as personal reward for those concerned or used to further extend primary care development within the context of the Local Development (LDP). Incentives could take the form of:

The payments under this part of the incentive scheme will not be recurrent. Practices will have to 'earn' entitlement to the reward element on an annual basis.

Investment of Retained Rewards

Where a practice was unable to meet the goals agreed with the PCT, that portion of reward monies to which the practice is not therefore entitled is to be invested by the PCT to support primary care development.

Funding Mechanisms

There are a number of mechanisms that PCTs may use to make payments to practices and primary care professionals:

For other clinical staff, the PCT could contract with the relevant professionals to provide services in the practice or, if employed by the PCT, through non-consolidated cash bonuses.

Monitoring

In conjunction with local practices PCTs will be required to assess whether those practices have achieved the objectives set out and agreed in their Local Delivery Plans and those of the wider primary care priorities set out in the NHS Plan. The Professional Executive Committee of the PCT will ensure that all agreements and decisions consequent to those agreements made between the PCT and individual practices are made in an open and transparent manner. This is to be backed up by external audit.

The Duration of the Incentive Scheme and Future Years

Funding for the Incentive Scheme has been secured for three years until 2005/06. This enables PCTs to make decisions in the medium term on supporting Primary Care innovations. The success of this scheme will be revised to support any bids for continued funding beyond 2005/06.