For any government considering reform of the NHS, the Health and Social Care Act 2012 is a textbook example of what not to do. Despite promises of “no more pointless reorganisations”, Tory Health Secretary Andrew Lansley did just that, abolishing levels of management and imposing new systems of care and competition on reluctant doctors.
The whole thing was a political nightmare that wasted resources, demoralized staff and undermined public confidence. In an independent report published earlier this year, Lord Darzi described the Lansley Method as “scorched earth”, of which the management capacity of the NHS has not yet been fully recovered. And that was before the full social costs of cuts had weighed on the health care system, and before it had been hit by the Covid pandemic.
The difficult task of rehabilitation now falls to Wes Streeting, the current Minister of Health. He has some money to spend. The chancellor recently increased his departmental budget by £22.6 billion over the next two years. But the return is reform. Given past experience, it is not surprising that weary NHS staff recoil at the very word. But many also recognize that current systems are not working and that limited resources could be better deployed. That is Mr Streeting’s message delivered to NHS leaders on Wednesday. There will be a new performance evaluation regime, with rankings.
Underperforming bosses are not eligible for raises and can be fired. NHS trusts that manage their budgets smartly will be able to retain and invest their surpluses rather than returning them to the central pot. This regime is intended to reward practices that increase productivity, which is currently urgent. The cash injections of recent years have kept the NHS afloat, but have not translated into better services.
Mr Streeting’s ambition is modest in scale compared to Lansley’s approach, but it still involves disruption and is certain to meet resistance – some from a place of justified skepticism, others expressing an automatic aversion to change.
Hackles will be brought up across the political spectrum. The element of competition between trusts, the smell of market incentives, will attract opprobrium from the left. On the right, enthusiasts of a more robust, market-driven approach will complain that bureaucratic evaluation, not consumer choice, is the tool to measure success.
The term “Blairite” will be applied, usually with pejorative intent. That appointment is given credibility by the appointment of Alan Milburn, a New Labor-era health secretary, to advise his former department. But old labels, which provoke old animosities, can obscure more than they illuminate.
There are certainly lessons that Mr Streeting should learn from the last Labor government’s mixed record on public sector reform. He should be especially wary of the perverse unintended consequences that rankings can generate. Gaming the system to move up the rankings may not equate to better patient service.
But it is also true that well-paid public sector managers are accountable and judged on the basis of their performance. Failure must have consequences. How that discipline is enforced, and whether it actually translates into a better NHS, will depend on the precise design elements of the reforms and ministers’ willingness to adapt if it doesn’t work.
A reform program 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, in assessing Mr. Streeting’s plan, attention to detail, following evidence of improved services, and not ideological dogma, should be the guiding principle for critics and supporters alike.
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