David Worskett, director of the NHS Partners Network, said:

"Providers who have worked immensely hard to integrate with and support the NHS are disappointed at the Government's failure to recognise this or provide wholehearted commitment to the independent sector for the future.

"The independent sector continues to believe that the NHS needs more innovation, diversity and robust, fair competition if it is to meet the challenges it faces, including achieving better integration, which we strongly support and which can be strengthened by a competitive market.

"While we welcome the retention of the Cooperation and Competition Panel within Monitor, the overall dilution of Monitor's role and the return to more centralized control and direction via the National Commissioning Board are unwelcome. The commitment to patient choice rings hollow when there is so little real encouragement of diversity or providers to make it meaningful. Overall, the process of reforming the provider side of the NHS so that it better meets patients' needs has been set back by several years.

"Independent sector providers will remain committed to helping the NHS meet the challenges it faces but will need much greater clarity from the new institutions before investors regain the confidence which has been badly damaged. What matters now is getting on with the job of looking after patients - putting their interests first, not organizations, structures or politics."