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Indicative budgets

Practical Commissioning's Jargon Buster explains the meaning of the term 'Indicative budgets'.

Since April 2005, practices have been able to receive an indicative budget that they can use to commission hospital and community services.

The indicative budget will include secondary care services covered by the national tariff (elective, non-elective, outpatients) and primary care prescribing activity. PCTs remain legally responsible for: managing finances; negotiating and managing all provider contracts; the overall commissioning strategy; and the implementation of PBC. What is important to grasp is that practices are managing this indicative budget – accountability still rests with the PCT.

Practice-based commissioners must understand the figures they are presented with – this budget allocation is the amount of ‘cash' they will have influence over. They also need to be aware of how the fair shares policy applies to their practice.