These cuts pose the greatest risk to the programme of NHS reforms set out in the Bill, according to the impact assessment report.

It adds that budget cuts will compound threats to the NHS posed by the scale of the NHS reforms.
The report adds that although quality premium payments will offer an incentive for GPs to engage with the reforms, ‘a risk remains that not all GPs will engage’.

Launching the Bill on Wednesday, health secretary Andrew Lansley spelled out why he believed it was right to hand greater control over NHS budgets to GPs.

He said: ‘The point where clinicians and patients meet is now the headquarters of the NHS.’

Documents released alongside the Health Bill reveal the cost of the NHS reorganisation will total almost £1.5bn over three years. However, the DoH calculates that these costs will be offset because they will slash the cost of NHS administration by £5.2bn over four years from 2011/12 to 2014/15.

Mr Lansley also claimed the government was taking a more measured approach to the pace of reform to address critics’ concerns.

He said: ‘There are changes that impact on pace, there will be a greater sense of piloting.’

But he added: ‘We were very clear that we wanted to achieve pace of change because we shouldn’t allow any opportunity to improve outcomes to be lost.’

What the Health Bill says about GP consortia:

• The NHS Commissioning Board can sack a GP consortium’s accountable officer, or disband the consortium altogether if it underperforms.
• The board can vary the area a consortium covers, force it to take on additional practices, or remove practices from it.
• The board can strip consortia of any functions it wishes if they underperform.
• Consortia can pool budgets for some or all of their functions, with other consortia, or through the NHS Commissioning Board.
• The board can top-slice consortia funding to create contingency funds.
• Consortia performance will be assessed annually and published by the NHS Commissioning Board.
• Consortia must publish annual plans setting out how they will exercise their functions.
• The board can pay consortia bonus payments if they perform well, even offering this up front if they expect strong performance.

What the Health Bill says about NICE:

• NICE will have to consider the impact of treatment on social care costs and to consider the ‘desirability of promoting innovation’. The substance of advice developed by NICE must be free from government interference.
• The Health Bill opens the door for NICE to play a role in providing training on NHS services and public health services. NICE will also lose its status as a special health authority and become a corporate body.