Trusts are to be given greater freedom from central government to set their own local priorities and spend government funding as they see fit.

The public service agreement targets that the government has tied to Whitehall departments' spending allocations since 1997 are to be drastically reduced in number.

For the remaining PSA targets, the emphasis will shift from processes to outcomes - giving managers more flexibility over how to deliver key objectives.

The new PSAs - to come into force next year - are expected to reflect the Department of Health's outcomes framework.

This lists 40 outcomes under three general headings of better health and well-being, better care and better value.

Outcomes listed in the framework - on which a two-month consultation closes tomorrow - include pledges to help people stop smoking, give women a choice of maternity services and financial stability.

HSJ understands the next set of PSAs will cover three areas, with at least one of the present four increasing life expectancy to be retained.

NHS Confederation policy director Nigel Edwards said he expected the new PSAs to fall in line with the outcomes framework.

He said consultees, including the confederation, were 'broadly in favour' of the framework.

But he said he would be surprised if the new measures did not include detailed indicators, of which there are 19 under the eight existing PSAs for health.

He said: 'You still need these indicators to account how you are doing to the public and Parliament.'

NHS North West chief executive Mike Farrar said: 'They will try and square it up [with the outcomes framework] so PSAs will hopefully relate to it and feel much more locally focused rather than top-down.

At present there are 110 PSAs for 19 Whitehall departments. Treasury minister Andy Burnham said these are to be reduced to 30. They will be published with the comprehensive spending review in October.

These will be 'less focused on internal processes and more on the goals that we want to see as a society'. The vast majority will be shared among departments.

Mr Burnham, a former health minister, said: 'This is about reducing the reliance on nationally set targets. There should be fewer of them, and more set at a local level.'

He also signalled changes in practice by calling for 'more measurement of user satisfaction' and 'much greater provision of real-time data at local level'.

King's Fund chief executive Niall Dickson said while the move towards outcome targets was to be welcomed these would prove more difficult to measure. He said: 'They take place over a longer period of time and they are more difficult to disentangle from the contribution an intervention or healthcare system can make.

'So, for example, you could have big improvements in life expectancy which would have little or nothing to do with the healthcare system.'

See comment, 'Fewer targets means more accountability'