This paper draws on the findings of three studies of the management costs of total purchasing (National Management Functions and Costs Study, and two studies undertaken as part of the National Evaluation of the Total Purchasing Pilots), to shed some light on the management costs of Primary care Groups (PCGs). It aims to discover what the most appropriate and effective distribution of functions and deployment of management resources to enable the new roles of health authorities (HAs) and PCGs to be developed and fulfilled. To do this, the paper: defines how management costs are deployed within the current pattern of primary care commissioning; sets out some of the factors and issues relevant to setting up PCGs and their related management costs; and considers how management costs might be deployed in the future within the HA management cost envelope.