The components of x include population characteristics ( such as morbidity)
and characteristics of the authority, such as its area and transport facilities. We assume that the numbers of primary care professionals (GPs, dentists, opticians,etc.) to be serviced by the authority are also exogenous and that the more
professionals, the greater the administrative services required in connection with payments, budget setting and monitoring. We also assume that the number of fundholding GPs is exogenous as far as the managers of FHSAs are concerned.