Sobering diagnosis of a difficult case

"A little disappointing," is the verdict of Chris Ham, Professor of Health Services Management at Birmingham University on the Audit Commission's report. "It feels as though it is addressing yesterday's questions, not today's."

Fundholding always generated more heat than anything else in NHS reforms. It has been seen as the catalyst which has led fundholders and non-fundholders to become involved in health-care commissioning, or as a costly and dangerous route to a two-tier health service.

For fundholding's evangelists, the report is sobering. Where fundholding works, it finds, it works very well; where it does not, it is ropy. And it is likely to be difficult and expensive to lift the worst to the level of the best. But the report has its limitations: for good and bad reasons, it did not compare fundholders to health-authority purchasing, to GP commissioning schemes, or to any of the other models for buying health care that litter the NHS.

But it is no secret that health-authority purchasing got off to an equally slow start or that GP commissioning has low-water failures to match its high-water ones. In purchasing health care, everyone is at the bottom of a long learning curve. In addition, fundholding is changing. Its keenest advocates have moved on to total purchasing - buying all health care, not just waiting-list operations for their patients.

The way forward is not to attempt to abolish fundholding or to insist on GP commissioning but to find ways of making and taking the best of both, an approach to which the Government is slowly moving and which Labour would do well to adopt.