The Dynamics of Public Policy

The Dynamics of Public Policy

Theory and Evidence

New Horizons in Public Policy series

Adrian Kay

In The Dynamics of Public Policy, Adrian Kay sets out the crucial methodological, theoretical and empirical implications of two important trends in the social sciences: a frequently expressed ambition for analysis of ‘movies not stills’ and the regular observation that policy, politics and governance is becoming more complex.

Chapter 8: The GP Fundholding Scheme

Adrian Kay

Subjects: politics and public policy, public policy


The Conservative government in the UK introduced a range of reforms in April 1991 to address a number of perceived weaknesses in the National Health Service (NHS) management structure; in particular, an allocation of resources that had been ‘… determined largely by the sum of the individualistic behaviour of individual doctors rather than through a hierarchical process of resource management’ (Wistow 1992, p. 59). The government attempted to compensate for the lack of ‘correct’ economic signals by introducing new incentive structures designed to encourage provider units and NHS staff to meet the ‘limitless demand’ for state-funded health care within a cash-limited, public budget (Thatcher 1993, p. 606). To this end the government introduced an ‘internal market’ for NHS services, which separated the purchasing and provision of health care interventions and allowed general practitioners (GPs) to elect to hold a cash-limited budget for the purchase of a limited range of secondary care, staffing and pharmaceutical services. This chapter examines the conception, implementation and abolition of the GP fundholding scheme element of these reforms as an example of policy dynamics after the breakdown of a long-established policy community. This exemplifies a more general trend in the 1990s across several OECD countries of the break up of well-developed policy networks dominated by industrial actors, professional elites and bureaucrats, ushering in periods of instability in policy areas such as transport, agriculture, food safety and nuclear power. Health care policymaking between 1948 and the mid-1980s was a worked example of a policy community according to the...

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