A fresh start for the NHS – a new sense of direction to regain the confidence of patients, the public and NHS staff

September 2006


The Socialist Health Association was established in 1930 to campaign for the establishment of a free National Health Service. Our members then thought that the Labour Party represented the only realistic mechanism for realising their ambition. 76 years later our members still think that keeping the Labour Party in power represents the best political option for developing the sort of health service we want to see. But like the rest of the population some of us are beginning to wonder what sort of NHS Labour wants to produce.

We are not opposed to reform, but the way the reform programme has been handled in the NHS has inflicted unnecessary political damage. What is needed to reform a complex organisation like the NHS is a clear sense of direction. In the NHS we have seen 9 significant reorganisations since 1997. Each one sets back the organisations involved by a couple of years. Staff do not commit themselves to the latest reform because they have good reason to expect that another round of reform will be along soon.

The failure to produce a clear vision for the future of the NHS and the lack of any real debate about difficult issues in health led in May, probably for the first time since 1946, to the Conservative Party being regarded as a safer bet to preserve the NHS than the Labour Party. 40% of the population seem to think that the NHS should be run without any regard to financial limitations or efficiency, and this appears to include some parts of the medical profession. Dozens of ‘Save Our NHS’ groups have sprung up, linked to the ‘Keep Our NHS Public’ campaign launched in 2005. While KONP supports local groups opposing service cuts their primary focus is on what they characterise as privatisation of large sections of the NHS. These campaigns have certainly added to the impression that the NHS under Labour is failing. An extensive programme of hospital closures and reconfiguration over the next couple of years, while no surprise, will obviously generate immense hostility and make it very easy for our opponents to go on the attack.

The Government has succeeded in upsetting large parts of the NHS workforce, much of which traditionally supported Labour. The investment of enormous sums of money into the NHS has not resulted in much political gain. Not only are the staff worried that their terms and conditions will be undermined because of competition from private providers, but the management and Board members are disillusioned by continual and seemingly pointless reorganisations. Despite much reduced waiting times, a huge hospital building programme and record volumes of clinical activity the statement by Health Secretary Patricia Hewitt in April that the NHS had “had it’s best year ever” came across as completely out of touch with the mood of both the public and NHS staff. The abolition, first of Community Health Councils and now of Patient Forums, gives the impression that the Government is anxious to avoid independent scrutiny, so although patients are generally impressed with the service they get there is no independent or credible voice to speak on their behalf.

Prevention of ill health is more important than the provision of health care and that needs to be tackled largely outside the NHS. Labour has made enormous progress in public health measures – the forthcoming smoking ban, the huge increase in economic prosperity (the most important determinant of health and wellbeing)-, and the considerable increase in support for the most disadvantaged children and immense increases in expenditure on education and improvements to school meals. But again there seems to have been little political capital as result of this investment because the impression given, for example with the smoking ban, is that these measures have been forced out of an unwilling government. Although many policies have been announced which would improve public health the reality is that in many areas public health initiatives have been sacrificed on the altar of hospital deficits.


The NHS has always made extensive use of private contractors – the ‘independent contractor’ status of GPs, the pharmaceutical industry and hospital construction, but the third term Labour Government has sought to expand this.

Rather than simply using private sector capacity to supplement the NHS (for example in waiting list initiatives) contracts were been agreed to run ISTC’s (Independent Sector Diagnostic and Treatment Centres) designed to compete with NHS services, e.g. in ophthalmic surgery.. This hiving off of high volume, planned and generally more straightforward clinical work causes concern over staff training, emergency capacity and care for more complex cases – all of which previously relied upon work diverted to the ISTCs. The requirement under Patient Choice to include privately provided options is a clear attempt to bring the private sector in to challenge NHS provision. PCTs are required to ensure that private sector treatment is available to their patients even when there is no shortage of capacity in the NHS. Contracts are constructed in such a way that the private provider get a guaranteed income even if they do no work. At the same time NHS hospitals are forced to close wards if they cannot attract enough patients.

Under the new GP contract companies are now being encouraged to run GP services, positioning themselves to take advantage of Practice Based Commissioning. The complex tendering process seems designed to ensure that local GP surgeries will never win such contracts.

Most concerning of all was the invitation to bid to provide management functions for Primary Care Trusts put in the Official Journal of the European Union (OJEU) in June. This included the transfer of many commissioning functions – decisions about what services would be provided and who would provide them. Although PCTs would remain legally responsible for the services they choose to commission all the preparation and option appraisal could be done by US companies like Kaiser Permanente and United Health. Though withdrawn and modified the inclusion of the statement that the NHS was “changing from a providing to a commissioning service” confirmed the widespread suspicion that some ministers and certainly many of their advisors see the future of the NHS to be as a franchise scheme. Although services would remain free at the point of use fewer services would be directly provided.

Is there any merit in a more market based approach?

The SHA considers that the effects of reform should be measured against three considerations:

1. Inequalities

The reduction of health inequality is very important to us. We want to see a substantial shift of health resources to the most deprived areas, and we accept that this will generate protests in more prosperous areas which have had more than their fair share in the past. We have conducted a detailed investigation into the effect of choice and our assessment was that marketising the NHS would have a significant negative impact and thus cannot be supported. A more complex healthcare service, where more choice is available will inevitably mean that those with more resources will take advantage of those choices. In particular, we believe that it will result in increased inequalities in health by aggravating existing inequalities of access to services. We think that this far outweighs any putative benefits which might accrue from the introduction of competition. If properly funded advice and advocacy services were provided to ensure that people with fewer resources were helped to exercise informed choice, and if the cost of travel was met, then it might be that choice would reduce inequality. However it is quite clear that these services are not going to be provided.

2. Integration of care

There has been far too much attention paid to the management of planned surgery. 80% of the NHS expenditure goes on acute and chronic medical care. The key to delivery here is the integration of care. The Department of Health decided in 2002 that “By placing both NHS responsibilities and local authority health responsibilities under a single management, care trusts can offer a more efficient and better integrated service.” We agree with this. We cannot see how the introduction of competing private sector providers can possibly be an improvement in this area.

3. User charges

There have already been worrying instances of NHS providers charging for services as an “extra” which should have been, but are not, available freely. Private sector providers are clearly more likely to be tempted down that route. There are repeated call for the introduction of a more extensive charging regime, and so far the Government has resisted them. However the NHS charges which exist have no rational basis and are intellectually indefensible. It may be that we will have to have a debate at some point about what services should be provided freely as part of the NHS, but if that happens it must be open and honest, not introduced covertly.

Overriding Principles for the Provision of Healthcare

  • We believe that healthcare must continue to be provided free at the point of delivery purely on the basis of clinically determined need; that it should be organised to meet individual and community needs; and provided through democratically accountable bodies answerable to the people they serve through elected representatives.
  • We believe that ‘valued staff value people’. This means services should be delivered by staff with terms and conditions in line with the NHS Agenda for Change agreement and trade unions should be fully recognised in any unit or organisation providing NHS services.
  • Every healthcare provider should provide services that are safe and effective, demonstrate clear value for money, and provide both clinical interventions and support services which are perceived to be of high quality by the people receiving them.
  • Every healthcare encounter in each healthcare setting should take full advantage of the opportunities for lifestyle counselling in pursuit of the prevention of disease and the promotion of health and wellbeing.
  • The reduction in inequalities in access to healthcare must be a prime objective for the NHS, as its contribution to the reduction in overall inequalities in health.
  • We consider that the NHS has, over the last 60 years, developed a culture and way of working – the public sector ethos – comprising among other things, compassion, pride in ones work, selflessness and a feeling of belonging to a worthwhile and much valued organization, which is uncommon in the private sector and which is worth retaining and developing because it adds value to the service delivered to the patient / user. We recognize however that issues of competence, efficiency and effectiveness are as relevant in the public sector as in the private sector and that this has not always been understood.

Key elements of a new direction of travel

We believe that immediate action must be taken on some elements of the marketisation agenda while wider debate takes place about the details of a new direction of travel for the NHS :

1. Discontinue the second phase of the ISTC programme

2. Discontinue all contracts with private (i.e. for profit) acute sector providers for routine work and the obligation on PCTs to offer a private sector option under ‘Patient Choice’ / ‘Choose & Book’. While any contracts with the private sector are in operation the detailed terms must be open to public scrutiny.

3. Discontinue use of the Private Finance Initiative (PFI) as the main method and source of finance for new hospital building

4. Stop the roll out of Payment By Results until it is clear what effects it has had.

5. Discontinue the plan to privatise PCT commissioning support functions

6. Re-define the obligation on Trusts to be in balance by April 2007 to one of working towards an in-year balance with no requirement to clear historic debt; and regard significant reduction in deficits as an achievement rather than a failure.

7. Place a clear obligation on all NHS bodies (including Foundation Trusts) to cooperate rather than compete with other parts of the NHS – the autonomy of Foundation Trusts with their separate accountability to the ‘Monitor’ regulator has caused concern over the dissemination of good practice and clinical innovation within the wider service

Agreeing to these immediate actions would send a clear signal to the NHS and public of a clear change in direction and would, we believe, be widely popular outside the right-wing press, management consultants and those think-tanks for whom consultancy has proved a profitable side-line in recent years.

And then what … ?

At this stage we only have a sketchy view of what a new direction of travel for the NHS might look like – a wider debate is necessary to properly inform it. Below are some elements of such a direction of travel which we consider to be important and which we would wish to see included:

1. Devolved Democratic Responsibility and Accountability – elected local unitary councils and regional authorities should significantly extend their role in the planning of health services for their populations and develop their public health role, as set out below. New models of local responsibility and accountability structures for bodies providing services, such as directly elected Health Boards and Trusts should be piloted.

2. Clear separation of the current commissioning and service provision / coordination functions of PCTs. The existing Boards of Primary Care Trusts should have as their principal focus the provision of direct primary care services such as health visiting and district nursing and the oversight of GP-provided services. Accountability for current PCTs commissioning functions should be transferred to local authorities.

3. A rigorous assessment of the advantages and disadvantages of commissioning as compared with direct management, which existed universally in the NHS before 1990. Although commissioning and a purchaser-provider split has allowed specialist Trusts (e.g. Mental Health Trusts) to develop, the additional costs and bureaucracy should be rigorously evaluated, particularly in the light of Scottish experience and the recent Kerr Report on the new NHS management arrangements in Scotland.

4. A moratorium on nationally mandated structural change for at least 5 years As soon as what is designed to be a minimally disruptive change at point 2 has taken place. In recent years the NHS has seen new initiatives and arrangements launched before previous ones have been fully rolled out nationally, let alone evaluated. This has to stop. Such an embargo would not of course preclude local changes services to meet locally agreed needs

5. All health and social care to be free in all settings i.e. domiciliary, day and residential / nursing home care – as it is not possible or sensible to try and separate social and health care when they are provided together in a fully integrated way which is what the patient / client needs.

6. Cooperation and integration of services are the keys to providing effective packages of care, not competition and choice which inevitably operate in the opposite direction.

7. Reprovision of mental health and related services currently provided by the private sector either in-house or with not for profit providers – the current dependence on the private sector for specialist mental health and related services exists only because not enough effort has been put into in-house or not for profit provision. Establishing such provision must be a priority.

8. Providing acute hospital sited alternatives to Independent Treatment Centres. Stand alone Independent Treatment Centres make it impossible for their facilities to be available for use in high pressure circumstances such as a Flu epidemic. Flexibility of use of all acute facilities must be the objective and with appropriate admission planning and bed management techniques this should not result in the encroachment on elective admissions by emergency admissions that has been advanced as an argument for stand alone elective facilities.

9. Greater focus on community management of chronic health problems, including greater patient / service user involvement in care planning and Expert Patient programmes. One of the keys to this is the roll out of the Unified Assessment Process. This is not a new agenda but one which has failed to make progress because of the impact of that well known NHS syndrome of the “urgent” driving out the important. Another key is the implementation of the National Programme for IT, which must be defended. We also acknowledge that this may well involve transferring resources out of hospitals into the community.

10. Not for profit providers could be acceptable as an alternative to NHS providers subject to a critical appraisal of their effectiveness, accountability, contribution to integrated services and staff training and their capacity for innovation.

11. PFI/PPP was a necessary temporary measure to make major capital investment in the under-invested NHS very quickly but it must not be a permanent feature of NHS capital funding. Action must be taken to mitigate the revenue funding / mortgage repayment problems of the hospitals and ‘health communities’ which have had PFI/PPP schemes

12. Disengagement of Westminster and Whitehall from the day to day running of the NHS. With the increased political accountability at local level proposed at 1 above, the need for central political accountability will decrease and the role of the Department of Health will change to that of providing an overall policy and strategic framework for the NHS in contrast to centralised micro-management. The central NHS executive function to the extent that such a function is still necessary when there is so much more local political accountability might well be undertaken by an arms length body, an NHS Public Corporation somewhat analogous to the arrangements between the Treasury and the Bank of England in respect of national monetary policy.