National Health Service: Sustainability

Lord Warner Excerpts

Thursday 9th July 2015 Lords Chamber

[Lord Warner (Lab)]

My Lords, I, too, congratulate the noble Lord on securing this timely debate. As usual, his analysis was impeccable and very much to the point. We have just completed an election campaign in which undying love was professed by all the parties for the NHS and more money was promised—£8 billion to be precise, as the Chancellor said yesterday, for the period to 2020. Nevertheless, we have to move quickly now to tackle the rapidly deteriorating NHS finances, even with an extra £2 billion in prospect for the current financial year. We must also seriously up the tempo of service reform, because we have a linked cash and care crisis.

On the care side, we at least have a plan—the five-year forward view—and a chief executive capable of implementing it, if he is allowed to do so. But the NHS has to be turned round very fast indeed, with much more emphasis on preventing ill health and much more care and treatment being provided in the community rather than in hospitals. Staff need to work in radically different ways, with much greater use of technology by a too-often luddite NHS. The budgets and care delivery of the NHS and social care must be integrated rapidly, both nationally and locally. Unchanging and failing providers have to be replaced much faster than we have been willing to do so far, with a willingness to use competition to do this. It is worth remembering that 60% of the public simply do not care whether their NHS services are provided by the public or the private sector.

The key question now is whether the five-year forward view will resolve the NHS’s major productivity problem, whereby it produces the wrong services in the wrong way and in the wrong places. It needs an annual productivity gain of at least 2.3% stretching over the next decade. The best it has achieved in any recent year is 1.5%, and the average for the last Parliament was under 1%. Most of that was achieved by curbing staff pay, a policy that is to be continued for the rest of this Parliament. The acute and specialist hospitals are the worst offenders, with an annual productivity gain averaging 0.4% over the last Parliament—do not believe me, believe the Health Foundation.

Unconditionally pumping more money into an unreformed NHS is probably the worst thing any Government could do, not least because the public have rumbled NHS inefficiency. The 2014 British Social Attitudes survey shows that over half the public thought the NHS wasted money. They have not yet rumbled the NHS’s track record on avoidable deaths that the noble Lord, Lord Patel, pointed out.

We must always remember that the best predictor of future behaviour is past behaviour. The jury must definitely be out as to whether the NHS, even under its new leadership, is capable of delivering, or willing to deliver, the £22 billion of productivity gain by 2020 promised in the five-year forward view and now apparently being relied on by the Government.

If the NHS fails, as I think it will, do the Government increase borrowing, cut other public services further or raise taxes? Without any of these, they will have to face up to finding new streams of revenue or reducing the NHS service offer. Those are the hard facts of economic life. Even if—it is unlikely—the Government manage to wriggle their way through to 2020 without making hard choices on the NHS, the Office for Budget Responsibility forecasts show that the NHS financial challenges will last very much longer than this Parliament.

Our tax-funded, largely free at the point of clinical need NHS is rapidly approaching an existential moment. The voices of dissent and outrage will no doubt be deafening but a wise Government should begin now the process of helping the public engage in a discourse about future funding of the NHS. To do that requires a measure of cross-party consensus on some form of authoritative independent inquiry that could produce analysis and a range of options for a way forward. As the noble Lord, Lord Fowler, said, the start of a new Parliament is the right time to start this process for both Government and Opposition. Let us try to avoid weaponising the NHS—to use a phrase—and show a bit of political maturity from both Government and Opposition.