A new look at Medicine and Politics 3

J Enoch Powell 1966

3. Financing the Health Service

The unnerving discovery every Minister of Health makes at or near the outset of his term of office is that the only subject he is ever destined to discuss with the medical profession is money.

Cynically, but unjustly, he may be tempted to assume that this is because money is the only thing the medical profession cares about. It is not so. What has happened is that the nationalised service makes money the sole terminology of intercourse between profession and government. If, for instance, legal advice and representation were nationalised on principles similar to those of medical care, the lawyers would no doubt be found on the same terms with the administration.

I was recently invited to visit the laboratory of a non-commercial institution with its own endowments which is not in receipt of any government subvention. It was cramped and crowded, and from repeated and bitter experience at the Ministry of Health I instinctively expected to be assailed before crossing the threshold with complaints of inadequacy and of underpayment of staff. (‘How can people be expected to work in conditions like these?’ ‘How can we recruit staff on the rates we are allowed to offer?’) To my bewilderment, the chemist in charge proceeded to demonstrate with pride and pleasure a series of devices by which he had contrived to get a quart out of a pint pot, and appeared highly satisfied with the opportunities his position afforded to him and his assistants. I could not help reflecting sadly how soon all this would change if the Exchequer ever took responsibility for maintaining or even assisting the work.

From the point of view of its recipients, Exchequer money is for all practical purposes unlimited. The consequences elsewhere of an increase in a particular expenditure are infinitely remote and unascertainable, and no sense of responsibility for justifying even the present level of expenditure is felt by those concerned. The natural limitations on any expenditure— that it is in competition with all other objects of expenditure— are transformed for those using or operating an Exchequer-financed service into the arbitrary and unreasonable decisions of identifiable politicians.

It does not occur to those in other professions— solicitors, or architects, photographers, artists or veterinary surgeons— to suppose that the demand for their services, or their facilities for furnishing them, can be increased at will. They realise instinctively that this demand is fixed by an infinitely complex balance of choices which the whole community is making in laying out its current effort. In contrast, from the point of view of those providing or using the National Health Service, the quantity of service demanded and provided is what it is, and no more, for a perfectly simple, human reason: that the present government and its predecessors— more usually, the present Minister of Health as an individual and his predecessors— have decided not to spend more on it. All discontents, all deficiencies, all inadequacies can be externalised and rationalised by a single, anthropomorphic explanation: it is all the fault of a miserly Minister, or Treasury, or Cabinet.

The explanation is the more readily accepted for being in a literal, limited sense, true. If the government had decided to spend much more on doctors, nurses, medical auxiliaries, hospitals, in preference to everything and anything else, then, of course, more doctors, nurses, medical auxiliaries, hospitals and the rest there would be. Thus, every question, every need, every demand, is politicised— and in a financial form. ‘Give us more money’ becomes the refrain of the professions, and this not out of turpitude. On the contrary, if an improvement or expansion of the service with which one is professionally concerned depends on the government spending more upon it, then it becomes a positive ethical duty to besiege and bombard the government, and force or shame them into providing more money, and then more again.


In these circumstances it is not mendicancy but contentment that would be the crime. Anyone in the National Health Service below the Minister, from the chairman of a hospital board to a nursing auxiliary, who professed himself satisfied with what was being spent could not unreasonably be represented as a traitor to his colleagues, his profession and his patients— on the basis, namely, that more money means improvement, and that complaint and dissatisfaction are essential to extracting more money. However, instances of such treasonable conduct are rare indeed. One of the most striking features of the National Health Service is the continual, deafening chorus of complaint which rises day and night from every part of it, a chorus only interrupted when someone suggests that a different system altogether might be preferable, which would involve the money coming from some less (literally) palpable source. The universal Exchequer financing of the service endows everyone providing as well as using it with a vested interest in denigrating it, so that it presents what must be the unique spectacle of an undertaking that is run down by everyone engaged in it.

The contrast that meets the observer as soon as he passes outside the realm of Exchequer finance, even to enter the local authority health and welfare services, is striking. The Minister of Health on tour, when he quits his own premises and meets the local medical officers of health and chairmen of committees, is surprised and delighted by the change of climate. They do not run their services down; they praise them, and though they recognise deficiencies and objectives still far from being attained, they recognise them as stimuli and incentives, not as material for moaning. True, central government decisions make an impact on local administration: they limit capital expenditure, they provide only thus and thus much by way of grants, and they influence levels of remuneration, and consequently recruitment, of staff. But however acrimonious the complaints to which the occasional impact of these decisions gives rise, they do not alter the prevailing atmosphere— surely a normal one in any undertaking— of people ‘happy in their work’ and desirous that it be well thought of.

The contrast is as striking as the reasons for it are instructive. The main one is simply that those providing the services are conscious in quite a different way of the consequences of increasing expenditure. The councillors have to face the increase in rates; and in local government, unlike central government, the administration and the representative assembly are one and the same thing. Since they finance the existing services, the councillors are anxious to claim that the ratepayers are getting good value for their expenditure. They see political advantage in praising the work of their hands, so that the electorate may look, and see that it is good.


In my period of office at the Ministry of Health two plans emanated from it, one for the hospital service, the other for the local health and welfare services. Without a word of detraction from the loyalty and keenness of the hospital boards and committees, the advocacy of the former plan rested on the shoulders of the Minister; like ‘Athanasius against the world’, it fell to him alone to explain not only ‘what the government was doing’ but ‘why the government was not doing more’. The plan for the health and welfare services, on the other hand, probably in the long run the more important and certainly the more original of the two, was commended to the public not from a single point, but from 145 centres all over the country, where officials and councillors needed no encouraging to be public relations officers for what they and the Minister jointly aimed to achieve.

But the contrast between the nationalised and the local health services is not explained solely by the fact that the local elected representatives share the responsibility. It extends far beyond the politicians and goes right through all who provide and use the services. One does not find the professions in the local health services embattled against local government as the professions in the National Health Service are embattled against the central government. Whatever private reservations a medical officer of health here, or a chief welfare officer there, may have about the quality or even the intentions of his employers, his loyalties are on the side of his service and not anywhere else. This applies to the employees generally, down to clinic attendants or assistant wardens of hostels, whether the conditions are modern or make­shift, whether inadequacies are being removed slowly or rapidly. The attitude of the staff goes a long way to determine the attitude of the public, who sense whether the atmosphere is one of denigration of the providing authority or one of approval and goodwill.

Undoubtedly the mere fact that the services are local, even though provided with public money, much of it Exchequer money, is a potent force. People like to claim that what is done by their own locality compares favourably with what other towns and counties can do. No one rejoices in saying: ‘You know, our town provides perfectly lousy services for the blind and the handicapped,’ whereas everyone enjoys telling strangers: ‘We have a lousy postal service in X; it must be the worst in the country.’ The local patriotism that claims that provides the best when it has the opportunity, denounces the central government for neglecting when the job is the central government’s. The identical voluntary, or even municipal, hospital which would be a pride and credit to if it were not nationalised, is a disgrace and a scandal because it is a national responsibility— redeemed only by the skill and devotion of the (local) staff battling against the appalling adverse conditions imposed by the (national) service. To use the jargon, in one case people feel ‘involved’ and therefore responsible, in the other they do not. This factor is not absent from the controversy over the replacement of small local and cottage hospitals by the provision of larger new hospitals. As soon as a hospital, even within the National Health Service, is seen as ‘our hospital’ by a local community,  its imperfections and shortcomings become invisible, and even the most deplorable relics are affectionately extolled above better and safer conditions in hospitals elsewhere, which would not be ‘ours’.

Even simple contiguity has its effect. It is easy to keep up relentless hostility towards a distant abstraction, like a minister or a ministry, of which the image as a malevolent or irrational being can be maintained unimpaired by any contact with the reality. When the people who take the decisions live in your own town and can be seen and talked to, it is more difficult to idealise them as ogres ex officio. Through the eyes of a fellow human being the limitations of existence are seen in a rational light, as affecting him equally with oneself, and being largely external and ‘given’ by the nature of things.

This contrast between the professions in the national and the local health services may help to explain why the antagonism of the teaching profession towards their service is on quite a different plane from that of the professions in the National Health Service. Money for teachers’ salaries and money (loan sanctions) for school building have been shown in recent years to be in the control of the central government. Upon these, therefore, pressure both from inside the service and from without has concentrated. There has been great bitterness over government intervention in the revision of salary scales; and the condition of older existing schools, more perhaps than the size of classes or the rate of building of new schools, has attracted widespread public criticism. But both profession and public have been able to keep these aspects, seen as specifically financial, apart from their attitude to the service as a whole, and energy and interest have preponderantly been directed to the content and organisa­tion of education. A politician coming to education from the National Health Service is at first quite startled that the spokesmen of the teaching profession do not want to talk to him first, last, and always about money. The administration of the schools and the employment of the teaching profession not by the Minister of Education but by the local education authorities is not a fiction but an important reality. Comparison with the National Health Service suggests that it would be worth a good deal not to lose genuine local administration of school education.


A corollary and concomitant of the assumption in an Exchequer-financed service that improvement and progress depend on the Exchequer providing more money is the tendency to neglect or depreciate other sources of betterment. In fact, the diversion of proportionately more effort and resources to an activity is rarely observed to have been a cause of improvement in standards or efficiency, though it has not infrequently been a result. The necessity which is proverbially the mother of invention is least fecund when she is presented in the guise of H.M. Treasury. In every inadequacy the obligation of the government to provide is a continuous alibi: one does not have to do something about it oneself if it is the business of the Minister and the Chancellor to put it right.

The so-called shortage of nurses is an extreme case in point. In fact, the quantity and quality of hospital nursing staff in the National Health Service has been steadily, and indeed rapidly, on the increase during almost the whole of the last decade and a half. So has the number of patients which that staff has attended, so far as that statistic, or indeed any other, can be invoked as a measure of ‘output’ in this context. If this situation had obtained in any activity not supported by the Chancellor of the Exchequer, it would have been regarded as highly satisfactory, and the emphasis would have been laid on obtaining still greater results by further improved organisation and techniques.

The fact, however, that still greater expenditure of public money would undoubtedly result in a still faster increase of nursing staff constantly diverts the attention of professionaland administrative management from its own proper function, that of maximising the return from a given quantity of effort. This was what I meant when, in an aside that acquired some notoriety, I enquired: ‘Matron, how could we possibly get on without a shortage of nurses?’ It was also what a well-known geriatrician meant when he said, with deliberate exaggeration: ‘If short of nurses, close beds; if still short, close more beds!’ As long as a problem can be evaded by being attributed to someone else’s remediable neglect it is unlikely to be vigorously tackled. I used frequently to be appalled by the ossification of thought which contemplation of unfilled theoretical ‘establishments’ of nursing staff could induce in otherwise vigorous and go-ahead people. ‘Of course as you know (this with a meaningful smirk), we are short of nurses here.’

Financing of a service by public, and especially Exchequer, money converts every limit upon demand into an arbitrary and perverse or even malevolent decision imposed by conscious authority. But there is one specially personal and irritant way in which it is calculated to produce friction between those professionally employed in a service and the politicians.

In a publicly financed service, remuneration of the employee is seen as an arbitrary valuation placed upon people and their work by a political authority. It occurs to no one that the employer who consults the advertisements to ascertain what he will have to pay for a good shorthand-typist is placing an arbitrary value on her services. He is powerless, as she is powerless, to alter the figure appreciably one way or the other. The employer and the typist therefore bear one another no animosity on that account. But the moment the employer or the paymaster is the Exchequer, it is assumed that he has the power to pay more at will, and so what is actually paid or offered is treated as a deliberate valuation of the employee by the employer and resented  accordingly.  Doctors, nurses,  physiotherapists,  and members of the public exercised on their behalf, will go into paroxysms of indignation that the Minister of Health ‘thinks them worth no more than’ whatever the sum or comparison quoted may be.


This is a misapprehension. Let us suppose that at a given rate of remuneration, r, the Minister of Health is able to retain a given constant quantity of nursing staff in the hospital service. He has no power whatever to determine r. It is a figure over which he has no control. True, he can (the Treasury being willing) increase the rate of remuneration he offers to R, just as (on the same assumption) the government can decide to increase expenditure on the service generally or any other particular element of it. But see what then happens. Ex hypothesi more recruits will then present themselves: this must be so, because nursing is now more attractive, relative to other occupations, than it was before. One or both of two things must therefore happen. Either larger numbers must be recruited— in which case the decision to raise the rate of  remuneration was effectively a decision to increase the quantity employed to Q —or else, if the same number as before is recruited, some method of selecting the successful applicants must be adopted, which presumably must be to raise the qualifications. In this case the decision to raise the rate of remuneration was effectively a decision to increase the quality employed. The increased remuneration must thus result in an increase in numbers, or in minimum qualifications, or in a combination of both. The Minister and the government have therefore decided to employ more or better qualified nurses or both, as they might have decided to purchase a larger or better supply of other requisites for the National Health Service. What they have not done is to decide how much that increase in numbers or quality will cost them. They can no more influence that than the original value of r. In short, they have not been putting a value on a nurse.

This, however, is just what they are popularly supposed to have done. They are spoken of as having ‘given the nurses per cent more’, and this is taken to be what the government suppose a nurse to be ‘worth’, which provides a satisfying text for tirades by the emotional who think that all the nurses are pretty young creatures, kind and nubile, and would be shocked to know how many are males in mental hospitals.

The impression that the price is an arbitrary one within the control of government is strengthened by the fact that rates of remuneration paid out of public money are commonly uniform throughout the country, though the market value of a certain quantity and quality of service can notoriously vary quite widely from one place or region to another. This makes it appear that the public authority has the power to determine remuneration irrespective of supply and demand. This is not so. The fact is that the uniform rate secures a varying quantity or quality or both in different places and circumstances, and  the  public authority is powerless to do anything about that except by finding means— such as ‘London weightings’, etc.— to modify the uniformity.

Thus, the decision, rendered political by the fact of public financing, to provide thus and thus much service presentsitself to the profession as a personal and arbitrary decision of identifiable individuals. ‘This,’ say the doctors— for the same reasoning applies to all employed in the National Health Service as to the nurses —’this is what you consider we are worth.’

The resentment at being apparently arbitrarily priced is confirmed and strengthened in professions in public employment by two psychological causes. The professional man in public employment is not conscious of being in a market situation. Whereas the architect, or the veterinary surgeon, or the solicitor has to go out to get and keep ‘business’, and thus realises without effort that it is the market in which he is competing that is putting a comparative price upon his services as upon everything else, the teacher or doctor in public employment feels that he is not in a competitive situation: the fact of their being employed does not evidently result from the public choosing, for the time being, to purchase their services in preference to other ways in which it might lay out its money. On the contrary, they naturally regard their employment as part of the fabric of society (‘You have to have teachers, don’t you?’ ‘You have to have doctors, don’t you ?’) and take a certain satisfaction from thinking that their professions lie in a different sphere altogether from that of commercial competition.

This is why there is so much prating about ‘vocation’ and ‘self-sacrifice’, when professional people are publicly employed. -‘By underpaying us,’ is the cry, ‘you are exploiting the sense of  vocation which obliges us nevertheless to continue to devote our- . selves to the care of our suffering patients.’ The surest method  of rendering this complainant purple with fury is to point out that ‘doing what one wants to do’— a less high-faluting equivalent for ‘vocation’— is itself a form of remuneration, and that his demand therefore is to be paid twice over, in satisfaction and in money. More kindly, however, and more persuasive is the observation that complaints of exploited vocation are confined to publicly financed services; you do not hear artists (except in state employment), or clergymen, or monks, or missionaries, or actors, or poets, or novelists complaining that their sense of vocation is being exploited. Nor did the doctors or the nurses or the dentists do so before the Exchequer became their pay­master.


Another cause that fosters the illusion that pay in a public  service is an arbitrary and conscious value-judgement is the use of comparison with other professions in discussing remuneration in the public service. The Pilkington Commission of 1958-60 on doctors’ remuneration went into elaborate comparisons with career earnings in other professions, much as the Priestley Report of 1955 on civil service pay gave rise to elaborate investigations by the Pay Research Unit into pay in supposedly comparable employments. The implication is that the basis of comparison is some sort of intrinsic worth or value or status. In reality, all this comparison is ‘vanity and vexation of spirit’. If the state wants a given number of employees of a given quality and qualifications, it must pay that remuneration, no less and no more, which will secure them. What that remuneration is at any time can only be determined experimentally: there is no necessary, inherent relationship between the remuneration of a consultant, a veterinary surgeon and a bull­dozer-operator.

It is perfectly true that the relationship between remuneration offered and numbers and quality obtained is more complex where, as with the medical profession, the period of training is specially lengthy and where therefore the supply can adjust itself to a change in demand only after a more or less substantial interval of time. However, this rigidity can easily be exaggerated in a society where individuals still have freedom to choose and change their occupations and to move from place to place and country to country. There is a fairly direct and sensitive relationship between the remuneration and satisfaction of the higher ranks of a profession and the flow of recruits coming forward to be trained in it. This is the safeguard of the senior members of a profession against the possibility that their own personal inability or unwillingness to jettison the skills and occupation of a lifetime might be exploited by the employer. There is a continuum which links their remuneration with that offered to the prospective raw recruit, and the relationship between the two is one over which the employer has little or no power. Conversely, it ensures that an increase in the demand for the services of the most skilled and experienced is signalled through in terms that affect future recruitment.

In medicine, the time-lag is felt so much because of rigidities introduced at each end of the process by state provision. The state influences (through the University Grants Committee) the number of recruits by determining the number and type of university places. The state also decides, initially in quantitative terms, the demand it will make for (say) hospital consultants. If the remuneration of consultants rose in the market with an increase in demand for their services, and if the number of medical students were always equal to the number (possessing constant qualifications) desirous of studying medicine, the correlation between demand and supply would be much smoother and more continuous than it is. At present, the arbitrary and essentially discontinuous nature of state decision slows down the process and makes it jerky. This does not mean, however, that the state is any less under the necessity of attempting to ascertain by trial and error the remuneration, unknowable a priori, that will enable it to meet the demand which at any time it sets out to satisfy.

There is yet another reason for the popular misconception that remuneration in a public service is a judgement of inherent value and not a market price. This is the notion that the services provided— education, medical attention, nursing and so on— are ‘good things’ and that, therefore, as one notoriously ‘cannot have too much of a good thing’, the decision on remuneration is somehow a moral one, as though the government were thereby deciding that an intrinsically good thing is not really such a good thing after all. But this is part of a larger issue.