The additional£50m allocated to trusts and health authorities to purchase computer equipment and services is to be provided in the form of credits, with supplies having to be bought through central NHS purchasing.

A Department of Health announcement is expected within the next two months, but HSJ has learned that both trusts and HAs will have to submit lists of the equipment they need to the NHS Purchasing and Supplies Agency.

These will then be used against individual accounts.

The intention of the new system is to ringfence the money so that it cannot be used for other purposes. Millions of pounds intended for IT were used in the last service and financial frameworks round to ensure organisations balanced their budgets.

The announcement of the new purchasing arrangements is on hold while negotiations continue with suppliers of software. The intention is that software licences will be paid for centrally, coming out of the£50m fund. The remaining capital will be allocated for the purchase of hardware and training.

Although the move has been welcomed as a way of ringfencing money for computer equipment, there are concerns that in the short term it will not allow better deals to be negotiated locally. There are also worries that the range of supplies may be more limited.

Addenbrooke's trust finance director Roger Swain said the move was building on past experience of centralising purchasing and was likely to be expanded in the future. He said: 'There is the principle of ensuring that hypothecated money goes to hypothecated things. The worry is that it reduces the freedom for local decision-making. '

He said it would work well 'as long as the central purchasing agency works with local procurement people so that it is not just take it or leave it' and 'there is a an allowance for local flexibility'.

Royal Orthopaedic Hospital trust director of information management and technology Pete Moseley said: 'I think It is a step forward. It provides a level of standardisation. But in the short term it could provide us with some value-for-money issues because some of the supplies may not be as competitive as they could be. '

Mr Moseley said there could be problems if trusts were expected to provide a procurement list a year in advance. 'I would prefer the flexibility to have the credits allocated in some shape or form. '

Plymouth Hospitals trust IT director Nick Thomas said: 'From what I have seen so far, the national negotiations over software are very welcome and allow us to keep pace. In terms of the buying on the national contracts, I can understand it. It makes sure money gets spent where it should be spent. '

But he said an element of local flexibility was desirable, and he hoped it was a one-off exercise.

He added: 'We do have local contracts that do give us local flexibility. '