Taking GPs out of their consulting rooms to run commissioning consortia will cost the health service around £300m a year in GPs’ time, MPs have heard.

Dr Claire Gerada, chair of the Royal College of General Practitioners, told the public accounts committee today the college estimated 3 to 5 per cent of GPs would need to be actively involved in running consortia.

She said: “We’ve calculated, back of the envelope I’m afraid, because there isn’t any calculation out there, it will cost about £300m in terms of GP time.

“That’s just the GP time, I’m not talking about management costs.”

Dr Gerada said this assumed the equivalent of three GPs working full time on a consortium board, but she did not make clear how many consortia were assumed in the calculation.

Asked how GPs would handle their responsibility for “rationing” care under the new system, she said that was “the most important part of these reforms, and the one that really vexes us at the Royal College”.

She said the public was not aware of to what extent GPs decisions were currently informed by responsibility to the public purse.

“We prescribe, for example, 90 per cent of our medicines generically. That saves a staggering amount of money for the public purse,” she told MPs.

“If a patient wants a non-generic we steer them away from it. So it’s not patient choice, it’s based on evidence and value for money.

“But anything that undermines those decisions that we make, if the public think we’re making decisions on their health based on us benefiting in some way or our consortia benefiting in some way - and, remember, we’re going to be kept to account for financial balance - that’s where the problem will start.”

The abolition of practice boundaries would further complicate matters if patients were able to “shop around” until they found a consortium that would offer them a particular treatment, she said.

NHS East of EnglandGP commissioning lead Shane Gordon told the committee that the way the reforms proposed to introduce increased competition could make it difficult for commissioners to make savings by improving primary care.

He said: “There’s a difficulty in the way the competition side of the reforms is being proposed, which may [militate] against our ability to improve the investment [in] and restructuring of primary care to be fit for purpose for the 21st century.”

This was “principally because it is in very fragmented form at the moment, and therefore is not well placed to respond to the commercial levers that are being provided to us as commissioners, which are very large scale, and require very high levels of effort from bidders, for example.”

He added: “The track record of GPs, as tiny little providers, in that process is not uniformly good… We can’t just take a chunk of money and give it to GPs to do more stuff.”

King’s Fund chief executive Chris Ham told MPs that the government would have to find some way of writing off the debt of hospital trusts in the group of 20 to 30 that the fund estimates could never become foundation trusts under current rules.

If not, he added, “we’re not going to get to 2014 successfully with all organisations being in foundation trusts or managed by private companies that want to come in”.