At a King's Fund event in central London last week, Lord Carter of Coles said any new GP practices will have to be put out to tender by PCTs under new DoH competition guidance.
The Cooperation and Competition Panel was set up in January to ensure that all clinical services are procured fairly as the DoH opens up the NHS to commercial providers.
'Stimulating the market' was the area where most PCTs were judged to have performed poorly under the DoH's World Class Commissioning (WCC) assessment, said Lord Carter.
But the DoH's drive to increase competition within the NHS came under fire from John Appleby, chief economist at the King's Fund.
He said there was 'embarrassingly little evidence' to support the policy and was concerned PCTs would favour the cheapest bidder rather than those who could improve patient care.
GPC member Dr Kailash Chand, attending the event, said he was unimpressed with Lord Carter's views.
'If a PCT already has a local provider that it knows is effective, value for money and good quality, why does it have to put it out to tender?' he said.
'The DoH should have plenty of evidence to convince us about this. The only place this happens is in America, which delivers at a huge cost. Lord Carter had no answers for this.'
When pressed on the evidence for introducing competition into the NHS, Lord Carter said: 'I didn't make the policy. I suggest you ask the secretary of state.'
Earlier this year, SHA chief executive Mike Farrar warned that WCC could encourage PCTs to use private firms and introduce competition unnecessarily (GP, 27 March).
The BMA this week opposed NHS commercialisation.
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