Labour looks set to repeat a key Conservative error by imposing heavy-handed central control on the NHS, according to the most comprehensive review yet of the last set of reforms.

Learning from the NHS Internal Market, a King's Fund book by a team of academics headed by Julian Le Grand, professor of social policy at the London School of Economics, gives The New NHS white paper a 'guarded welcome'.

It argues that the government was right to retain the purchaser/provider split, saying this made the NHS more cost-conscious and helped to clarify the roles of people within it.

Primary care groups are also broadly endorsed, on the grounds that GP- held budgets improved the responsiveness of providers.

However, the book says the

centralist tone of the proposed performance management framework, national service frameworks and the introduction of the National Institute for Clinical Excellence and the Commission for Health Improvement could stifle innovation and local initiative.

'Care will have to be taken that the government does not make the mistakes of its predecessor in paying lip-service to the idea of decentralisation while at the same time trying to retain a strong grip from the centre,' it says.

The book also questions whether PCGs will be too big to act as levers for change.

Professor Le Grand told HSJ that PCGs holding contracts for populations of 100,000 might be unable, for political reasons, to shift contracts from local trusts.

'The government has learnt the lesson that having primary care purchasing is a good idea, but (our review found) it tended to be smaller units that did better.

'I think groups covering between 20,000 to 50,000 populations would be more effective.'

Professor Le Grand emphasised that management costs were unlikely to fall under the new system. This contradicts government claims.

He believes that the more successful purchasing bodies within the previous internal market arrangements were associated with higher management costs.

Learning from the Internal Market avoids making a final judgement on whether the internal market improved or worsened healthcare. It says the internal market never really existed because of central control and the absence of real incentives and penalties at local level.

'We went through enormous upheaval, and in terms of measurable change not very much seemed to happen,' said Professor Le Grand. 'It probably wasn't worth it.'

Learning from the NHS Internal Market: a review of the evidence. Edited by Julian Le Grand, Nicholas Mays and Jo-Ann Mulligan. 0171-307 2591. 17.95

See Comment, page 17.

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