NHS chief executive David Nicholson signalled that the future of SHAs and PCTs was under review when he questioned their value at the annual meeting of the National Association of Primary Care (NAPC) in Birmingham on Wednesday.

GPs looking for incentives to make real their plans for community health collaboratives of ‘foundation practices' holding real budgets were heartened by Mr Nicholson's speech.

Mr Nicholson said: ‘We spend £1.4bn on SHAs and the running costs of PCTs. Can we genuinely say that money is spent to the best effect?

‘Can some of it be spent much better? Can we organise ourselves much better? The answer is undoubtedly yes. These are the issues we need to tackle.'

He described the £20bn savings that would need to be found 2011 to 2014 as a ‘massive challenge'. He welcomed the emphasis of the Darzi review on quality.

He said: 'It's perfectly possible to improve quality and reduce costs simultaneously.'

Mr Nicholson described primary care as ‘critical' to this goal because it was at the ‘heart of solutions'.

He said a transformation of community services was key and that plans ‘to give it a real sense of direction and pace' would become public at the end of this year

Mr Nicholson added: ‘The potential of commissioning is enormous but now it needs ambition and drive to make it a reality. I welcome the NAPC manifesto. We need to make sure that we have a real system that can bring people from dependence on their PCTs to one where they have some independence from PCTs and more power to invest money in the way you want. That has to be earned.'

Key was enabling PCTs to give away power to clinicians on the frontline who were the only ones who could truly make a difference to patient care.

Afterwards Dr James Kingsland, NAPC president, said: ‘£1.4bn? We could do something with that.'

Dr Kingsland expects a greater emphasis on practice-based commissioning (PBC) in the NHS operating framework to be published early next month

Dr Peter Smith, NAPC vice president, said: ‘I would like to see more management devolved down to practice level to start doing PBC effectively, so our managers are working for primary care rather than seeking to control it.'

He described it as more than incentivising community health collaboratives. ‘We need a lot of good information at primary care-level it just isn't there. We need to start putting resources into accurate activity information.'

Editor's blog: Revitalising practice-based commissioning is the only dish on the menu