From Market Chaos To Common Sense

The papers in this report were presented at a conference held in London in June 1993. They examine the effects of changes in the NHS and explore options for future policies for health. This report was published jointly by Medical World, magazine of the Medical Practitioners Union, and the Socialist Health Association. Steve Iliffe, Joy Mostyn and Rosemary Ross edited the conference papers.


  • Andrew Wall, Senior Fellow, Health Services Management Centre, University of Birmingham
  • Ros Levenson, Director, Greater London Association of Community Health Councils
  • David Blunkett MP, Shadow Secretary of State for Health
  • Peter Westland, Under Secretary in Social Services, Association of Metropolitan Authorities
  • Paul Marks, Deputy Head of Health, UNISON
  • Terry Davis MP, member of the House of Commons Committee of Public Accounts, Vice-President of the Socialist Health Association


Given the unforgiving nature of the Tories, it is not unreasonable to point out to them that as you sow so you shall reap. The so-called reforms of the health service will, in my view, turn out to be more of a mistake to Tory supporters than their critics. But to be fair, it is a well recognised fact that policies conceived to achieve one purpose turn out to defeat it. Even on our side, the Secretary of State for Health in the mid seventies, Barbara Castle, in her effort to contain private practice, in fact promoted it.

It is not surprising that the Government now finds itself in difficulties with its changes to the NHS. If the diagnosis is wrong, so will be the treatment. What exactly stimulated Mrs Thatcher’s secret enquiry late in 1987? After all, she had just won a third term and, for her, everything in the political garden should have been roses. But as has happened before for government of any species, the worm in the bud showed signs of growing into a serpent. Of course the NHS was short of money. Where in the world is there a health care system which could not do more with more? Expectations were, and are, rising with increased knowledge. Her mistake, when Working for Patients eventually came out in January 1989, was to apply the politics of reorganisation to the wrong part of the body.

You would think that someone would have learnt by then that rearranging the process does not cure more fundamental problems. No one would have disagreed at that time, or indeed now, that the NHS could be better managed. But that is true of any organisation you could mention in the public or private sector. The assumption however that there is one right way to run the NHS is foolish and, in view of the costs of change, foolhardy.

False premises for reform

The benefits of the purchaser-provider split, now seemingly the gospel of public services in the western world, are by no means self evident. Organisations need to have the capacity to learn if they are to be flexible and to adapt to circumstances. At a very fundamental level of work, anyone at any level of the hierarchy will have ideas about how their job could be done differently and better. The purchaser-provider split introduces something inherently unnatural because there is a forced division between those who do the job and those who plan the job. Wasn’t that the problem in the seventies? The Area Health Authorities (AHA) planned health care and promoted health but failed to realise that without most of the resources which were managed by the District Management Teams (DMT), they could do little. The problem was that those DMTs also wanted to plan the future and their plans often did not coincide with those of the AHA. Furthermore, the DMTs had more incentive to make changes as they had the people and the money to do so. In eight short years, AHAs were overthrown on the simple but persuasive principle that people and organisations are motivated by the prospect of being able to have a significant say in their futures. Rob them of that and they become lacklustre, unimaginative, and in the end obstructive – if only to attempt to recover some sense of power.

The first mistake of Working for Patients was to ignore these obvious truths of how people behave. The next mistake was to apply false analogies. The Market – and I use the term as a metaphor – clearly has limitations even to its believers. Hence the conditioning description “internal”. The premise is that the Market drives down prices and drives up efficiency. The problem is that this premise is, to say the least, highly debatable. Indeed the reverse can easily be demonstrated. Prices may well be increased to cover risk; efficiency is scarcely enhanced by competition where choice can only operate if there is over-provision. The inappropriateness of this in our cash-strapped NHS is obvious. But the metaphor of the market carries its own association with shopping bags – as though promoting health and providing health care was just another visit to a supermarket. As Andrew Massey has recently pointed out in his excellent book, Managing the Public Sector, people are citizens first and consumers a poor second. Choice of course has considerable rhetorical power and the Labour Party needs to be wary of it. My choice may be your non-choice. If we believe in social justice, espousing the concept of choice could be subversive.

So what should the next Labour Government do? Clearly and sensibly, there is no going back to where we were on the principle that, as the Greek philosopher Heraclitus said, you cannot step into the same river twice. Too much has happened to revert to 1988 and before.

Streamlined centralisation

The first task is to simplify the organisation in order to cut out some of the management costs. The irony for the Tories is that they have increased the bureaucracy and the centralisation of the NHS, against their own stated ideology. A Socialist government must expect that some degree of centralisation must continue if positive changes are to be achieved and there is no point in being squeamish about saying that. But the centre needs clearing out. The Augean stables have scarcely any room for cattle at the moment The Department of Health is engaged in an internal struggle for power which takes up too much time. The DoH needs to clarify its purposes, which are to support its Minister, to devise national policies, to plan for the implementation of those policies and to monitor change. With that agenda they do not need the numbers now in post nor does the continuation of the NHSME in Leeds serve any useful purpose other than to increase the revenue of British Rail through the 140 return London to Leeds fares incurred by so many each week trying to bridge the chasm between Richmond and Quarry Houses.

Whatever the Jenkins/Langlands report says later in 1993, the Labour way forward should be to make the regions and the outpost one organisation, arguably smaller in number. These offices should be seen unequivocally as regional offices of the DoH and as such they would not need to be corporate boards with chairs and non-executives. Who are their constituents anyway?

Once the centre has been streamlined (and only undertaken with proper regard for those being made redundant) then the NHS can be based on properly accountable boards serving local communities. These new commissioning authorities would merge the FHSAs and DHAs thus removing the quite unnecessary aggravations caused by the faintheartedness of the Secretary of State to remedy this obvious dysfunctionality. They would act as agents and brokers. Agents on behalf of the population and in particular the GPs looking after that population, and brokers of the various interests which must be acknowledged and as far as possible, honoured. Central policy has to be implemented, but there also has to be respect paid to the wishes of local communities. These wishes in turn need to be mediated by the professional opinions of public health specialists, directors of social services and the whole range of professional people society has trained to be experts on our behalf.

Working with GPs will aim to cut down some of the transaction costs inevitable in the contracting system. As the second stage of Labour’s plan, there needs to be an assessment as to whether contracting is worth the cost. It is difficult to go back now, but equally the increasing detail and proliferation of the contact process does not necessarily lead to better standards or increased value for money.

A New Hospital Plan

Missing from the NHS at the moment is the ability to handle more than one macro-strategy at a time. Care in the Community is estimable in principle if not in practice, but that should not exclude the need to make sense of the development of our hospitals into the next century. Leaving the market to sort this out is a guarantee for waste and conflict. A new hospital plan to take an overall view, like its predecessor in 1962, would do much to convince the long-suffering public that managing health care is not about closing down your favourite health care institution.

Socialists cannot ignore the issue of restoring some sense of democracy to the NHS. Unfortunately mangers’ experience of local democratic processes is reserved to difficult meetings with social services departments and shrill manifestations of public opinion, or at least that sector of the public who take the trouble to protest This has conditioned them largely to avoid the consideration of a transfer back into local authority control. But as this year’s President of the Institute of Health Services Management, David Knowles, has cogently pointed out, with the separation of purchasing from providing (and I have to accept that this split is likely to continue) and once social services departments get into this mode, the old political objection to local authority responsibility, based as it is on a prejudice by government that local authorities cannot be trusted to run anything, is removed. A less radical alternative (at least for the Tories), and an improvement on the present rash of quangos, would be to set up local Social and Health Authorities with an elected membership. Whatever the system, the present ambiguity of executives working as both officers and members of DHAs or Trusts would have to be removed by returning to the previous system where officers serve their Authority. There is no reason why this arrangement should lead to poorer management.

A less confusing stance on accountability must be crucial. In my view, it is not necessary to have a hierarchy through a chain of command to Parliament to ensure accountability. Rules alone do not guarantee probity as we have seen so painfully in the NHS recently. The ultimate discipline is personal. We then do the right thing, because we cannot conceive of doing anything else. The safeguard is that we would be willing in all circumstances to demonstrate to outsiders that we were doing the right thing, that is to everyone else from auditors to citizens. Ethics, once seen as an irrelevance for managers in the NHS, is edging its way up the personal development agenda.

An enabling role for organisation

Finally, we will still be faced with problems whatever organisation we land up with. Paradox cannot be avoided. The process of politicisation in order to further the common will has to be set against individual rights. It is the challenge of central direction against charterism. In organisational terms, is it better to have a centrally controlled, directly managed system. This allows more pluralist approaches. The present Conservative Government has not yet realised that decentralisation leads to a need for regulation which in turn may be less flexible and more bureaucratic than the more directly managed organisation which preceded it.

The rhetoric of health afflicts all politicians and a great many managers. Is it health or is it health care? When we talk health are we really talking sickness? There is a danger (particularly, dare I say it, in the SHA) that health promotion is seen as more important than looking after the sick? However important it is to work for better health status most of the community judge the NHS on how well it treats the sick.

The story of the last twenty years of the NHS has been turbulent and it has been characterised by an inability to learn from experience. Organisational change, to which managers are addicted because they feel empowered by being busy, has produced relatively few direct improvements for patients. Professionals can be forgiven for thinking that they continue to provide care in spite of the organisation. The challenge for management is to return to the culture of enabling professionals to do their work effectively. The challenge for the future Labour Government is to give clear leadership by reviving the values which once made the NHS the prime example of the state as benefactor.


I am very pleased to have the opportunity to talk to you today, confident in the knowledge that, for once, I am talking wholly to people who want the best for the health service. I am also pleased that the needs of users are so prominent on the agenda, as it seems from the reams of papers that I see each week from London health authorities that users can be easily forgotten, or seen as the one obstacle to the smooth running of the service.

Recently I saw a scurrilous, but highly illuminating, broadsheet, that was circulating as “samizdat” among staff at the Wellhouse Trust (once known as Edgware hospital in the days when the NHS was not trying to disguise what it was there for). This document, headed ‘The Virginia Bottomley Memorial Hospital – Guidelines for Staff” -was apparently written by disaffected staff and had the following wry comments in it:

“After long and painstaking research it has been discovered that the single biggest drain on resources is the patient – so don’t admit too many of them.” It continues:

“In the event of the need to summon a consultant, a list of private hospitals and golf courses will be issued to nursing and medical staff”.

Though written for laughs, this sad document said more about the concerns that are widely felt for the state of the NHS and its future than many serious papers.

In this contribution, I want to look at just a few issues to see how far the NHS actually serves the needs of its users. The issues are as follows:

  • How well is the NHS actually performing?
  • Do NHS users receive an equitable service?
  • How far are users involved in shaping their services?
  • Do users feel safe?
  • How well is the NHS actually performing?

Lack of information

It is difficult to answer this question at times. Information is fragmented and incomplete. The advent of the health market has engendered secrecy and a reluctance to allow a free flow of information, lest it benefits competitors.

The pervasiveness of performance related pay for managers, sometimes amounting to 20% of their salaries, militates against an honest exploration of what is not going well, and pressurises them to put a rosy glow on the gloomiest events. In the language of the NHS, there is no such thing as a problem – merely an endless succession of “challenges”.

Moreover, the constant flow of press releases about the Patient’s Charter, waiting lists etc, all read like the worst excesses of a public relations firm. But unfortunately this rarely accords with the experience of the many people that we are in touch with through GLACHC and through an extensive network of voluntary sector contacts across London.

The reality is not so rosy

In one sense there is an awful paradox: the less satisfactorily a service is delivered, the lower the expectations become, and the less publicity is given to its shortcomings. But even so, many unacceptable things come to light. For example, in May-a time of the year when admissions should be at their lowest -patients were left on trolleys for 7 hours on a Monday night at Northwick Park Hospital. (This is not to say that Northwick Park is unusual; it just happened to hit the headlines in the press.) A close look at Hansard reveals some of the causes of this kind of occurrence. On 20 April, Tom Sackville, the Under Secretary at the Department of Health, revealed that the average daily number of available beds in England had fallen from 361,670 in 1979 to 242,356 in 1991-2. In the Thames Regions, the figure had fallen from 111,998 to 69,261, that is, in the Thames Regions there are now 61.8% of the beds there were 12 years earlier.

If we look at waiting list figures, in spite of the huge attention that has been paid to rid the NHS of its most embarrassing feature, we still see enormous problems. For example, to take North East Thames Regional Health Authority, the situation for waiting lists for in-patient and day cases is actually deteriorating. From March 1992 to March 1993 there was a 29% increase from 75,800 to 79,571. (Source: NETRHA papers for meeting on 25 May 1993).

Patient’s Charter initiatives may well have focused on the scandal of waits over two years, but only at the expense of increasing the hardly less scandalous situation of waiting almost two years. Indeed, if we look at the government’s own figures for waiting times in March 1993, we see that there has been a national increase in the total list size of 1.6%. In the four Thames Regions, 266,300 people had waited between 0 and 11 months for treatment, while 22,075 people waited for 12-23 months. This actually represents a 6.9% increase in the total list from December 1992. In NW Thames RHA, the 12-23 month wait had increased by a staggering 30.8% between December 1992 and March 1993.(DoH press release, 10 May 1993).

While I accept that techniques and treatments are changing, and hospitals may not be the place of choice for a range of treatments, it has to be said that there is an uncanny correlation between the reduction in beds and the frequent crises in gaining admission to hospital when that is clearly what is required.

Given all this evidence, it can hardly be argued that the NHS is performing well for users.

Do NHS users receive an equitable service?

There are two dimensions to this question:

  • Do users receive an equitable service within the NHS?
  • Do users of NHS services receive an equitable service compared to users of non-NHS health care?

Equity within the NHS?

Even the most optimistic commentator cannot really argue that access to the NHS is equitable. Apart from the inherent advantages that go with education, adequate income and an ability to negotiate the system and get the best out of it, there are actually many structural features of the NHS that make it difficult for large sections of the population to use it. For example, the disadvantages that homeless people and refugees encounter are well known, and I will not rehearse those arguments here.

Similarly, there are still enormous problems for people whose first language is not English.


It is also alarming that Black and minority ethnic people all too frequently suffer from individual and institutionalised racism in the NHS, even where language is not the issue. For example, there have been instances where young Black people in sickle cell crises have been refused pain killing drugs, because of racist assumptions that they were exaggerating their pain in order to get drugs. There are also numerous and well documented examples of the over-use of the mental health act to detain Black people, particularly young Black men, compulsorily for psychiatric treatment. None of these examples give us confidence that NHS users receive an equitable service.

Whose priorities?

In the choice of priorities, users find that inequities are further perpetrated. Not long ago, I was given a bus-stop lecture by an elderly woman on the inadequacies of the chiropody service. She was on her way to her 6 monthly chiropody appointment, and very grateful she was too, although her gratitude did not get in the wayof her indignation that she was all but housebound for half the time for the simple reason that she could not get her thick and difficult toe nails cut often enough.

I would not argue against the benefits of appropriate technology, appropriately used. However, I must observe that it seems easier for a consultant to obtain a multi-million pound scanner or other piece of equipment than for a would-be user of chiropody, or home bathing, or any number of cheap and effective services, to get what they actually need.

Health and wealth

Of course, one of the major obstacles to users getting what they need arises from the wilful, ideological refusal of successive Ministers of Health to acknowledge the link between poverty and ill health. This is a subject dear to the heart of the SHA, and your record of activity and publication on this is impressive. I need not say more, except that the NHS cannot serve its users while it pretends that poverty can be seen as somehow separate from ill health.

In practice, this means that many of the initiatives of recent months and years are deeply flawed because they do not put poverty at the centre of things. Thus, Health of the Nation attempts to grapple with some key issues, but without truly including what really matters to people, which is the relationship of how they live and what they earn to how well they are. If users’ needs are to be served, we cannot separate the health of the nation from the wealth of the nation.

Similarly, a Patient’s Charter that sets standards for how long we have to wait for treatment without wondering why some people need more treatment than others is not a Charter for improving either health or the health service.

The P-word

We now move on to the other aspect of whether users now receive an equitable service: that is, whether what we get in the NHS is comparable with what people get in the private sector. I believe this to be an area where issues are frequently over-simplified.

Many people seem to think that the NHS offers an inferior service. I know personally many people who believe they would get better treatment if they “went private”. Often, they are wrong. The incidence of over-treatment in lavish but poorly supervised clinics may be more common than they think. But it is undoubtedly true that treatment within a reasonable period, or in some cases obtaining treatment at all, is only available to those who can pay for it.

It is clearly not in the interests of users to delete whole areas from the NHS, as is the case for large slices of optical care, and much dentistry for adults (especially those who simply cannot find an NHS dentist). Nor will it benefit users to find that treatment for varicose veins, lumps and bumps, impacted wisdom teeth and infertility – to name just some of the early targets of rationing – is becoming extinct as an NHS provision. It is hardly necessary to point out to an audience like this that the more the private sector shows an interest in a condition or treatment, the more likely it is to fall off the NHS list. This is important, since we are not talking about the cessation of treatments where audit has shown them to be unnecessary or dangerous; rather, we are talking about those treatments that cause discomfort or distress, while being profitable for Harley Street and its suburban relations.

How far are users involved in shaping their services?

The rhetoric

I now want to move on to an important area where it is frequently claimed that users are better served than ever before. That is, how far does the so-called reformed NHS involve users in shaping their services?

If you had no other evidence before you than the reams of printed material, you would have to conclude that user involvement was a major industry in itself, and, indeed, a major success. A superficial glance at the GLACHC file brought the following titles to light:

  • Consultation Manual North West Thames RHA
  • Pathways to Health Gain -determining health needs by community development- Enfield Health Authority
  • Consumer involvement in health care – Swindon Health Authority
  • Healthy dialogues – practical ways of involving local people in their health care – SW Thames RHA
  • Local voices – the views of local people in purchasing for health -NHSME

In case you think this is a case of consultation in one country, we also have in our files a document called “Getting consumer consultation right” from the Consumers’ Health Forum of Australia.

At that point, I gave up looking at our files, though there were two more bulky files to go through. Suffice to say that there is no shortage of rhetoric to support user involvement.

But what is the reality?

The reality is that there is huge local variation, and as you might expect, the local picture varies with the enthusiasm of local managers. But there is an underlying difficulty. The vast majority of even sincere attempts to involve users take place on the detail of proposals. But users have little part in setting the agenda.

One of the most demoralising series of “consultations” was the long scries of documents from directly managed units who were seeking trust status – 1st wave, 2nd wave, 3rd wave and 4th wave. As we all know, it is impossible to bring to mind one example where user views had any impact on the outcome of a trust application. But I can think of numerous examples where local people vowed never to get involved with a consultation exercise again, because they felt it to be such a waste of time.

In theory, the split between purchasers and providers can be used to elicit user views and translate them into services that meet their needs. In practice, it requires a major change in all aspects of health service planning and service delivery.

First and foremost, it is necessary to be honest about what can be changed. This means fewer castles in the air and more sensible huts on the ground. It also requires, as far as possible, that users are involved in setting the agenda for change, and not just included in the process when the ink is drying on near-final plans.

No-one pretends that listening to people and taking their views into account is easy. Trying to share power with people who are used to doors slamming in their faces takes time, and may provoke more scepticism than co-operation, at least until those seeking user views establish their bona fides and demonstrate that they are not just setting up talk shops to divert the energy of users.

Involving users also requires quite different ways of working: different ways of providing information with minimum use of jargon; longer time scales for meaningful consultation; practical assistance with expenses; meaningful feedback on the results of formal and informal consultation. These are just a few of the prerequisites. GLACHC has published quite a lot of material that goes into these issues in more detail (eg NLIS Consultation and the voluntary sector, Listen to People, and the forthcoming Partners in Purchasing – the role of the CHC in commissioning health services).

From the work we have done, it is not at all clear that the NHS is really involving its users. If it is doing so, it is keeping very quiet about it. My survey of over 70 voluntary organisations showed that few were clear what they could influence -though one Race Equality Council said they were very clear that they could influence the local Health Authority on nothing at all! Equally worrying was the fact that many organisations had no idea whether their hard work in seeking to influence health agencies had borne fruit or not.

This situation cannot go on. It will not go on, because local people will not give their scarce time to empty exercises, or to well meaning efforts that achieve nothing. As things stand at the moment, we have to conclude that the NHS is not serving the needs of its users by taking their concerns seriously and altering services to fit their needs.

Do users feel safe?

I ask this question since I contend that the NHS can only serve its users well in proportion to the extent to which they feel safe, and feel that they can trust the NHS to look after them.

In reality, users and would-be users of services do not feel safe. They do not trust that services that they value will continue to be available. This year’s restriction on cosmetic surgery or infertility treatment may lead to next year’s elimination of some widely used vital service.

All the change, all the “downsizing”, all the “rationalisation” – these things make us all uneasy about the future of the NHS. I have seen instances where people’s well-being is undeniably affected by the uncertainty that they will still be treated in future. I have heard disabled people fear that they will be seen as too expensive to treat.

A service where users feel unsafe is not a service at all. The NHS is an old friend. While it needs to change, and needs to develop, the retention of a comprehensive and national service really is one area where it is important to maintain “traditional values”. Only a user-centred, accountable and properly funded NHS can meet this need.

Equity, Prevention And Accountability – A Socialist Agenda For The 21st Century – DAVID BLUNKETT

In the autumn of 1993 the Labour Health team plans to publish a consultation document, which will pose some of the major routes we should be taking, and some of the issues we should be addressing, as we seek to get the health debate on to our own agenda, but it will not lay out solutions. This will give a real opportunity for the Party and those involved in the health service to have a say in developing health policy for the late 1990s and the twenty first century. The reason it is delayed is partly because of the enormous activity that emerges from the Department of Health, which is an alternative to managing the service. Matthew Parris, who used to be a Tory MP, has described Virginia Bottomley as Mary Poppins on crack, which is a description I am using as often as possible. The latest example of activity without any direction is the way in which the speciality reviews on tertiary care for the four Thames regions – not just London – were published. The Secretary of State would not come to the House to make a statement – we had to spend an hour with the Speaker, to agree a private notice question, which meant that we had to drag Virginia Bottomley to the despatch box. That gave me only three minutes, according to the rules, but at least she had to come and answer some questions.

A Worsening Service

The truth is, the Tories do not know where they are going on any of their health service changes. They do not know the difference between the speciality reviews, the aftermath of the Tomlinson enquiry and of the activities of the London Implementation Group. They are not clear what they are doing in terms of the new structures and the developing two-tier system. They have set up a review under Kate Jenkins – who was the most political of the senior civil servants appointed in the Thatcher era – to consider NHS structures: the Management Executive and its relationship with the regions, the future of outposts, the relationship between the Department of Health and the Management Executive. These are rather important issues and it is quite likely, given that Kate Jenkins was responsible for the ‘next-step’ agencies, that they will propose that the Management Executive should become a next-steps agency. This would disentwine completely the minimal threads of accountability in the NHS. It would mean that questions, written and oral, and letters to the Minister would be referred on to Sir Duncan Nichol, on the grounds that Virginia Bottomley is only the good-news queen and would not take any responsibility for the activities of the NHS on the ground. Already we cannot get questions answered in the House about Trusts and GP fund-holding practices, because they are responsible for their own activity. It is extremely difficult to have any sense of accountability.

The outcome of all this is a worsening health service, and worsening health. Even TB is now re-emerging in this country. The graph in terms of increase in the number of people identified over the last six years is quite staggering and the same is true for dysentery. The correlation between the increase in dysentery from just over 3000 in 1989 to over 17,000 in 1992 is directly related to water cut- offs and what the water companies are up to. So there is a key agenda for us in linking economic and social policy with preventive health issues. We are going to be arguing all over again the late nineteenth and early twentieth century issues, in the way that clean water and decent sewage disposal, clean environment, fit housing and education related to public health improvements all those years ago. We have to find new ways of expressing this so that people see its relevance to politics. Political journalists say that health is a specialist subject and health journalists run away from the political side because opposition is political in Britain and they remain neutral! Seriously, that is what they say and that is the problem we have at the moment.

Equality and Equity

In developing the agenda I want prevention to be absolutely central. I want us to start arguing about the way in which high unemployment has an impact on both physical and mental health, the way that poverty affects individuals and the whole family and the health of the wider community. I want us to look at equity. Not just ensuring the poor become richer, but narrowing the gap. The overriding difference between Labour and Tory is on equality and equity. The Tories have allowed the rich to get richer at the expense of the rest. There is really good evidence that the narrower the gap between rich and poor, not only the better the health of the nation, but also the greater the economic growth of the nation. A survey of twenty four democracies actually proved that. This raises much wider issues about the relationship between economic policy and good health, so that we can relate what we are doing in the economy to improvements in health gain and we can link that to public health in the twenty first century. I want us to set about explaining these facts in simple ways so that everyone can understand what we are talking about – not just in improved housing and employment but in the way economic policy works, the way the growing number of part-time, badly paid jobs with poor conditions affect people’s health and how we can develop an occupational health policy and actually illustrate again the hard economics of it.

Occupational Health

We shall have hard-headed arguments with our colleagues in the treasury and industry teams, to show that occupational health care could dramatically reduce the number of lost days of work through sickness and accidents and improve the productivity of economic activity. Ian McCartney is working on developing occupational health policy which will tackle the staggering 180 million days lost through time off work for sickness (compared with half a million days lost on strikes). I think we can get across the message that improvements in people’s own personal prosperity – the ability to buy decent food, to have their house heated – are absolutely crucial, not just in general, but specifically for the care and support of elderly people. We need to grasp and use the politics and implications of the growing number of people in retirement. For instance we need to show the link with other actions, like the imposition of VAT on domestic fuel. The Government simply will not accept that there is any correlation at all. Those are the sort of links that have to be made.

Emphasis on Prevention

If you live or have any activity in central London you just need to breathe the air to understand what air pollution and poor transport policies actually mean for our health. I want to develop forms of social, environmental and economic audit, so that we can actually show what we are losing in terms of economic activity, what we are having to spend unnecessarily which could be avoided. We need to revive the debate of the mid and late 1940s. There was a nice theory that if we setup an NHS and people were treated, the level of need and demand would go down. Unfortunately what never happened was to link that commitment to the establishment of the NHS to absolutely core preventive measures which tackled causes rather than symptoms. The health service was effectively high-jacked by those who have an interest in ever greater investment in technology rather than in basic measures. I do not underestimate the difficulty of taking office in 1996 and trying to debate these issues in a climate where people want two billion, three billion more investment to stop the crisis which undoubtedly will be with us in the health service. But I think we have somehow to get a grip of ourselves and say that some money must be clearly earmarked to tackle the problem rather simply deal with the symptoms, otherwise we shall go on for ever putting sticking plaster on increasing health demands.


We are obviously committed to democratising the health service and reintegrating non-accountable, self-perpetuating Trusts back into the system. We need to debate whether that means that we do away with the purchaser-provider split completely or whether we adapt it to take out the commercialisation and competition. We need to find ways to combine health planning and health gain so that family health service and health authority functions involving joint commissioning, with general practitioners and other primary care staff, can be developed in new ways. But rather than go back to the Tory reform before last I want us to think afresh about how we can re-invigorate the principles and values of 1948 and incorporate them in a health service for the twenty-first century. The two-tier system generated by GP fund-holding will have to go. Again we want to ensure that controlling decentralised, devolved decision-making does not send us back to a bureaucracy where you have to fill a form for quite minor expenditure or for the employment of staff, which is what used to happen in the past. We need to examine how we improve bureaucracy when we are fundamentally against it and tackle those problems head on. This means democracy, accountability and involving local people. We need to find new ways of getting people on to health authorities, so it is not just someone being nominated because no one can think of who should do it or Secretaries of State taking over from the Tories and sweeping aside their hegemony, corruption and nepotism and replacing it with our own. We have to find new ways of tackling that.

Return to a Public Service

That brings me on to the current situation. There is a deep, deep sense of despair in some quarters in the health service. What has happened with the commercialisation and potential privatisation of services is leading to what, with great care (because I cannot afford a decent lawyer) I can only call corruption in the health service. This is resulting in private profit being made at our expense.

The reason I am raising these matters is that the issue of probity is now a critical one – and I think it has wider implications for accountability and democratising the health service. The health service subject to privatisation and tendering is ripe for exploitation, for private profit to be made at our expense. It is absolutely clear that they are turning it into a business, the kind of sleazy business that we have been debating in the House of Commons recently. We need to bring these things out because they illustrate how deeply wrong their system is, why procedures that are perfectly reasonable in a moral climate in a public service, are woefully inadequate to deal with private companies seeking a profit. That is why we must find a way to return to sanity and to an accountable, democratic health service and why we must take the private and commercial element out of it. If we can get that message across, people will stop saying, isn’t it wonderful that private money is coming into the health service because the Government will not find the money? Isn’t it wise that they are allowing private companies to set up hospital hotels and private wings on hospitals to make a profit? Does it really matter that we redefine post-operative care as convalescence and then charge people for it, (which is what they are intent on doing)?

We need to link all those things together to say that what we want is to have a health service where profits cannot be made. You cannot make profit out of prevention. And you cannot make profit out of a public service which is publicly funded and publicly accountable and free at the point of delivery and equal in terms of access. Those are things we need to build on and with your help that is what I will be doing. The Labour Health team have produced a Health Bulletin setting out the papers produced over the past few months. We will be producing more. We welcome information from you and hope to use it profitably.

1 Quick, A & Wilkinson RG. Income and Health. Socialist Health Association, London, 1991.

2 Labour Health team discussion papers available from David Blunkett’s office, House of Commons, London SW1A 1AA or from Socialist Health Association, 16 Charles Square, London Nl 6HP.

Health And Social Care: A Seamless Service? – PETER WESTLAND

I am giving a personal view which does not necessarily represent the views of the Association of Metropolitan Authorities. I intend to raise questions about the effectiveness of the new deal in Community Care. I will give a brief history of the reforms and what I think is their significance; examine whether the reforms were based on the best interests of users or whether they were primarily a device for securing effective control of government expenditure whilst at the same time shunting the blame for the consequences away from central government; and I hope to be able to look at some aspects of the “new” NHS and refer to the problems which its requirements pose for the social services. In discussion we can perhaps explore how to overcome the difficulties.

But first I will outline some case histories:

Case 1. An elderly woman, with quite severe arthritis and very restricted mobility is in hospital after a mild stroke. She wants to go home and needs some home care to assist her elderly husband to cope. She will need regular warm baths as she feels it eases her arthritis. Her husband cannot cope with this. Is this a job for the social services home care services or is it for the community health services?

Case 2. An elderly man, a widower on a pension and income support, has recently had an amputation of one leg just below the knee. He is very depressed. He does not want to go into residential care and is afraid of going home. The consultant surgeon is insisting on having the bed vacated and strongly advocates Nursing Home care, saying: “he needs it and he will get used to it”. Whose responsibility is it to deal with this situation?

Case 3. A young man with a tendency towards schizophrenic episodes has been ill for a long time. He lives in bed-sit accommodation, but has no social life. He is discharging himself from hospital. Who should be responsible for offering and providing a rehabilitation programme on a daily basis?

The first and third cases were problems before re-organisation and they remain issues to be settled if patients such as these are to receive uninterrupted and coherent treatment, support and care. However, the way in which such cases are dealt with depends largely on the local relationship between the local authority social services departments and the NHS (which bit of the NHS is another question – purchasers or providers, GPs or Trusts?).

The second case concerning the man with the amputation is interesting in that the new system means that the patient would be dealt with differently. Before 1 April 1993 he would probably have been “transferred” to a nursing home and the social security system would have paid the fees. He has now lost this entitlement and is dependent on an assessment of his needs by the local social services department. This has positive and negative aspects.

Background to the Reforms

In 1979 social security expenditure on residential care was ten million pounds. By April 1993 it was bordering on three billion pounds, and out of control. People were entitled to go into residential or nursing home care if they chose to do so and if they did not have sufficient means, the social security system would pay. By March 1993 there were some 280,000 people in residential and nursing homes who were claiming income support. By 1988 the Government had become alarmed at rising expenditure and, to be fair, we in local government disliked a system which funded residential care without reference to social need, thus making people choose this when they could have remained at home supported by social services if the social services department had had access to the same funding.

Various enquiries and reports, the best known being by Sir Roy Griffiths, recommended, surprisingly, that local authority social services departments were the only suitable vehicles for community care. Mrs Thatcher then set the No. 10 Think Tank the task of finding some other way forward, rather than giving local authorities new responsibilities. Even the Think Tank could not do any better, and so the leading role of local authorities was conceded, against all the trends at the time.

The 1990 NHS and Community Care Act encapsulated the health and social services reforms, but -and this should have been a warning signal – the Government deferred the community care reforms, because they would have added a significant burden to the Poll Tax. Implementation was thus delayed from 1991 to 1993. Local government, keen to take it on, protested. Why were they so keen? It was a sharp contrast with other government policies which were intent on removing local authority powers and duties by transferring them either to central government or to unelected quangos -leaving regulation and purchasing as the main local authority functions.

Essential features of the new Community Care

The main features of the new community care arrangements are:

  • Community Care Plans
  • Assessment of individual needs by the newly tided Care Managers – a new breed, partly social worker, partly gatekeeper/fixer/gamekeeper. They are seen as purchasers of services.
  • Assessments to be “needs led”
  • Carer and user views to be paramount
  • Care plans to be reviewed periodically and adapted by Care Managers.

Close collaboration with the NHS would be required, as there was a fear that bed-blocking would increase pressure on the NHS to provide continuing care, when it had spent the previous five years divesting itself of such responsibilities via the social security route. Discharge planning for patients would be emphasised strongly.

It sounds good, with emphasis on things such as the proper assessments of need and giving priority to the views of carers and users. However, the financial realities soon became apparent.

Underfunded from the start

From the 1st April 1993 local authorities took on all new cases coming forward for community care whether residential or non-residential. Money which the Department of Social Security (DSS) could have spent was to be transferred in stages over the next three years. However not only was the transfer some 135 million short of what the social security system would have spent, but local authorities had been faced with severe cuts in their budgets for 1993/4, amounting to some 100 million reduction in base budgets. Some authorities had to cut more from their base budgets than they received in specific grant for the new workload. Home care services in many authorities were being cut. Day centres and residential homes were closing just as the new clientele started to queue for services on the 1st April.

Not only was the transferred money insufficient, but the way in which the Government distributed it was bizarre. The sensible thing would have been to distribute it on the basis of the likely need to purchase residential and nursing home services. However, by personal intervention of the Minister, a new formula was devised. Fifty percent was to be distributed according to where the people are (a formula relating to the numbers of elderly people) and fifty percent according to where the homes are situated (which of course bears no resemblance to the need to buy. It may simply reflect the fact that a lot of wealthy people have taken up residence in care homes in a particular county). This distribution formula benefited what were once regarded as safe conservative counties (Hampshire, Surrey, East and West Sussex) and some other authorities including Devon, Sefton, Croydon and Bury. The best or worst example was a bonanza for Devon of some 4 million more than they would have received if the money had been allocated on a population basis.

Support for the private sector

As if this was not enough, government control goes further. Eighty five percent of the transferred money has to be spent on services bought from the independent sector.

If Hackney, which always seems to suffer, does not sink under the problem of a sheer shortage of funds for its population, a large proportion of whom are in receipt of income support, then it suffers further by having to spend eighty five percent of its money on independently provided services. So if there are no independent domiciliary care agencies in Hackney it will have to spend its money on residential care in the private sector, thus depriving some people of the opportunity to remain at home. Other authorities, with a less severe shortfall than the inner London authorities, will still find their freedom of action to serve the best interests of the consumers severely curtailed by the Government’s plan which was intended to protect the private sector. It is a measure of their incompetence that in order to do so they gave disproportionate amounts of money to those authorities less likely to use it.

Finally, in a mean political gesture, the Government refused to give residents of local authority homes the Residential Allowance of 50 per week in London to assist with the costs of accommodating them. Those who go into private homes do of course receive this allowance, thus giving an incentive to local authorities to reduce consumer choice by either closing old people’s homes or transferring them to the independent sector.

So much for the background. What about the seamless service?

A Seamless Service

Looked at from the individual user’s point of view there is a theoretical gain in the co-operation of NHS, local authority, voluntary organisations, private entrepreneurs and corporate providers. But there are some severe practical restrictions. The gain is a full assessment of need and the production of a package of services tailored to meet those needs. The problem is that in reality this has to be kept within what the government calls “existing resources” (which I have described) and it is in the face of the Government’s attempts to limit entitlement. Thus the Department of Health (DoH) guidance on assessment urges local authorities not to record unmet need in such a way as to enable the person being assessed to see the assessment lest she or he might insist on her or his rights under the Disabled Person’s legislation to receive such services as the assessment recommends.

Moreover, although so far not published, government officials are refining the expectations of care management. It was to be applied to all who were assessed and provided with services, so that the appropriateness of the assessment and of the service could be reviewed at intervals. To introduce it would be very expensive and we have calculated the cost. The DoH unofficially now says that care management is appropriate only for those “on the margins of residential care”. This pronouncement has yet to appear in print – perhaps by a little advance publicity it can be headed off, but I doubt it.

How does this impinge on the seamless service and what other factors are influential? First there is the bizarre method of distributing the transferred money which will result in different levels of service in different authorities. You might say there is nothing new in that. But whereas some of the disparities in the past have been that Labour controlled authorities have had a better funded service than others, a combination of council tax capping and the skewed distribution may mean a greatly inferior level of provision in some inner urban areas. In my view, this would mean that criteria of eligibility for service would be tightly controlled so as to meet the requirements of available finance. Neighbouring authorities may develop very different criteria. What is new about this is that the Labour authorities in London and district councils may have to be much meaner than their neighbours. Health authorities and Trusts may therefore experience significantly different levels of services from neighbouring authorities whose patients they are treating. This is not a good enough recipe for seamlessness. Though it is still early days, some authorities are extremely worried about the heavy demands being made which will outstrip the transferred resources. Other authorities are finding less demand for assessments than they forecast and can use money to develop domiciliary services.

Conflicting pressures

Second, the performance indicators of the two services are, in some respects, at odds with each other. Acute services face more and more pressure to get people in and out of beds more quickly. Tomlinson’s proposed reduction of beds in London is based partly on the premise that London’s acute services will reduce their length of stay to the average for the rest of England. However, for complex cases the rosette of excellence for a social services department is awarded only for a multi-disciplinary assessment: a review of needs with potential user and carer. If, for example, the user is to return home, the assessment involves careful negotiations with several providers, both on service quality and price, or, if the user cannot return home, the offer of help in making a choice between several potentially suitable homes, and, simultaneously, the preparation of a contract specification which meets the individual needs of the person concerned. That person or their carer or advocate also has a right to participate in setting up detailed requirements. An authority completing this process will receive the DoH badge of merit. But while they are doing this work the NHS Trust and/or the consultant is consumed with anxiety about its performance, the cost per case, and its loss of the next patient to be admitted, followed by cash. All of this may be delayed by the assessment process. Thus the legitimate aims of the NHS and the SSD may be in direct conflict in their application.

Managerially, the local authorities and health authorities are closer than ever before. Joint assessments of the needs of the community are being made. Agreements are reached on discharge plans and processes. Financial forecasts are synchronised. And yet the NHS is moving inexorably away from having the capacity for local planning while local authorities, particularly in the counties, are becoming more and more local. Health authorities combine to form large purchasing consortia – and then sit and wonder how to deal constructively with the subversive threat which GP fundholding poses for them. Local authorities get smaller and closer to their communities – or they will if the Local Government Commission has its way. Two purchasing bodies with an overwhelming need to co- operate arc moving quickly on one case and slowly on the other, in opposite directions.

Managerially, efforts are being made, some successfully, to reach joint agreements about provision of services for mentally ill people and for those with learning difficulties. This collaboration appears to be limited mainly by resource problems. Where these bite too hard there are difficulties over boundary issues such as those illustrated by case 3 above. Furthermore, the Audit Commission has recently ruled against a scheme in London which would have pooled resources under a single management.

Local authorities are supposed to work with Trusts and district health authorities. One problem in working with some Trusts is that they regard their plans as commercial secrets, to be revealed only when deals have been struck with health purchasers. It is difficult therefore to plan to respond to the operational forward plans of some Trusts, for we do not know what they are. In the drug dependency field there is evidence of increasing difficulty in getting NHS providers to take part in joint planning at all.

Where is all this getting us?

There are some who believe that all would be solved if the NHS took on responsibility for adult care. Central government could then run down the service using direct rather that indirect command structures. However this would remove any semblance of local democratic influence over what is generally regarded as a service which needs to be wholly responsive to local needs. It would also raise the complex issue of payment for services. Local authorities charge the users of residential care and nursing homes. The NHS is free – and is pledged to remain so. Differentiating between NHS and non NHS services in the NHS would complicate an already complex picture. Furthermore the NHS has far too many internal problems to be able to absorb this one. However, governance is the key issue and Roy Griffiths proved to be champion of local democracy. Monolithic structures are a threat to consumers’ rights.

One measure which might help to provide a solution is for local government to take over the purchasing role in health care. There are good and strong arguments for this although the advent and encroachment of GP fundholding -which in some limited respects has had some success (although entirely false hopes have been built for it on the strength of that influence) – will make it difficult to achieve.

Failing these macro solutions much will be left, as usual, to jointly agreed local solutions, with the insoluble resource problems being passed back to central government to resolve, or to blame on inefficient local management. My analysis of the structural and financial forces at work lead to gloomy conclusions. We are lucky at least that the managers of the services are trying to make it work and that there are improvements for those who do get services. I fear the efforts of managers will not be enough to compensate for the increasing number of people who will not get the services they need.

A Trade Union Perspective PAUL MARKS

It is still a little early to present UNISON’S perspective, because we do not officially exist until 1 July, but there is a major degree of agreement between us as far as the National Health Service is concerned. We are obviously committed to the basic principles of the NHS, but even before the 1990 Act I think it would have been difficult for us in the trade unions to say that the health service has actually lived up to its founding principles for the last 45 years.

Quality has not been the same for all the people, regardless of where they live. We only have to look at London and the nature of GP services in inner London compared with these in middle class suburbs in outer London to see that we have failed in the past to guarantee everybody the sort of equal service that their condition might require. We failed to guarantee equality of access not just in relation to GP services. The middle class has always been able to get itself a better service through the NHS than the working class, because it has been more articulate, more capable of expressing its demands, more successful in exploiting political avenues to ensure that services are delivered.

We have not seen a particularly successful history of making it free; more and more things at the edge of the service have become vulnerable to additional charges. Dentistry has almost entirely disappeared from the NHS; free eye tests have been withdrawn; costs of prescriptions have risen progressively and act as a deterrent to using the health services for many. And I think we are also beginning to see that the former basis of public funding is coming into question. The debate is beginning on how we continue to fund it, and that can only mean that there is a question mark about whether it will continue to be a publicly funded service.

Private provision penetrating

The introduction of the internal market has worsened all the problems that were there before. The market now is driven by nothing other than cost. It has no concern for the patient. It has no concern for quality. At the time the Bill was going through we were told that money would follow the patient. We have instead seen that the patient has followed money with the GP as fundholder, or else the money has not been there and the patient has been pushed back when seeking treatment. The market has opened up the way for the private sector to become a key player in the delivery of health care in this country. The private sector is now involved as a direct provider of NHS-funded services. That may not count for an enormous volume of NHS work, but as the door swings open the pressure in some quarters is clearly to push the door ever wider and to separate the notion of provision from public provision, by Trusts or directly managed units, and to say that anyone who has sufficient qualifications can set up to provide.

The small number of private sector hospitals we had in the previous NHS may well simply be the building blocks for a far greater private sector penetration of the delivery of health care. That fear is made more acute by the GP fund-holder scheme. We have already seen that fundholders do effectively introduce a two-tier level of service. The access to care for patients of fundholders is frequently better, because of the irrational way the monies have been distributed. It raises the problem that perhaps we begin to put ourselves in the sort of mind set where it would be possible to talk about a system where you have a public emergency health repair scheme and a separate private insured system for elective treatment.

The notion that we could find ourselves going the way of the Americans is not too far fetched when you introduce the split in responsibility for getting care between the district health authority on the one hand and the GP fund-holder on the other. And it is very easy to go down this sort of road by the absolutely remarkable con-trick of the shift of responsibility that the Government has pulled off with the market. Because it is up to the purchaser to get the best value for our money through contracts with the provider, when there is a failure to deliver – whether it is a failure to have a contract in place or a failure in actual delivery – the focus of responsibility for that failure comes down to the two contractors, the purchaser and the provider. The fact that the reason for the failure to deliver may be to do with gross under funding is somehow glossed over, because our primary focus is on those two players. Virginia Bottomley can very easily seek to avoid responsibility for the consequences of her decisions on the volume of money that is made available, by saying that it is up to the purchaser and provider to sort this out for themselves. So in that transfer of responsibility away from government down to the purchasers and providers you have the largest element of privatisation of the NHS, because it has taken away the public, governmental, responsibility for delivery of a humane and public service.

Incoherence and contradiction

We have also seen the major loss of coherence in the way the health service is managed. London is a stark example. Tomlinson said one thing, Making London Better said another, the Speciality Reviews have come out with a third. The consequence of that is that we do not know where London’s health services are going. We do know that up to 20,000 staff in London are fearful for their jobs. People are beginning to vote with their feet, to get out of the units that are blighted by having been mentioned in despatches. And there is nothing yet in place to provide the alternative support for the people of London when they start losing the beds from the threatened units. The threat to staff really must not be overlooked. I am not just saying that because I am here from a trade union. The National Health Service depends on finance, strategy, planning and on the bedrock of its staff. Without the staff you can have the best plan in the world, the highest level of finance, but deliver nothing. If you erode the confidence of staff in the service and in their commitment to that service then it follows that the service will function less efficiently, less effectively and it will fail to achieve the objectives that we would all place on it.

Strategic policies

So, UNISON is opposed to the internal market and the changes brought about since 1990. Saying that does not mean that we hark back to the brave days of the 1980s. I do not have a particular problem with the separation of the commissioning and the providing of services. But you can have that separation without linking them back together through a commercial contract. What matters is that they operate within a strategic overall policy for the delivery of health care and within very firm public accountability.

UNISON is now going to start developing its analysis of the way forward. We start from three sets of major concerns, which come from our members as employees. First is their right to equal involvement in the determination of their pay and conditions, because staff dedication is absolutely essential in the delivery of health care, and because the service is blighted by low pay and poor conditions. We will therefore be against the progressive break up of the NHS, against privatisation, against contracting of services, because that weakens the ability of the employee to have an input on her or his terms and conditions.

Second, we will be concerned about the member as a part of the service. People who work in the NHS do not just relate to the NHS as an employer; they relate to it because of an engagement with its aims and values, and that needs to be recognised by the involvement of staff in the development of policy, in the shaping of priorities, in the overall running and delivery of the service.

Third, we will be concerned with the position of trade union members as a citizens, by empowering them in the workplace to influence their own day to day lives. From that we claim to have a legitimate role in seeking to empower individuals in society to take control of the things that affect their daily lives. In the case of health that means guaranteeing access for individuals to the care they need, where they want it, when they want it, how they want it. It means guaranteeing local determination and involvement in the delivery of care. Access alone is not enough. There must be equality of access – not just avoidance of the two-tier system, but equality of access between men and women, between white men and women and black men and women, between disabled people and those who are not disabled. We do not have a good record of guaranteeing equality of access. If we do not strive to ensure that, then by our failure we actually make it easier for people to come along and say there can be alternative ways of delivering healthcare: you can get it through the NHS; through a private insurance scheme; through a scheme based on your employer.

Participation of users

Users must be part of the process of determining health policy. It has been rather easy for professionals and academics to overlook the fact that the service is about delivery to people, not delivery to one’s peers. Obviously the market has made it much more difficult for us to involve people in their own healthcare services. The market is excluding any notion of public accountability. Commercial confidentiality makes it very difficult to see what exactly is being done, to see whether what is being done is sensible and in the interests of the local population, and whether it will achieve long term goals of the NHS.

There is a plain loss of accountability due to the market. First of all we need a very firm assessment of what the demands are. I do not believe that we have been as successful as we should be in devising our services in relation to a full assessment of need. Without, such an assessment you cannot know whether you are matching up to your goals or falling short of them. To do that we need a strong public authority charged with assessing need and guaranteeing user access to its deliberations. That requires something like regional health authorities and not going hell for leather, as the Government is, to destroy them and their ability to take the strategic planning role. That strong authority needs also to be capable of determining and publishing strategic plans which it can then impose upon the commissioner and provider. It needs to be able to command the resources necessary for meeting those demands. We can keep the providers and commissioners separate, if we have an intermediate tier, because that can monitor the progress of both of them. It can see what plans come out of the commissioner and what quality standards the provider is meeting. There is some sense in keeping the two separate, because it is unfair on the commissioner to take responsibility for monitoring the services provided simply through its contracts with providers. That structure does not work on its own without adequate finance.

Resources and Rationing

UNISON will continue to campaign to restore financing up to European levels. But what constitutes adequate finance is obviously a difficult problem to solve and I think we will not be able to solve it until we have a far more explicit debate about rationing resources in the NHS. We all know that there has been rationing in the NHS throughout its existence. We know a bit about how rationing takes place but the public in general has not been involved in the debate. In my opinion we will not have any system without some sort of rationing in it. To say that is anathema, that we do not want to talk about it, allows rationing to be carried out without regard to the overall goals that we set ourselves. The monitoring of those goals must take place within the debate on rationing and the criteria we use.

We also need to get back to a debate on the staff and the values of the NHS. The NHS is not just made up of doctors and nurses. Ten percent are doctors, fifty percent are nurses. The other forty percent do vital supporting work. In the late 1980s the service was in crisis over staffing. Directly employed staff were paid very low wages, while large amounts were paid out for agency staff. Apart from the direct financial consequences, this affected the degree of loyalty, commitment and identification with the aims and values of the organisation.

Now a combination of pay rerestructuring at the end of the 1980s and the present recession means that we are not in that situation today. We do not have the large turnover of ancillary workers we then had in parts of the south east. The workforce is much more stable, but that stability has not been accompanied by a sense of security or of being valued. The stability is just because the options of working elsewhere have dried up. Sooner or later the economy will expand and when it does all the problems which brought London to the edge of crisis in the 1980s, and led to excessive expenditure on agency staff, will re-emerge and we will see that morale, instead of just being depressed within the service, turns to a flight from the service. That will affect the ability of the NHS, however constituted, to deliver adequate health care for all the population. The consequence of higher turnover would be to draw off money from patient care. High turnover can only mean a diminution of quality of health care. As a trade union we have campaigned extremely hard both at national level and with individual employing Trusts to ensure that conditions of employment are right, not just because our members want decent conditions, but because if we do not guarantee decent conditions of employment then we cannot guarantee the service. We will fight against low pay and for equality for workers as well as equality for access for us as users. If we can get pay levels and conditions of service sorted out as a trade union and if all us can get the questions of accountability, strategic planning, adequate resources and explicit criteria for how health services are rationed, then we will have a decent service in the late 1990s and beyond.

In the next couple of years UNISON will be working to put the flesh on the bones of these policies, and maybe then if we have a conference on this subject we will be able to speak in more detail of how to achieve the health service that puts behind us the abominations of the market and really lives up to the founding principles on which the health service is based.

Sales Or Service? – TERRY DAVIS

I have been asked this afternoon to give an SHA view on the theme of the conference. I put the emphasis on an SHA view, because there are many different views within the Socialist Health Association.

I think we should begin any discussion about the chaos that we have at the moment and how we are going to apply common sense to the health service -both to its policies and practices and to its structure – by reminding ourselves of the basis on which the Socialist Medical Association was founded. We wanted to have a health service which provided treatment for people, treatment that was available at the time of need, free of charge at the time of need and delivery. The Socialist Medical Association campaigned successfully for years, and we then had a national health service. But it quickly became clear to members of the SMA that this was not enough, and that there was a lot more to health than simply treating people when they were already ill. We had to do something about preventing ill health, which meant tackling its causes. That is why the name of the Socialist Medical Association was changed to the Socialist Health Association in recognition of the evolution in our thinking.

Change – not reform

During the last few years we have been faced with many changes in the NHS. I am delighted that others today have also emphasised that the changes are not reforms. Reforms have good vibrations and imply improvement. These arc not reforms; these are changes. Our immediate reaction and objection to these changes is precisely that they are only concerned with treatment, and that they are motivated by a desire to save money and not to save lives. That is our fundamental objection to what it is happening. It is all about money. Conservatives always say that there is not enough money for everything that people need from the National Health Service. We in the SHA challenge that assumption. Today is not the occasion to discuss with you what we think should be the priorities of a Labour government, but I am not going to let pass unchallenged the assumption that there is never going to be enough money available. It is a question of priorities. Money will always be found for a crisis – such as the Gulf war.

Value for money

Coming to the issue more narrowly, we in the SHA question the suggestion that the changes will even produce value for money. Of course Socialists want value for money. As a member of the Public Accounts Committee, my Parliamentary work is dominated by the search for value for money in public expenditure, and as a Socialist I give no ground to any Conservative in my opposition to the waste of public money. But the difference is this – Conservatives condemn and criticise the waste of taxpayers’ money because they want to use the money to reduce taxes. Socialists condemn the waste of money because we want it to be used for the right priorities – improving and extending public services.

What we now have with these Trusts is nothing to do with getting value for money at all. The Trusts are management buy outs. It isn’t hospitals – the buildings – that are setting up trusts. It is managers who are organising management buy-outs, without any money changing hands. We must be very clear about this open door. In five or ten years from now it would be very easy to say that these thriving, enterprising, management-run hospital trusts should have their reward for enterprise, with the managers being able to buy them with money from finance companies. Quite frankly I see Trusts as opening the door to what are in practice a lot of little businesses.

Market philosophy

Above all, the changes are not only about money. They are about philosophy, about the way we organise society, about political economy. It is about extending the organisation, the principles and the practices of a capitalist economy to something which we have always regarded as the flag bearer of Socialism – the National Health Service. It is about bringing the NHS into a market place, with people buying medical care in the same way they buy food, clothes, shelter, transport and entertainment. Those people with enough wealth, income or insurance (the other growth sector in our economy in the last decade) will be able to purchase their own medical care. And there will be others who will be encouraged to appoint an agent to do it for them. If you are registered with a fundholding GP, that is what you are doing – you are choosing your agent to buy care for you. As for the rest, we have people appointed to do that for us in health authorities, in the same way as public receivers are appointed by the Public Trust Office to manage the financial affairs of people who are incapable of managing their own affairs. That is the future role of the health authority: to purchase medical care for those of us who cannot or will not do it for ourselves.

Then we have the other side – the suppliers, which is what I call the providers, operating like little companies to sell their products in what is a market place, turning the provision of health care into a business. And just like any other business, expanding the product lines which have the most demand and where they can get the most profit, and reducing and closing down products if there is not very much demand – notice the word demand, not need – or they do not make a profit. It is still called a service, but how long is that going to last? Because it is about enabling the management who control these new little firms to maximise their profits, with optimum sales. And this means that if a service which they now do 110 time, makes less profit because of marginal costs than if they only do it 100 times, then good managers in an enterprise economy will only do it 100 times because it is their job to maximise the return on investment. There will not be any consideration of need and there certainly will not be any consideration of real value.

The results of the market philosophy

The result will be two-fold. First, there will be an increasing emphasis on reducing costs – and that is a profit-opportunity for management consultants. The recent scandals in Wessex and the West Midlands are about the money spent on and by management consultants. But much more important for us is that the inevitable result of trying to reduce costs in a labour intensive service is a reduction in wages. People who do the dirty jobs in the NHS will always be under pressure to have their wages reduced. The economics of Timex are being introduced into the NHS. It is about increasing the wages of those with scarce skills and reducing the wages of those who do the less skilled work.

Second, there is going to be much greater emphasis on sales and marketing. When these changes were going through Parliament in 1990 there was a great deal of talk about the inevitable consequences of the internal market being higher administrative costs. Hospitals would be sending invoices to health authorities, payments would be transferred, and job opportunities for accountants would be created. But I don’t think we said often enough that there would also be job opportunities for people with skills in sales and marketing. They will become key people in the operation of hospitals for the rest of this decade under the new structure. It will be about getting contracts from purchasers who are now required to buy from local suppliers. In conurbations in particular, there will be intense competition and so sales and marketing techniques will become essential for the competitors (the suppliers).

Market research

I do not condemn all business and marketing techniques. In the NHS as in other public services there has always been a need for much greater use of market research, to find out what people actually need and want. We have had far too little of that in the NHS over the past fifty years. What we do not want is sales promotion. Hospitals will need to set aside some of their income to generate more income, and we shall see the activities of drug companies being used by what were national health service hospitals, marketing their services to purchasers up and down the country.

If hospitals have a cost advantage because they are in rural areas and can undercut London hospitals, with their high overheads and diseconomies of cramped sites, we will find inevitably that the competition will lead to the expansion and prosperity of some of these small businesses and also inevitably the decline and eventual closure of the losers. In the market some companies go out of business. The purchasers will go for cheapness and not pay too much attention to people who have no voice at all, who will have to go where they are told to go, with no control and no way of telling the health authority they don’t want to be sent far afield.

In the SHA we are not opposed to evolution, to decentralisation, to flexibility or to empowering people at the lowest possible level to take decisions about the service. Nor do we oppose patients being given fixed appointments at a place and time convenient to them, nor carpets on the floors of waiting rooms. But there is no reason whatsoever why these things cannot be provided and could not have been provided in the past by what are now known as directly managed units. It is just that we have not been very good at the way we have treated people. In the SHA we want to focus on the individual and his or her needs. We know that the needs of people are much wider than simply the treatment of an illness or disability that has already developed. The whole thrust should be prevention.

No profit in prevention

Prevention requires, as other speakers have already said, more and better housing. It requires an adequate income, an attack on poverty, better pensions and higher wages.

But the fact is, there is no profit in prevention of ill health. To take just one example: one of the greatest causes of ill health and illness is smoking. There is a profit to be made in selling and marketing cigarettes. There is a profit to be made in treating lung cancer in the private sector. There is no profit in trying to prevent lung cancer. There is no financial return in devising a campaign to persuade people to reduce smoking. So as the result of these changes, health promotion and sickness prevention will continue to get the crumbs.

Planning and accountability

In my view, what we need is a service which responds to the needs of all people and to do that we need to rehabilitate the concept of planning. By planning, we mean that we start with the people. We have a calm, objective assessment of the needs of the people in an area. We then go on to have a rational debate and eventual decision on the priorities of the health service for the people in that area, with the involvement of the people in that area and the involvement of the people who work in the service in that area. There is a difference between involvement and consultation. Consultation means you ask them what they think and you still make up your own mind. What we are talking about is participation, not provision of information, with the ultimate decision being taken by people who are accountable to the people who depend on the service. That is what is called democracy. Now I agree that there is a great deal more to democracy than having elections every four years, but the essential element of accountability is that you do have elections. It is the only way to exercise accountability. You will never get accountability to local people from a health authority appointed by the Secretary of State. The man or woman who appoints the members of a health authority will always have them accountable to him or her.

I want to turn very briefly to two specific points which have been raised during the conference. The first, in response to Andrew Wall, is that because we want to see people elected to health authorities does not mean that we are anti-professional. We are not hostile to people’s training, professionalism and expertise. But we need people who are elected to check the experts and the professionals. Of course you take advantage of their training, but the ultimate responsibility should rest with people elected for that purpose. Let me give one example. I believe that one of the reasons for the great success of what used to be called the London County Council was precisely that we had a generation of Labour politicians who used experts and professionals, but kept them accountable to the people who were elected to govern London. They respected the skills of the people they appointed to run departments but at the end of the day those people were still responsible to the elected councillors of the LCC. And it was a very successful council.

As for the argument about whether you have local government or a special health and social service authority (personally I incline to the latter, as a result of my own experience), perhaps we should try both of them. We should not be afraid of experiments and flexibility. We should not spend a decade arguing over a blueprint for the whole of the United Kingdom. Perhaps we should try both structures, bearing in mind that we are trying to ensure that the people taking decisions are democratically elected and accountable to the people living in an area.

The other theme we have discussed today is the split between purchasers and providers. It seems to me that there are two serious problems with purchaser-provider splits. First, it has become conventional wisdom to apply this to health and social services. But there is a fundamental problem. What do you do if, as a purchaser or planner, there is no one to buy from where you want a service. It seems to me that the only answer is that you must have a reserve power to provide a service you have identified as needed. So there is a fundamental weakness in the rigid division between the two activities.

Second, I draw attention to the fact that most discussion about democracy and accountability in the new structure concentrates on the purchasers. I suggest that there is a case for saying that there needs to be some democratic control over providers as well. There is one great advantage in local government compared with appointed bodies. Elected councillors and MPs can make sure that things are being done fairly. Take one of the most important council departments -housing. An elected councillor can make sure that the allocation of a particular property has been done fairly according to the policies of the Council. We cannot do that with a Housing Association. It is no good having a Council that says we are going to have houses provided by housing associations in a particular area if we cannot then make sure that there is fairness and equity in the allocation of that scarce resource.

These are my thoughts about the themes of the day, but I emphasise again that that they are only one SHA view. There is room for plenty of other points of view within the Socialist Health Association.