Tim Montgomerie has, this morning, proved what I’ve been saying for months; you don’t need to be a lefty to think that the NHS reforms are unnecessary and counterproductive. He’s changed his tune since this time last year but he’s right about this:
Most observers think that meeting “The Nicholson challenge” – £20 billion of essential efficiency savings – was always going to be nightmarishly difficult but that it didn’t require new legislation. Nearly all of the necessary efficiencies could have been delivered with existing powers. That has certainly been the consistent argument of Stephen Dorrell MP, the influential Chairman of the Commons Health Select Committee.
Of all the Coalition’s ideas, its plans for the NHS are the craziest of the lot. I’m prepared to consider the remote possibility that expansionary fiscal contraction might work in the end. It may be that, through some kind of alchemy involving social enterprises, localism, devolution and the Big Society, council services can be made more efficient, though I doubt whether, at the same time, they will become more effective. But I’m as certain as anyone can be that there is no way the government’s NHS plans will do anything other than simultaneously make the service more expensive and screw it up.
The week after the proposals were published, my back-of-a-fag-packet guess, based on figures from those well-known left-wingers, Civitas and Manchester Business School, was that, even if everything went to plan, it would take until the second half of this decade for the NHS to return to its current levels of productivity and for the reorganisation to pay for itself. That’s before factoring in the £20bn savings demanded by the Nicholson Challenge.
People who know more about it than I do can argue about whether Andrew Lansley’s bill will lead to the creeping privatisation of the NHS or whether exposing the service to EU competition law will lead to a market free-for-all and the dismemberment of the service. Opinion is divided on this, to say the least.
However, after two decades of studying, reading about and doing corporate reorganisations, I can say with confidence that a root and branch reform of an organisation as complex as the NHS cannot be done at the same time as achieving 4 percent efficiency savings and maintaining current levels of service. At least one of the three, and most probably two of the three, will have to give. My money would be on service levels and efficiency savings taking second and third places to the restructure.
As I said last year, 4 percent per year is a tall order even for service organisations that are used to making efficiency improvements. Pile a major restructure on top and your chances of achieving them are even slimmer. And so it has proved.
Perhaps, now that warnings against the reforms from the right are getting louder, the government might reconsider, though a lot of the damage has already been done. Whether David Cameron will kill the bill depends on a political calculation; will it be more damaging to do a massive u-turn or to wreck what most people still think of as one of the great achievements of the post-war years? Early signs, though, suggest that the Conservatives will stick with it.
Hopefully, wiser heads will prevail. Every government is allowed one humiliating volte-face and, of all its policies, this is the one that the Coalition should dump. The NHS reforms are bonkers. They will cost a bomb and achieve nothing. It’s not just left-wingers and NHS insiders telling the government that they won’t work. When even its own supporters think that it is about to severely damage the health service, surely it’s time for the government to change its mind.