DoH guidance for PCTs recommends that even inflationary increases should be curbed to cut costs in 2006/7 on contracts for PMS and alternative provider medical services. Officials said that the specific aim was of 'constraining the costs of such agreements/contracts'.
The document states: 'PCTs and SHAs will wish to be mindful of the following elements of the GMS agreement: no uplift to any existing element of the contract for inflation or cost pressures in 2006/7 (and) the efficiency savings sought for both 2006/7 and future years.'
Even where PMS uplifts have already been agreed, 'PCTs and SHAs will want to attempt to negotiate additional efficiencies with that contractor,' says the guidance.
'If PCTs and SHAs are unable to reach agreement with such contractors, they will need to carefully consider... the continuing appropriateness of the existing contract they have with that provider.'
Health minister Lord Warner said that the aim of the guidance was to ensure parity between GMS and PMS practices, both in terms of patient services and value for money.
The guidance follows a warning from the GPC that PCTs can terminate PMS contracts at any point, without reason.
The GPC said: 'PMS regulations state that either party may terminate the agreement by serving notice in writing, but do not specify the notice period.
'GPs should be aware that PCTs may use these regulations.'
The GPC has asked GPs to contact its office if their PCT attempts to terminate their contracts.
Dr John Canning, chairman of the GPC's contracts and performance subcommittee, said the guidance was not unexpected and could cause 'a lot of heartache' for PMS GPs.
He said: 'We said from the beginning that you can gain a lot from a local contract but you can also lose a lot.
'We will have to see what test cases say about terminating PMS contracts. There will be test cases, although they will probably be tried by the NHS system and not the law courts.'
He recommended that PMS practices start talks with their LMC and PCT about their future and examine their contract to ensure they were delivering.
Dr Adrian Midgley, a PMS GP from Exeter in Devon, urged the government to 'keep its fingers out' of local agreements.