Health Policy Monitor
Skip Navigation

Developments in practice-based commissioning

United Kingdom
Partner Institute: 
London School of Economics and Political Science
Survey no: 
Adam Oliver
Health Policy Issues: 
Remuneration / Payment, Responsiveness
Reform formerly reported in: 
Developing Practice-Based Commissioning
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no


As detailed in report 8(2006), GP practices in England are now allowed and generally expected to hold a practice-based 'indicative' commissioning budget from their primary care trust (PCT). This report is part of an ongoing series that will report developments in this policy initiative.

Recent developments

GP practices can now accept an indicative budget from their PCT to manage directly the delivery of care for their patients, and are allowed to keep at least 70% of any savings they make. GPs are required to invest these savings into their premises or capital developments to broaden the range of primary care services they offer. The policy is in the early stage of implementation, but this report will detail the progress that has thus far been made.

 Search help

Characteristics of this policy

Degree of Innovation traditional rather traditional innovative
Degree of Controversy consensual neutral highly controversial
Structural or Systemic Impact marginal rather fundamental fundamental
Public Visibility very low low very high
Transferability strongly system-dependent rather system-neutral system-neutral
current current   previous previous

It would be possible to introduce this policy in other countries that have the GP gatekeeping role in place.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Initiators of idea/main actors

  • Government: Some opinion leaders have been very supportive of the developments. Others have been more skeptical

Stakeholder positions

The Government, encouraged by some influential policy entrepreneurs and academics, is very supportive of practice-based commissioning, believing that the incentives embedded in the mechanism for GPs to commission services carefully so as the maximise their financial 'surplusses' will offer genuine improvements with respect to GP referrals. GPs in turn seem to be generally supportive of the policy due to the financial incentives consequent on volunteering to be a budget holder, and due to the potential finanical incentives of being allowed to reinvest a large percentage (specifically, 70%) of any surplusses they make back into their practices. The pubic visibility of the policy is currently quite low - the details of NHS financing methods lie beyond the interest of most patients and members of the general public. Essentially, we have a return to GP fundholding.    


Actors and positions

Description of actors and their positions
Central Governmentvery supportivevery supportive strongly opposed
Primray care trustsvery supportiveneutral strongly opposed
GPsvery supportivesupportive strongly opposed
Patients and the general publicvery supportiveneutral strongly opposed
current current   previous previous

Influences in policy making and legislation

There are no new developments with respect to the legislative process. The policy has been implemented, and is now being followed through.

Legislative outcome


Actors and influence

Description of actors and their influence

Central Governmentvery strongvery strong none
Primray care trustsvery strongneutral none
GPsvery strongstrong none
Patients and the general publicvery strongstrong none
current current   previous previous
Central GovernmentGPsPrimray care trustsPatients and the general public

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

In November 2006, the Government announced new guidance for Primary Care Trusts (PCTs) to ensure that more GP practices volunteer to become practice-based commissioners. The guidance includes:  

  • Reduced bureaucracy in developing business cases and tendering, which makes it easier for GP practices to develop new services.  
  • The scope for practices to take on a larger budget, which should enable them to increase the range of services they provide.  
  • Strenghened local financial incentive schemes to encourage more practices to volunteer to take on the role of commissioners, and to motivate them to achieve national tagets, such as the 18 week maximum waiting time target.  

In December 2006, the Government announced that 91% of patients in England belonged to a practice that had received the incentive payment for volunteering to become a practice-based commissioner. Of the 8,433 practices in England, 7,525 had received the incentive payment, and this figure had risen to 7,849 practices (93%) by January 2007. 

Monitoring and evaluation

The Department of Health, the PCTs and, presumably, the Healthcare Commission will monitor the performance of GPs who volunteer to hold their own indicative budgets. The Government expects that by holding their own budegts, GPs will be less likely to make unnecessary referrals to hospital. According to one Health Minister, this will "relieve pressure on the NHS, provide more convenient care for patietns, deliver better value for money for the taxpayer, and help .. slash hospital waits."  

It is really too early to tell if this policy will be a success, but on very limited evidence the Government announced in January 2007 that GP practices who have become commissioners in some parts of the country have cut referrals for hospital treatment by between 25% and 33%. The Government have stated that these reductions are for unnecessary hospital appointments, although the 'necessity' (or otherwise) of these appointments is not altogether clear. 

Expected outcome

It is too early to tell if the policy will deliver the 'outcomes' that the Government hopes for, although merely in terms of GPs accepting the commissioning role, the policy seems to have been a success.

Impact of this policy

Quality of Health Care Services marginal neutral fundamental
Level of Equity system less equitable neutral system more equitable
Cost Efficiency very low neutral very high
current current   previous previous

No change as yet.


Sources of Information

Reform formerly reported in

Developing Practice-Based Commissioning
Process Stages: Implementation, Evaluation, Change

Author/s and/or contributors to this survey

Adam Oliver

Suggested citation for this online article

Adam Oliver. "Developments in practice-based commissioning". Health Policy Monitor, April 2007. Available at