NHS England has launched a consultation on two new contracting models designed to support the delivery of neighbourhood health services. These proposals form part of the wider ambition in the NHS 10 Year Health Plan to organise care around local populations and integrated neighbourhood teams.

For many organisations outside the NHS commissioning system the most important question is not the detail of NHS contracts, but whether the new arrangements will make it easier to influence service design, develop stronger relationships with health commissioners and secure fair funding for the work they deliver.

_{What is changing?}

To date, Primary Care Networks (PCNs) have been the main vehicle for neighbourhood-level collaboration in primary care, supported by the Network Contract Directed Enhanced Service (PCN DES), with nationally specified requirements and funding.

NHS England’s intention is to create more integrated neighbourhood services, and the consultation proposes to achieve this through two new contract models:

• Single Neighbourhood Providers (SNPs) serving a single neighbourhood population, typically around 50,000 people.
• Multi-Neighbourhood Providers (MNPs) serving several neighbourhoods, often around 250,000 people or more.

The changes allow for the possibility of creating organisations that hold responsibility for coordinating, commissioning and subcontracting a much wider range of services than is typical today. The proposals suggest that neighbourhood contracts could encompass a broad range of services, including proactive care, support for people with complex needs, medicines optimisation, leadership functions and shared infrastructure. Core GP contracts would remain unchanged.

The consultation does not propose additional national funding for neighbourhood services, nor does it claim that the new models will automatically increase spending on front-line care. Its primary purpose is to create new contractual mechanisms and greater flexibility in how existing resources are organised.

_{A potential shift towards more local influence?}

Historically, local authorities and service providers have had limited direct influence over NHS commissioning decisions. Services have often been commissioned through multiple separate contracts held by NHS organisations, with strategic decisions made at system level and relatively little opportunity for providers to shape priorities.

Under the proposed SNP and MNP models, commissioners would be encouraged to organise services around neighbourhood populations. NHS England specifically envisages neighbourhood teams involving adult social care, public health, housing, children's services and voluntary sector organisations alongside NHS providers. For providers, this could mean engaging with a smaller number of clearly identified commissioning and delivery partners rather than navigating numerous separate NHS organisations and contractual relationships. 

In theory, this should create more opportunities to contribute to the planning and design of local services, particularly where neighbourhood teams become the primary mechanism for delivering care. Depending on how local arrangements are established, this may support more collaborative discussions about service development, performance expectations and future investment. 

However, much will depend on local implementation. There is no guarantee that individual providers will have a greater voice, and some organisations may find their influence is reduced when exercised through neighbourhood partnerships rather than through direct contractual relationships with commissioners.

_{How would funding be distributed?}

The consultation does not propose a single national funding formula. Instead, funding arrangements would largely be determined locally by Integrated Care Boards (ICBs) and, where established, Integrated Health Organisations. For providers delivering community, social care or preventative services, this may create opportunities to demonstrate the value they bring to population health outcomes and to secure funding through integrated neighbourhood arrangements.

Under the proposed models:

• ICBs would continue to allocate funding for neighbourhood services.
• SNPs or MNPs could receive funding to deliver or coordinate agreed services.
• MNPs could distribute funding and incentives across participating providers.
• Existing PCN-level investment would broadly be maintained where SNP arrangements replace the current PCN DES model.

In a direct SNP model, funding would largely flow from the commissioner to the SNP and then to delivery partners. In an MNP lead-provider model, funding could flow first to the MNP, which would then subcontract services and distribute funding to SNPs, GP practices and other providers. This creates opportunities for more flexible local investment but also means that some providers will become one step further removed from the commissioner than they are today.

^{The risks associated with lead-provider models}

The consultation presents the MNP lead-provider approach as one option rather than a mandatory model and there are several issues that providers and local authorities may wish to consider carefully.

_{Reduced direct influence and unequal bargaining power}

If an MNP becomes the lead provider for a large population, many organisations will no longer hold contracts directly with the NHS commissioner. Instead, they will contract with the lead provider. The practical consequence is that decisions about funding distribution, service specifications, performance management and contract variations may increasingly be mediated through the MNP rather than discussed directly with the commissioner.

Smaller community providers, social care providers, voluntary organisations and specialist services may therefore be concerned about:

• payment terms;
• contract duration;
• performance deductions;
• transfer of financial risk; and
• the ability to challenge commissioning decisions.

The consultation acknowledges these concerns indirectly through its emphasis on fair procurement and making it possible for smaller organisations to participate.

_{Administrative costs}

One potential advantage of a lead-provider model is having a single organisation responsible for joining services together and managing performance. However, creating an additional organisational layer may also increase administrative overheads. Instead of multiple providers dealing directly with commissioners, providers may find themselves reporting to the lead provider, which in turn reports to the commissioner. This can simplify accountability in some respects while increasing management requirements and demand on extra administrative resource in others.

_{Concentration of risk}

Lead-provider contracts often transfer responsibility for delivery outcomes and performance to a single organisation. This can encourage coordination and innovation but also concentrates financial and operational risk, ultimately resulting in market consolidation. If funding proves insufficient, demand rises unexpectedly or performance targets become difficult to achieve, lead providers are likely to manage that risk through subcontracting arrangements, passing some pressures down the supply chain. 

If power, information, funding and risk are shared transparently, the model could support genuine neighbourhood partnerships. However, the success of the proposed MNP lead-provider model is unlikely to depend on the legal contract alone. The key test will be whether lead providers behave as system leaders, partners and conveners or as prime contractors managing risks within a supply chain.

_{What should local authorities and providers be asking?}

The new contracting arrangements create opportunities to strengthen integration between health, social care, housing and public health services. They also raise important questions about governance, accountability, decision-making and resource allocation. Local authorities and providers that engage early in the consultation process may be better placed to influence how these arrangements develop locally.

For organisations that currently have limited influence over NHS commissioning, the most important consultation questions to ask include:

• How will providers and local authorities be represented in neighbourhood decision-making?
• To what extent will providers and local authorities be involved in shaping neighbourhood priorities and service specifications?
• How will commissioners ensure that neighbourhood integration strengthens, rather than weakens, the voice of smaller and specialist providers?
• How will the contracting and governance arrangements ensure that funding decisions are transparent?
• How will arrangements ensure funding will be invested in front-line services and not retained for management and contract administration? 

The consultation is aimed at ICBs, general practice, PCNs, community and other providers, Local Authorities, patient representatives and other stakeholders. Patients, users of social care services and members of the public may also wish to contribute to the consultation which remains open until 10 September 2026.

Responses to this consultation will inform further, detailed consultation on firmer proposals for both the Multi Neighbourhood Provider and Single Neighbourhood Provider Contracts later this year.