There will be an NHS crisis soon - regardless of what happens to the health bill

by Paul Goodman

I wrote for the Guardian yesterday about the health bill.  There are three important points to make about the bill, NHS reform and the politics of both.  I didn't cover them all, but here they are now.

• Some senior Conservatives want the bill to be overhauled as much as most Liberal Democrats - maybe more.  True, Liberal Democrat backbenchers are demanding changes: over 20 didn't vote to support it on Monday in the Commons.  And true, too, that Conservative backbenchers are backing Lansley, publicly at least.  When he made his Commons statement in April announcing a "pause" in the legislation, only two Tories welcomed the news outright and ten lined up behind the Health Secretary's plans. 

But the full picture is more complex.  Only a single Liberal Democrat backbencher voted against the bill's second reading.  One of his colleagues, Paul Burstow, is a Health Minister and therefore played his part in supporting Lansley's original proposals.  Nick Clegg himself signed the white paper that presaged it.  In opposition, he said: "I think breaking up the NHS is exactly what you need to do to make it a more responsive service", and indicated that replacing it with a social insurance system shouldn't be ruled out.  In the meanwhile, George Osborne has been a sceptic from the start about the bill, for both financial and political reasons.  He is stressing that Conservatives as much as Liberal Democrats must "own" the pause.  Rachel Sylvester reported from behind the Times paywall recently that though Lansley wins support from his side in the chamber, Tory MPs are more sceptical in private.

• The G.P commissioning scheme has never been the only reform plan on the table.  The Health Secretary's original ideal had a certain elegance.  Under it, the Government would meet the "Nicholson Challenge" - finding £4 billion of savings a year from the NHS budget, an economy unprecedented in the service's history - by in effect making GP fundholding compulsory and abolishing Primary Care Trusts by 2013.  The bureaucratic savings and increased competition would cut costs.

The Treasury was sceptical about the scheme from the first, questioning whether the staff shed by PCT abolition would be re-absorbed by the new GP bodies.  Nor did the plan command a consensus among the free market think-tanks: Civitas warned last December that it would make driving up productivity harder, not easier.  But whatever one's view, it must be recognised that Lansley's initial scheme is dead in the water.  GPs won't be commissioning alone: Lansley referred in the Commons on Monday "to health professionals designing integrated pathways of care".  So instead of the Health Secretary's GP-led, competition-driven model, the NHS will get what looks like revised PCTs with more local control, plus more joining up of social care.  Lansley's always supported the latter, but the package as a whole looks to be more like that championed by Stephen Dorrell's Health Select Committee.

• Whatever reform plan is put in place, an "NHS crisis" will happen before it comes into effect.  One can argue back-and-forth about whether the original G.P commissioning scheme would be more likely to cut costs and improve services than its successor.  But informed supporters of both will agree that neither scheme (nor any other) will avert an old-fashioned "NHS crisis", complete with harrowing personal stories, bed shortages, closed wards, ambulances unable to discharge their patients at hospitals, and Labour shroud-waving - soon.

The reason for this is timing.  The "pause" will prolong the progress of the NHS Bill through Parliament.  But even if it wasn't happening, one must recognise that reforms take time to work their way through any system, particularly one as gargantuan and wasteful as the NHS (see Julia Manning's report which we covered today).  And unfortunately, short-term financial pressures are felt faster in such systems than medium-term structural reform (which, arguably, didn't require a bill in Parliament at all).  The NHS budget is set to rise at 0.1% a year during the Coalition's planned term.  There's disagreement over whether this will be the real-terms increase promised by the Government.  But no doubt that it represents smallest series of rises in the NHS's history: during the Blair and Brown borrowing binge, NHS spending was increasing by some 6 per cent a year.  At some point, the slowing-down of money will be followed by the "crisis".  When?  I can't find the original quote, but Nick Bosanquet is reported to have predicted November 1 of this year.