Published: 10/02/2005, Volume II5, No. 5942 Page 3

The privatisation of Britain's railways has significant lessons for NHS reform.

British Rail's customer care was often awful, the services slow to respond to consumers and there was little incentive to drive innovation other than that provided by the personal ambitions of employees.

However, its long-established monopoly status meant those working within it were pretty clear about what was required of them and how they should relate to others in the organisation and to customers and suppliers.

The break-up of BR created an infrastructure business, a number of train operators and a host of new business arrangements with contractors - watched over by a regulator.

Against a background of growing demand the new system began to fall apart amid a welter of misunderstandings and misplaced assumptions. A major problem was that no-one had adequately thought through the new rules of engagement.

No-one is proposing privatising the NHS, but the introduction of choice, payment by results and foundation trusts is just as profound a change and the need for a new set of 'rules' just as pressing.

That the NHS system reform group has begun work on a new 'code of conduct' is good news (news, page 5). The Audit Commission's bid to act as watchdog on the abuse of payment by results is another sign of the times.

The reform group has its work cut out determining to whom the code should apply. It will also face hard questions over who should set and police any new 'rules' or whether relying on desired behaviours will be enough in this era of competition.

If rules are the answer, how can they be made enforceable and what should the penalties be for breaking them?

Luckily, the reform group can draw inspiration from individual health communities that have been thinking hard about how to operate in the new environment. Those that have not should hurry to catch up.

National action is important, but the best working arrangements are always determined as close as possible to the delivery front line.