Continuities and changes in policy concerning the organisational structure of the British National Health Service are evident throughout the last decade. This paper presents lessons learned from the internal market experience and discusses the extent to which New Labour policies have taken these into account. The role of decentralised contracts and central government direction in each system is explored. The internal market was less decentralised than expected, and direction from central government continued to be a key element. In the post internal market system, less faith has been placed in the capacity of contracts to improve quality of care, and centralised direction to set and enforce standards has increased. But simultaneously the mechanism of contracting has been retained and it is likely to be extended in increased dealings with the private sector. Efforts are also being made to curtail the high degree of centralisation in the early post internal market years.