The Audit Commission report, drafts of which have been sent to ministers and the British Medical Association, challenges the Government's claims that the system is providing better care to the patient and saving money for the taxpayer.
The report, to be published next week, concludes that GP-dominated purchasing of NHS care "is not desirable". One reason given is "few GPs have the skills or motivation to manage large practices fully and competently". The findings will reinforce Labour's claims that GP fundholders should be brought within the scope of NHS plans, in "joint commissioning" of care by family doctors. Harriet Harman, Labour's health spokeswoman, said last night: "If this leak is accurate, it shows the commission report supports Labour's case for changing fundholding so that all GPs work with hospitals and health authorities to shape patient care."
The report, a copy of which has been obtained by the Independent, could prove embarrassing for the Government as it embarks on a consultation exercise to boost the range of services being offered by GPs. Stephen Dorrell, the Secretary of State for Health, has rejected the advice to the Prime Minister in the "Maples letter" to keep the NHS out of the headlines in the run-up to the general election. He is facing Labour's challenge head-on by claiming that the success of GP fundholding has put Ms Harman on the defensive over her plans to replace it.
But the report, while not attacking the principle of fundholding, questions ministerial claims that the system is the driving force for innovation in the NHS. Many fundholders are "under-performing or making purchasing decisions which represent less than the best possible value for money".
Some fundholders have begun to re-shape services in a fundamental way to the benefit of patients, but the report says for others "the great majority of their purchasing is for the same services, in the same quantities, delivered in the same way by the same providers [hospitals] and with few measurable extra benefits to patients".
It says: "Most fundholders are not making full use of the increasing body of knowledge about clinical effectiveness to inform their commissioning decisions. One reason is that they face conflicting demands from their patients."
Fundholders were increasingly purchasing services such as physiotherapy, counselling and complementary therapies because they were requested by the patients, but they had not been proven to be effective. Few fundholders met Patient's Charter day surgery targets, and most were failing to maxi- mise efficiency savings from day surgery, mainly because the GPs still leave it to the consultant to decide.
One of the most controversial findings is over the use of savings by fundholders which should be recycled into patient care. The GPs are urged to try to improve direct patient care, for example, by reducing waiting lists by buying more surgery from hospitals, before investing the money in their premises - from which the GPs could gain personal benefit.
As a check on how the savings are spent, the GPs are supposed to provide a savings plan for the health authority to approve, but half of fundholders supplied no plans. There are reports that thousands of pounds were spent on a swimming pool built beside one GP surgery, supposedly for patients. Savings varied from a few thousand pounds in some areas to more than pounds 150,000 in others.
The report warns that windfalls from late invoicing by hospitals for work carried out for GPs will result in higher prices elsewhere in the NHS unless they act as a stimulus for the hospital to improve efficiency.
The Government's White Paper proposing fundholding in 1989 envisaged GPs would compete for patients, and that patients would move to practices offering the best services, says the report. "There is no evidence that patients are changing practice in large numbers for reasons other than changing address."
Fundholding practices are more likely than non-fundholding GPs to offer a wide range of services of all kinds at the practice but this is "often because of reasons which pre-date their entry into fundholding".
The commission found that a few fundholding practices had achieved fundamental changes but the majority had focused on one or two significant gains for their patients.
The reason for the "inertia" was partly due to the fear patients could be put off by some changes.
The GPs are also expected to have purchasing plans, but the commission found "some fundholders make no use of their own plans and only write them to satisfy what they see as a bureaucratic demand".
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