General practitioner fundholding allows flexible use of resources at the coal-face, provides incentives to alter practice such as prescribing within cash limits and forces hospitals to be more responsive to general practitioner demands. However, the additional administrative costs both in time and money, the fragmentation of purchasing power compounded by a lack of expertise and experience in contracting, and the poor information and financial systems which exist in the National Health Service are severe constraints. A suggested way forward is to delegate responsibility for running the scheme, including the contracting and billing, to district health authorities offering more flexible budgets to all practices and extending the scheme as local information systems allow. This will reduce fragmentation of purchasing power and administrative costs and re-establish local accountability. It will also give the general practitioner more time to see and treat patients, who will see the system as being fairer.
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