Congratulations to the new Health Secretary Andrew Lansley, for what could be the biggest revolution in the UK's state-run National Health Service for 60 years. Mirroring what Michael Gove is doing for schools as Education Secretary – short-circuiting the bureaucracy and instead letting school boards decide how their money should be spent – Lansley has bravely revived the idea of giving the lion's share of the funding to family doctors (GPs) to spend on their patients as they deem fit. It's the next best thing to giving it to the patients themselves.

We knew that the Conservatives favoured GP budget-holding: at one stage, their leader David Cameron made no bones about it. He and many of his colleagues were convinced that family doctors could spend the budget far better than officials in the Department of Health, or the local Health Authorities, or the bureaucratic Primary Care Trusts that were set up under the last administration. But then everything went quiet, and we feared that Cameron's crew were going to baulk at serious healthcare reform, reckoning that shaking up education was a big enough job for any incoming government.

But there were signs that reform might happen in the coalition agreement between the Conservatives and their government partners the Liberal Democrats. The agreement vowed to end the top-down management of the NHS and give more responsibility to GPs. Now that has happened.

Why is this change so important? Because it means that decisions are made by patients and their family doctors, rather than well-meaning but distant bureaucrats who do not know the individual and local circumstances. And it is the first step towards making the NHS the funder, but no longer the provider, of healthcare. After all, GPs can decide to use their budget to send patients to non-state providers if they choose. And if instead they select state-run hospitals, it puts a competitive pressure on those facilities: instead of being able to rely on guaranteed funding coming down to them from the central authorities, they will have to win GPs' custom by providing the best possible value for money. And that, surely, is what we want from a healthcare system, whether it is taxpayer-funded or not.