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Introduction Previous analyses suggest that over the first 3 years of the national Quality and Outcomes Framework (QOF) quality of care has improved and inequalities in diabetes care between practices have significantly reduced. In this study, we have reviewed the literature and undertook an exploratory analysis of the first 5-year QOF data with practices ranked by deprivation tertiles to assess the impact of QOF on the quality of diabetes care and health care inequalities. Objectives To use data from QOF to assess whether the quality of diabetes care has continued to improve between its introduction in 2004/2005 and 2008/2009, whether the gap between practices in the most deprived and the least deprived tertiles has closed, and whether the national patterns are also seen in a city with significant geographical inequalities. Design Exploratory analysis of the QOF data from 2004/2005 to 2008/2009. Participants All general practices in England and practices in the city of Sheffield. Main Outcome Measure Trends in the process and outcome measures of diabetes care and in the gap between the most deprived and the least deprived tertiles. Results In England the mean proportions of patients with HbA1c, blood pressure (BP) and cholesterol reviewed and the mean proportions of those achieving outcome targets for HbA1c (7.5%), BP (145/85) and cholesterol (5 mmol/l) were noted to be higher than the QOF upper thresholds of 90% and 60% for the process and outcome indicators, respectively, and these increased over time with most practices levelling off by 2008/2009. A comparison of these increasing trends between practices in the most deprived and least deprived areas revealed that the gap that was significantly wide in 2004/2005 had narrowed over the years and appeared to have disappeared by 2008/2009. For Sheffield, a city with significant geographical inequalities, although the mean proportions achieving the outcome targets were generally above the QOF upper threshold of 60%, these tended to fluctuate between practices in the most deprived and least deprived areas—without consistent narrowing of the gap for all indicators. Conclusion Overall there was narrowing of the inequality gap and improvements in the quality of diabetes care for Sheffield and England as a whole with most of the improvements levelling off by the year 2008/2009. However, for some of the indicators there were differences between Sheffield and England as a whole. [ABSTRACT FROM AUTHOR]