Priority setting in the NHS: purchasing (1995)

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 particular 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 to issue statements of priorities over a three- to five-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 and plans for improved care quality.

The committee recommended that a statutory requirement should be imposed to oblige consultation on health plans and that 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.

The committee recommended that the Department of Health should:

  • 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 and
  • 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 to be helped to understand decisions and make choices of their own. To enable this, more and better information needed to be made available, for example the treatment options available and the medical outcomes of treatment options.