The Audit Commission has proposed substantial changes to the way it works with the NHS, including an overhaul of its high-profile value for money studies.

Health Strategy 20002003, issued for consultation today, is designed to align the commission's work more closely with the 'new' NHS and address concerns raised during recent consultation.

Controller Andrew Foster said: 'The NHS is changing rapidly and the Audit Commission must adapt with it.'

Feedback from managers showed that national value for money reports are generally well regarded, with the reservation that some do not chime with national priorities.

But Terry Hanafin, the commission's director of public service research, said local value for money reports were seen as 'variable, in the sense that you got chief executives saying sometimes they are excellent and sometimes not'.

The Audit Commission aims to consider national priorities when drawing up its value for money programme, develop a 'portfolio' approach to local work that will allow auditors to target areas of poor performance, and work more closely with the NHS Executive to ensure recommendations are acted on (see box).

Mr Hanafin said the Executive had already agreed to appoint a director to take charge of a report and 'use its performance management function through regional offices to chase up trusts about it'.

The commission is also responding to the government's NHS reforms and the need to work with new bodies, particularly the Commission for Health Improvement. Mr Hanafin said work would 'overlap', but he was confident the two bodies could agree an integrated approach.

Director of the Health Quality Service Peter Griffiths said: 'From the chief executive's point of view, what will be regarded as most valuable is synchronising and co-ordinating more than in the past with the Executive and CHI.'

The Audit Commission Health Strategy 2000-2003: a consultation document. www.auditcommission.gov.uk See news focus, pages 14-15; comment, page 19.

Key elements of the strategy

Need to be addressed

Value for money topics relevant to national and local agendas.

Improve local value for money work.

Respond to risks posed by 'new NHS' initiatives.

Don't duplicate Commission for Health Improvement.

Address communication weaknesses.

Proposed response

Consider national priorities in study selection.

Develop 'portfolio' of topics, work with the NHS Executive and other bodies.

Devise audit arrangements for new bodies, the private finance initiative and pooled budgets.

Agree an integrated approach.

Identify key messages for each target audience.