Total purchasing is potentially the most significant development in NHS purchasing of health services since the introduction of general practitioner fundholding in 1991. It offers fundholding practices the opportunity to purchase all of the health care not included in fundholding for patients on their lists. The study of 53 total purchasing projects (TPPs), which went 'live' in April 1996, found that setting budgets was one of the most serious problems they faced in their preparatory period. This report reviews these problems and suggests how they might be resolved through new kinds of analysis. This offers lessons for developing locality purchasing in the NHS.