For any government contemplating NHS reform, the 2012 Health and Social Care Act is a textbook case of what not to do. Despite promises of “no more pointless reorganisations”, the Tory health secretary Andrew Lansley did just that, abolishing management tiers and imposing new care commissioning and competition systems on reluctant doctors.
The whole thing was a political nightmare that wasted resources, demoralised staff and undermined public confidence. In an independent report published earlier this year, Lord Darzi described the Lansley method as “scorched earth”, from which NHS management capacity has not yet fully recovered. And that was before the full social cost of austerity had weighed on the health service, and before it had been battered by the Covid pandemic.
The difficult task of rehabilitation now falls to Wes Streeting, the current health secretary. He has some money to spend. The chancellor recently boosted his departmental budget by £22.6bn over the next two years. But the quid pro quo is reform. Given past experience, it is hardly surprising that weary NHS staff flinch at the very word. But many also recognise that current systems aren’t working and that limited resources could be better deployed. That is the message Mr Streeting delivered to NHS leaders on Wednesday. There will be a new regime of performance evaluation, with league tables.
Underperforming bosses will be ineligible for pay rises and could face removal. NHS trusts that manage their budgets astutely will be able to retain and invest their surpluses instead of feeding them back into the central pot. This regime is meant to reward practices that boost productivity, which is currently dire. Infusions of money in recent years have kept the NHS afloat but not translated into better service.
Mr Streeting’s ambition is modest in scale compared with the Lansley approach, but it still entails disruption and is sure to meet resistance – some from a place of justified scepticism, some expressing an automatic aversion to change.
Hackles will be raised across the political spectrum. The element of competition between trusts, the whiff of market incentives, will draw opprobrium from the left. On the right, enthusiasts for a more robust market-driven approach will complain that bureaucratic evaluation and not consumer choice is the instrument for discerning success.
The term “Blairite” will be applied, usually with pejorative intent. That designation gains credence from the appointment of Alan Milburn, a New Labour-era health secretary, to advise his former department. But old labels, provoking old animosities, can obscure more than they illuminate.
There are certainly lessons that Mr Streeting should learn from the last Labour government’s mixed record of public sector reform. He must be especially wary of the perverse unintended consequences that league tables can generate. Gaming the system to rise up the rankings might not equate to better service for patients.
But it is also true that well-paid public sector managers should be accountable and judged by performance. Failure should have consequences. How that discipline is enforced, whether it really translates into a better NHS, will depend on precise elements of design in the reforms and ministerial readiness to adapt if it isn’t working.
A reform programme that starts from a position of ideological zeal and ignores what is actually happening on the ground is a recipe for failure, as Mr Lansley proved. This time around, when judging Mr Streeting’s plan, attention to detail, following evidence of improved service, not ideological dogma, should be the guiding principle for critics and supporters alike.
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