Primary care and acute trusts need to negotiate their own ways to unbundle the payment by results tariff, health minister Lord Warner said as he launched the 'road test' of next year's tariff.

Primary care and acute trusts need to negotiate their own ways to unbundle the payment by results tariff, health minister Lord Warner said as he launched the 'road test' of next year's tariff.

The tariff for 2007-08 encourages organisations to negotiate ways to unbundle the tariff locally, so that payment for different parts of the patient pathway goes to different providers, whether in the hospital or community, rather than providing definitive prices.

And Lord Warner said he would consider the rollout of unbundling to be a success if about a quarter of trusts made progress on it this year.

He told HSJ: 'Most people expect some degree of unbundling will happen in the future, but we erred on the side of caution in not making it mandatory and trying to respond to concerns that it should be clinically led.'

He said the onus would be on local trusts to improve their clinical engagement and intelligence about the provision of clinical services. 'In order for this to work locally people will have to collect data and do it better.

'And if we get a respectable number of people doing this next year, as I expect we will, we will probably improve the data quality phenomenally in one year without making a lot of effort.

'My personal view is that we will end up with a much more ambitious programme next year. And what we will get out of the NHS is a sense of what their appetite is for this and their willingness to invest in a data collection system.'

The guidance contains indicative tariffs for unbundling community rehabilitation for a number of high-volume healthcare resources groups affecting the elderly, such as hip replacement and diagnostic imaging.

However, a letter to the service this week from NHS chief executive David Nicholson stresses that these should only be used as a 'starting point' for local negotiation.

The tariff sets a price uplift of 2.5 per cent, net of 2.5 per cent efficiency savings.

This compares with the lower uplift of 1.5 per cent last year, which many acute trusts felt was inadequate.

Lord Warner acknowledged that the 2.5 per cent uplift was 'a bit more demanding than last year' for commissioners.

He said the early road testing was a response to 'the glitches the NHS found' last year.

Trusts will have until 24 November to identify 'any unexpected consequences?that we have missed'. However he stressed it was not a consultation. 'It is testing the equipment. It is not about &Quot;what you would like or not like&Quot; but does it work in the way you would expect. It is not looking for a vote of confidence by everyone in the NHS.'

Assuming no problems are identified, the tariff will be confirmed in December along with the operating framework for 2007-08

Lord Warner said a consultation paper on the future of payment by results, which had been due in the autumn but was now scheduled for the new year, would look at issues including the control of tariff-setting, implementation of mental health HRGs, data collection to support unbundling and 'how far you take the concept of an average tariff'.

NHS Confederation policy director Nigel Edwards described plans to leave unbundling to local negotiation as 'very sensible'.

But he said the 2.5 per cent uplift was set to 'steer a very tight course' given the increased costs of pay awards, and the target for 2.5 per cent efficiency gains.

One London PCT chief executive said he could not understand why the DoH had gone for a rise of 2.5 per cent compared with the 1.5 per cent last year, given that pay rises this year were due to be capped at 1.5 per cent.

'Given that pay is one of the main drivers of inflation I would like to know where the extra 1 per cent comes from, I will be looking quite hard to see how this has been justified.'

On unbundling, he questioned whether local negotiation would work unless strategic health authorities were given the power to 'insist on it being done' even against the vested interest of acute trusts.'

Download documents on the new tariff here