The expansion of GP fundholding (GPFH) is central to the British government's attempt to maintain the revolution under way in the National Health Service (NHS). Evaluations of the NHS reforms have portrayed GPFH as an important mechanism for competition, and GPFH's bargaining power is reported to have secured significant changes in health service provision. However, these developments have been acknowledged to be less applicable in relation to community health services (CHS) than acute hospital services. On the basis of case studies of the process of contracting for CHS, GPFHs are shown to display ambivalent and sometimes contradictory views which have to be related to broader policy developments in general practice and primary care. Although this paper focuses on the British situation, many of the issues raised by reforms in primary and community health services have implications for developments in other Western health care systems.