More than a third of the expected savings from transferring commissioning from primary care trusts to consortia will be lost if consortia cover small populations, the Department of Health’s impact assessment says.

The DH predicts the Health and Social Care Bill will save £1.3bn a year in commissioning costs after the transition is complete.

But the impact assessment states: “Preliminary analysis suggests that if GP consortia are established with an average size of 100,000 population, in a similar form to PCTs and without any sharing of resources to deliver some functions, then some functions may incur additional costs.”

It said that reduced administration costs could be offset by up to £475m depending on the size of consortia.

The assessment said calculations based on a sample of 11 primary care trusts found that “moving from PCTs to consortia with an assumed average population size of 100,000 would increase costs by 17 per cent”.  

The DH will not prescribe the size of consortia, but the impact assessment said that administration costs will “provide a strong incentive” for efficient commissioning and that consortia are “expected to work together” to deliver savings.

The assessment said that analysis of practice based commissioning, trialled within the PCT system, found “no significant trends over time or across consortia size were found for annual activity growth rates”.