Andrew Lansley wins Treasury battle - and revives GP fundholding

When I wrote yesterday about the Prime Minister's proposed localist revolution, some readers were extremely sceptical about whether it will happen.  They cited the central resistance to devolving power which usually grips governments sooner or later.  As it happens, I'd offered an example myself - namely, the Treasury holding up Andrew Lansley's Health White Paper.  This morning, the Daily Telegraph reports that the delay's over.  The Prime Minister's backed up his Health Secretary.  GPs are to take over the role of health authorities in buying hospital services for their patients.

Those strategic regional authorities and primary care trusts are to be scrapped.  Doctors will take over their budgets, worth up to £80 billion.  The nervous Treasury has been assured that "safeguards" are in place for this vast sum of money.  GPs may come together to form commissioning co-operatives, and responsibility will be returned to them for out of hours care.  In short, the plan is the return of GP fundholding, a Thatcher Government policy, under another guise.  But whereas fundholding was voluntary, the new move will be compulsory.  Cameron's therefore taking it further than Thatcher did - as Tony Blair tried to, before Gordon Brown blocked him.

The Guardian says in its report that not all GPs will welcome the scheme, because some will want concentrate on patient care rather than financial management.  My impression as a local MP during the last two Parliaments was that most GPs, and especially the more innovative and enterprising ones, liked the fundholding scheme and wanted it back.  The BMA and the Royal College of Practitioners are expected to welcome the changes.  There's also to be a new contract for GPs.  Tens and thousands of jobs in the abolished authorities are to go.

Localism entails risk.  Not every GP is a born financial manager, and mistakes are bound to be made.  A lot will depend on the strength of the safeguards that Lansley and Osborne have negotiated.  There may well be trouble ahead with the new GPs' contract: for government to agree one with any profession is never easy, and doctors, having extracted what many saw as a favourable deal from Labour, will scrap for their interests vigorously.  (Ken Clarke, in his days as Health Secretary, once accused doctors - with characteristic lack of tact - of "feeling for their wallets" when he suggested reform.)

But the key question's whether the risks of fundholding outweigh the likelihood of stagnation under the bureaucracies.  In a state-provided healthcare system, there'll always be a limit on how much the taxpayer will stump up, and there can never be a hospital at the end of every street.  None the less, Labour's healthcare restructuring made the NHS worse: in Wycombe, unaccountable managers came and went, services were axed after bogus "consultations", and the sense of local ownership withered further.  The perpetutal tinkering was like permanent revolution in Mao's China.  (For example, primary care groups were replaced by primary care trusts which in turn were replaced by a single primary care trust - all in less than ten years.)

Similar arranging and re-arranging of the healthcare furniture would be fatal.  Behind the shelter of his protected budget, Lansley has the chance to make a few big changes now, and let them bed down over the next few years.  Blair's foundation hospitals, pushed through the Commons on the back of Conservative votes, at least ensure that elected local people have the responsibility for planning hospital services, and the restoration of fundholding is a good matching move.  After Lansley's announcement this morning, the case for believing that the Coalition Government won't loosen central control looks a bit weaker than it did yesterday.

Paul Goodman