Top primary care trusts will be able to take over poor performing PCTs as franchises under sweeping changes set to boost commissioning performance.

The opportunity is one of the “freedoms” unveiled by the Department of Health this week for the PCTs performing best at world class commissioning.

The department is also planning an “elite” of top NHS organisations that will be used to increase the pace of change in the health service.

There are no immediate plans to allow PCTs to set their own senior managers’ salaries, although the DH has said it will “consider pay flexibilities”.

DH director of commissioning Gary Belfield said the freedoms, starting in 2010-11 and likely to be available to the top 10-15 PCTs, amounted to a strategy to “reward the best and incentivise the rest”.

“Franchising” could range from a poorer PCT requesting help to commission an individual service to a top PCT stepping in to help it commission all services.

PCTs will also get to run budgets over multiple financial years, but only for specific proposals, and they will need strategic health authority approval.

Lighter touch performance management by SHAs and the DH is on offer and the DH is looking to see if it can give top PCTs preferential access to Lord Darzi’s £50m innovation fund for 2010-11.

Some top commissioners will be able to shape DH policy by having a “seat at the table” when policy decisions are made and a “big hitter” PCT chief executive will be seconded to the DH part time to improve PCT support and development.

But the worst PCTs will come under increased pressure. Up to seven face being “put on notice” that their performance must improve this year, with consequences next year if they fail to deliver better results.

Middle ranking PCTs will benefit from a support package designed to boost their skills.

Separately, the DH plans to establish an elite group from the top 20 per cent of NHS organisations - both commissioners and providers - to fast track innovative NHS policy.

It is likely the group will be chosen on the basis of performance against Healthcare Commission, Care Quality Commission, Audit Commission and SHA assessments, and a DH interview.

Mr Belfield said: “There’s lots of evidence internationally that if you work with the best and pull them along, you can pull the rest along.”

He acknowledged there would be disappointment that PCTs will not be able to set senior managers’ salaries immediately. The DH has however made a commitment to consider pay flexibilities: “It’s such a sensitive issue at the moment - I hope it’s not completely dropped. Somehow we need to find a way of incentivising people to work in PCTs.”

PCTs will only be eligible for the perks if they improve health outcomes, achieve a green governance rating and attain level three across the board for competencies, with some level fours.

Mr Belfield said the competencies were “a means to an end” adding: “The real goal is health improvement.”

Consultation is about to begin on the content of the assessment for next year - an “11th competency” for finance is on the cards. Its content is not yet decided but it will include measures to address the downturn.

Speaking before the rewards were confirmed, PCT Network director David Stout said PCTs would welcome the opportunity to invest over longer periods

He said a small number of PCTs with “expansionist tendencies” might like to take on work in other areas under franchises - senior managers would be able to work in poor PCTs without losing access to the freedoms they have earned at high performing organisations.

See HSJ’s analysis of PCT freedoms.

The seven freedoms for PCTs

  • Lighter touch performance management
  • Franchising (taking on some of the commissioning functions of poorer performing PCTs)
  • Direct access to the DH to influence national policy
  • Setting budgets across multiple years
  • Being highlighted as a top PCT
  • Preferential access to the innovation fund
  • DH commitment to consider pay flexibilities