The Department of Health has turned up the heat under primary care trusts following concerns over the quality of their plans to separate their provider arms.

Guidance published this week says that when primary care trusts split in two, commissioners should retain ownership of assets such as buildings so that PCT providers do not have an unfair advantage over other providers.

It recommends setting up fixed-term contracts with providers rather than ongoing deals and evaluating service quality regularly.

Provider arms must be operating as if they are a service commissioned under contract rather than a part of the PCT by April, when the performance regime will be applied to PCT provided services in their own right.

Choice of models

By October, they must signal whether they want to set up a community foundation trust or social enterprise for any services, as well as getting all plans agreed by strategic health authorities. Implementation must begin in 2010.

Plans should focus on how best to deliver care, rather than simply keeping organisations intact.

This means services supplied by one provider arm at present could in future be run by several distinct organisations.

The guidance follows fears that the separation process has been lacking momentum.

Poor guidance

Managers have privately raised concerns that the government line on splitting off provider services has not been clear enough. PCTs risk not thinking carefully enough about the new organisations they will be creating.

One said: "This is a once in a career opportunity - we need to make sure we've got the right strategic framework to encourage that."

Another said: "A lot of [PCTs] are looking to the Department of Health to push out national 'must dos' because they're struggling."

The guidance says PCTs are at vastly different stages in redesigning provider services.

It says: "Decisions should be led locally but it is in everyone's interest that change is managed coherently, to high standards, and reflects the consistent application of common guiding principles and criteria."

Provider arm menu

Options on offer:

  • Direct provision

  • Community foundation trust

  • Company limited by guarantee*

  • Industrial and provident community benefit society*

  • Community interest company*

  • Charitable incorporated organisation*

*social enterprise variants

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Advice for PCTs on managing provider arms