GP surgery first to be stripped of fundholding

A FAMILY DOCTOR practice in Sheffield has been stripped of its fundholding status after running up a reported pounds 100,000 deficit and placing a block on the referral of non-urgent patients.

The Far Lane Medical Centre was among the surgeries that set the pace for the Government's NHS changes, opting for fundholding status and the power to control its own budget in April 1991. The Trent Regional Health Authority said yesterday that the practice's 'failure to effectively and efficiently manage the fund' had prompted its decision to remove the status. It is the first practice to have fallen foul of Department of Health rules and guidance governing fundholding.

In a statement, the health authority expressed its dissatisfaction with the relationship between the Far Lane centre and the private company its partners established to provide services to the surgery's patients.

'Specific conditions set down by the RHA relating to contractual arrangements between the practice and a private health care provider in the ownership of the partners of the practice were not fulfilled, and there was a recurrent overspending of the fund,' it said.

The move is bound to embarrass Virginia Bottomley, Secretary of State for Health, who has consistently proclaimed fundholding as one of the success stories of the NHS changes and the split of service functions into purchasers and providers of health care.

Neither the Department of Health nor the Trent RHA would comment further on the case, given the right of the practice to appeal to the Secretary of State.

David Blunkett, Labour's health spokesman, welcomed the decision and forecast that several other fundholding practices might suffer the same fate as they struggled to balance their books. 'What we are seeing is the logical outcome of the operation of a market in the NHS where finance and accountancy take precedence over the needs of patients.'

Helen Jackson, Labour MP for Sheffield Hillsborough, is pressing the all-party Commons public accounts committee to investigate the finances of the practice. Last year, the Far Lane centre, which serves 12,000 patients, set up Trafalgar Medical Services, a company which provided medical treatment to the practice. Critics argued that such companies made a nonsense of the purchaser-provider split. Ms Jackson said: 'I understand the practice ran out of money at the end of last year, but nobody wrote to inform the patients as far as I know.'

No one was available to comment at the practice last night. From 16 April, financial control of the practice will revert to Sheffield Family Health Services Authority.