Health committee report: 'Priority setting in the NHS: purchasing'


In 1995, the House of Commons Health Committee published a report on purchasing, as part of its series on priority setting. In this paper, the committee considered how demand for services was driven, with a focus on how priorities were set nationally and commissioned at local level.

According to the report, the NHS was suffering from a 'priority overload' by frequently having to plan for, and deliver, unplanned priorities. The committee encouraged the government to provide greater clarity on new priorities and issue statements of priorities over a 3 to 5 year period.

The committee found that there were significant variations in local priority setting. It was felt that district health authorities (DHAs) should make decisions based on assessed local needs and cost-effectiveness, and that decision making should be systematic, transparent and consultative. Local strategies and purchasing plans should include:

  • a statement of local priorities
  • health targets
  • delivery action plans
  • measures of success
  • plans for improved care quality.

The committee recommended that a statutory requirement should be imposed to oblige consultation on health plans. GP fundholders should be required to sign up to strategic priorities every year before gaining access to their budgets.

The committee recommended that the Department of Health should:

  • set a framework within which purchasers could define a local package of services
  • require purchasers to establish clear local arrangements to ensure access criteria were transparent
  • ensure that the NHS takes into account the principles of effectiveness, public choice and efficient use of resources in all its decision making
  • ensure purchasers involve the community health councils (representing the interests of patients and the public) in the development of future purchasing.

The committee argued that patients needed help to understand decisions and make choices of their own. To enable this, more and better information needed to be made available on, for example, treatment options available and the medical outcomes of treatment options.

Government response

In March 1995, in its response to the Health Committee's report, the government agreed with the approach endorsed by the Health Committee on how priority setting should be undertaken (ie that there should be a separation between strategy and operational delivery). The government noted that:

'The task of giving strategic direction to the NHS falls legitimately within the domain of central government. But decisions involving local services should be made as close as possible to the patients and public they affect.'

The government recognised that demand was potentially unending and that priority setting would always be vital in the context of a finite budget. The government did not want to establish national lists of treatments that would be funded and those that would not. However, the government outlined its intended approach for priority setting, namely that:

  • ministers would set out national priorities and targets for the NHS
  • health authorities and GP fundholders would assess local needs and decide, in consultation with the public, the treatments that were required
  • individual clinicians would decide on the most clinically appropriate treatment for each patient.

The principles of equity, efficiency and responsiveness would inform local decision making where there was a need to balance the needs of individuals and communities.

The government suggested that public involvement should play an important role in purchasing. They pledged to promote future initiatives and guidance to promote this aspiration. The government noted that purchasing was a comparatively new role that was still evolving and the document outlined plans for the NHS to increasingly adopt an outcome-driven, evidence-based approach to decisions about the treatment of patients.


House of Commons.
Government response to the first report from the Health Committee.
Priority setting in the NHS: purchasing: session 1994-95.
UK Parliament; 1995.

Matthews E, Russell E.
Rationing medical care on the basis of age: The moral dimensions.
Nuffield Trust; 2005.