James Westhead gets reaction to the Queen's speech from doctors and patients

GPs, working together in Primary Care Groups (PCGs) of approximately 50 doctors, will control the budget for health care services for local populations of around 100,000 people.

Announcing plans for a NHS Modernisation Bill, the Queen said: "My government will continue to build a modern NHS to meet the needs of the whole nation.

"A Bill will be introduced to replace the NHS internal market which put hospitals, doctors, and nurses in competition with each other.

"In its place will be decentralised arrangements based on partnership, quality and efficiency to put doctors and nurses in the lead in shaping local services."

BBC Health Correspondent Niall Dickson assessed health proposals in the Queen's Speech

Ministers claim the new arrangements will end the unfairness of the fundholding system, under which individual GP practices had control of their own budgets for drugs and hospital care. Critics claimed the scheme led to a two-tier service with fundholders' patients getting preferential treatment from the NHS.

The new system is designed to ensure that patients receive treatment according to need, not according to where they live.

Although GPs will be in control of local health budgets, they will have to consult other health workers and representatives of the public before deciding how the cash is spent.

To ensure that all parts of the NHS co-operate with each other, the government will introduce a statutory duty of partnership.

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The Bill will also establish a Commission for Health Improvement to monitor the new arrangements and to ensure high quality standards are maintained across the country.

The commission will undertake a rolling programme of visits to local NHS organisations, and will be able to intervene where there are specific clinical problems.

Ministers hope the commission will be able to root out incompetent doctors, and ensure no repetition of cases such as the Bristol heart babies tragedy.

They also plan measures to overhaul the systems of professional self regulation of health professionals to ensure they are open, responsive and publicly accountable.

The Bill will also contain powers to ensure that drug companies comply with the Pharmaceutical Price Regulation Scheme. The PPRS is negotiated between the government and the drugs industry, and sets a limit on the profits which pharmaceutical firms can make on their products.

Conservative leader William Hague said the NHS Bill would destroy the gains made by GP fundholding.

He said: "It will take power away from GPs and give it to unaccountable and bureaucratic primary care groups and it will take money away from patients to spend on more management."

Mr Hague quoted from a letter he had received from a GP which said the reforms would "seriously undermine the quality of care available to patients".

He also quoted from a circular from Bradford Hospitals NHS Trust which said patients on waiting lists for certain operations should not be included on monthly returns, but transferred to a separately held list for patients who went on the list prior to 1 June.

"We have already got waiting lists for waiting lists, we have got subsidiary waiting lists, we have got concealed waiting lists," he said.

Similar legislation to scrap fundholding and create primary care trusts is being introduced in Scotland.