David Nicholson told the National Association of Primary Care (NAPC) conference in Birmingham last week that a decision on whether PCTs had to outsource community services would be made next month.

He added that a target could prevent acute trusts that run community services from focusing too much on hospitals. One idea was for them to submit plans to cut admissions across their services by 20 per cent.

Matthew Swindells, former DoH adviser and now managing director (health) for consultants Tribal, said hospitals would need to see 20 per cent fewer patients to save the £20 billion the NHS wants between 2011 and 2014.

GPC chairman Dr Laurence Buckman warned: 'GPs will be concerned if services are diminished in hospitals without providing appropriate and equivalent services in the community.'

An NAPC manifesto launched at the conference backed 'foundation practices' with real budgets forming larger 'community health collaboratives'.

Mr Nicholson also said that PCTs and SHAs cost £1.4 billion to run and the money could be better spent. The NAPC would welcome using part of this to revitalise practice-based commissioning (PBC). A DoH PBC push is expected 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.'

More news from last week's NAPC conference