Primary care trusts should be “released” from commissioning acute care and left to concentrate on improving primary and community services, MPs have been told.

York University professor of health economics Andrew Street suggested that the Department of Health should fund hospitals directly, as part of his evidence to the Commons health select committee inquiry into commissioning last Thursday.

PCTs should be given the means to negotiate on an equal basis with hospitals or released from having to deal with hospitals

He said it was “difficult” for PCTs to control costs, a task made harder since the introduction of the payment by results tariff system.

Professor Street warned: “They are at financial risk.”

In his written evidence he said: “Either PCTs should be given the means to negotiate on an equal basis with hospitals or - more radically - they should be released from having to deal with hospitals altogether.”

He told the MPs: “This role could be undertaken centrally and PCTs would focus on the more neglected areas of primary and community care where there’s a considerable need for action.”

His written evidence added: “The transfer of responsibility would allow the DH to sharpen the incentives of payment by results, using the tariff more effectively to control volume, and it would better facilitate free patient choice of hospital.

PCTs that successfully kept patients out of hospital would receive a proportionately larger budget from primary and community care, he suggested, with the proportion increasing over time if strategies to reduce referrals proved successful.

But NHS North Yorkshire and York director of public health Peter Brambleby told the committee that he disagreed with the proposal.

“It’s important that someone is tasked with ensuring that the deployment of resources for that community genuinely reflects its needs,” Dr Brambleby said.

PCT Network director David Stout told HSJ commissioning was about improving patient pathways, not simply about payments between different organisations.

He said there were numerous attempts to invest in community based services, including community matrons and telemedicine to reduce the length of hospital stays or avoid unnecessary admissions.

However, he admitted PCTs had struggled to reduce acute activity and would need to do so in order to invest in community based services in the leaner years of public spending to come.

“The DH would have less means of influencing acute demand than PCTs,” he said.

Westminster PCT chief executive Michael Scott also disagreed with Professor Street’s proposal. “Controlling acute activity is undoubtedly challenging. But this isn’t the answer.

“The answer is to aggregate the scale to get the leverage you need.”

Mr Scott heads the North West London commissioning partnership, which aggregates commissioning across eight PCTs, with an acute commissioning budget of £1.4bn.

He said Professor Street was proposing the “ultimate aggregation” by centralising all of acute commissioning, but that took aggregation too far.

“You would lose local control and flavour and you wouldn’t be able to incentivise shifting care from the acute to community sector,” he said.

This is PCTs’ admission of failure – but everyone shares the blame