Provider Company
Are there any other organisations setting up provider companies?
Yes. There are GP federations and Local Optical Companies being setup across the country. PSNC have recommended that all LPCs establish provider companies to support the interests of pharmacy contractors and many LPCs have already done so. For example, http://lipcohealthcare.co.uk/ has been trading successfully for three years and seven LPCs across Greater Manchester are jointly establishing a provider company.
Why are the LPCs working together?
The local CCGs all work together via the Northern Commissioning Forum and all use NECS for commissioning support. There is therefore increasing commonality across services. It is anticipated that tenders for prime providers will therefore cut across CCG and LPC boundaries. As an example, a recent tender for pharmacy services involved Northumberland CCG, North Tyneside CCG, Newcastle and Gateshead CCG and South Tyneside CCG seeking a single prime provider. With devolution there is the potential for public health services to be amalgamated. By working together the LPCs are forming a provider organisation of sufficient scale to be able to tender for regional services.
Are the LPCs able to form a company?
Yes. The constitution of the LPCs allow them to establish a company to support the interests of pharmacy contractors. The relevant clauses in the North of Tyne LPC constitution are:
4. 3.3.4. The Committee may establish or assist in the establishment of a body corporate formed for the sole purpose of supporting the interests of pharmacy contractors, provided that the memorandum and articles of the body corporate are agreed at a general meeting of the Committee by a two thirds majority of the total votes cast (including postal votes). 3.3.5. The Committee’s assistance of such a body corporate as mentioned in 3.3.4 above shall be withdrawn if requested by a majority of the pharmacy contractors voting (including by postal vote) at a general meeting. The other LPCs have similar wording in their constitutions. The PSNE Articles of Association will be distributed before the EGM.
How will PSNE Limited be structured?
PSNE Limited will operate as a membership association with a nominal subscription fee for each pharmacy premises. Subscribed community pharmacies will be able to shape and influence the business. However, PSNE Limited is not a company limited by guarantee and so its members are not undertaking to provide any guarantee towards the company’s liabilities. PSNE Limited is a company limited by shares with three shares issued. An LPC cannot legally own a share. For this reason: one share is held in trust on behalf of North of Tyne LPC for the benefit of subscribed members in their locality, one share is held in trust on behalf of Gateshead and South Tyneside LPC for the benefit of subscribed members in their locality and one share is held in trust on behalf of County Durham and Darlington LPC for the benefit of subscribed members in their locality. In matters requiring a vote, each share is weighted to reflect the number of subscribed members in each locality. The use of a nominee shareholder to hold the shares in trust was recommended by PSNC who use this model to control shares in companies which they operate. The reason we have structured the company is this way is to separate the benefits of membership from the liabilities of being a member of a company limited by guarantee or by being a shareholder. It gives subscribed members an influence over the company via the LPCs who are recognised, under section 167 of the NHS Act 2006, as the statutory bodies representing the community pharmacy contractors in their local areas.
Who controls the company?
As noted above, each of the LPCs involved controls one share for the benefit of the subscribed member pharmacies in their local areas
Why is there a membership fee?
PSNE Limited like any new company needs to raise start-up capital and working capital. The funds are required to pay legal fees, salary costs, tendering costs, etc. Without this capital the company would be unable to trade. The way that the LPCs have chosen to set up PSNE Limited minimises the costs involved so fees will be largely used to fund operating costs. The fee will be a modest amount and significantly less than most GPs have paid to setup their federations.
How much will it cost?
There will be a nominal subscription fee payable for each pharmacy premises. If the formation of the company is ratified, each pharmacy contractor represented by the LPCs will be given the option to join as members. Pharmacy contractors are not obliged to become members and a support to ratify the formation of PSNE Limited in no way implies that you will become a member. Even if you choose not to become a member we hope you will see the benefit of the LPCs operating a provider company for those who do wish to subscribe and that you will therefore support this proposal.
What are the benefits of membership?
Subscribed members will have the ability to shape and influence the business. They will have access to a wide range of discounted services which will be negotiated using our influence as a buying group. These will include utilities, merchant services, office supplies, vaccines, etc. They will also have preferential access to deliver those pharmacy services requiring only selected contractors and a reduced top-slice of management costs where these are not separately identified by the commissioners. Members will receive fair and appropriate rewards via service delivery fees.
How do we get further information?
Further details will be distributed by 24th June 2016 and more information will be provided at the Extraordinary General Meeting together with the opportunity to ask questions. Information will also be posted online at www.gandstlpc.net/providercompany. Queries can be addressed to Stephen Blackman, Chief Executive Officer, North of Tyne LPC at [email protected].
How do we register to attend the meeting?
Please register online at www.gandstlpc.net/providercompany.
How do we vote?
If you are unable to attend and vote at the Extraordinary General Meeting we would still like you to vote on the proposals An email / postal voting form is attached which you can complete and either: post to:S Blackman, North of Tyne LPC, Spaceworks, Benton Park Road, Newcastle, NE7 7LX, or email to: [email protected] Alternatively you can complete the online version at www.gandstlpc.net/providercompany. Completed voting forms must be received by noon on 29th June 2016.