The implications of the 1997 NHS (Primary Care) Act have been largely overl
ooked in the rush to establish Primary Care Groups. Allowing health authori
ties to develop local contracts for primary care has far-reaching implicati
ons and is an important departure from the national system of negotiation t
hat has characterized general practice to date. This paper describes a cont
ent analysis of a sample of Personal Medical Services (PMS) pilot contracts
. In the first year little attention has been given to achieving cost savin
gs or greater efficiency and few contracts promote clinical guidelines. The
difficulties of specifying services sensitive to local health needs are hi
ghlighted and the national Statement of Fees and Allowances (the 'Red Book'
) may not be swiftly supplanted. However, the pilots have introduced innova
tions such as salaried general practitioners, nurse-led services and NHS tr
ust-managed care. The development of local contracts provides a valuable le
arning experience for general practitioners and health authorities in advan
ce of the establishment of Primary Care Trusts.