Radical reworking of the payment by results tariff and the GP contract is needed to make the savings required in the financial downturn, the NHS Confederation has warned.

In its report Commissioning in a Cold Climate the primary care trust network says it is essential to free up cash locked into agreements designed when funding was growing.

The network calls for best value tariffs for acute services “as a matter of urgency” and a “more explicit statement” on standards of service under the national primary care contract.

PCT Network director David Stout told HSJ: “These policies were designed for a period of growth. We’re entering a period of recession so we need to make sure they are fit for purpose in these new straitened times.”

Mr Stout said patient choice and rules that say services can be delivered by any willing provider made it even harder for PCTs to decommission providers not delivering best value - last year HSJ found two out of three PCTs were not doing this.

As a result, community services and block contracts come under pressure. These are “almost certainly the wrong place to be looking” for savings, he said.

Mr Stout said the Department of Health should clarify exactly what was expected from the GP contract to avoid duplication with local agreements.

And he said the primary care contract made it harder to shift some services from GPs to pharmacies, as if pharmacies provided them then GPs would be paid under the contract regardless.

PCTs called for tighter referral criteria and higher thresholds for treatment in some cases.

The report says the assumption that every NHS service adds value has been shown “almost certainly not to be the case” by the first patient reported outcome measure trial.