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Wednesday, 19th November 2008

Cameron can slow NHS spending

Fraser Nelson 4:07pm

Most debates about what the Tories should do are split between what’s right, and what would go down well to win elections. I believe that strong parties start with the former, and work up a way of converting it to the latter. This is why I disagree with James. Refusing to match Labour on health spending in 2010/11 has indeed left the Tories open to the accusation – levelled against Michael Howard in 2005 – that they’ll shut schools and hospitals. James regards this as an unnecessary hostage to fortune.

The Tories should no longer be afraid of this for three reasons. First, it’s a lie. Next, it is Labour that closes schools and hospitals, and Cameron should welcome a chance to remind the electorate of this. Thirdly, I suspect Labour will cut to near-zero NHS expenditure because it’s the easiest way to save money. We need to break away from this idea that health spending is a good in itself. The NHS should be judged by what it does, not how much it costs. Its internal market shows signs of hyperinflation of basic operation prices: is this a yardstick of success? Or too much money chasing a worryingly finite supply?

UK health spending can no longer be described as parsimonious. In 2006 we spent 8.4% of GDP on health v 6.8% in 1997 (detailed ONS study here) and while there is no updated data it’ll be probably be nearer 9% next year. (If I were the Tories, I’d build a 2009/10 figure to make this point. You can do it by taking this pdf and extrapolating NHS forecasts, which are about 80% of total). It’s as much as the average continental European country spends on health, and their tax rates are far higher than ours. Blair’s famous Frost Sofa declaration that he’d take UK health spending to European levels was then seen as so wild a pledge that Alastair Campbell later had to dismiss it as an ambition, not a target (and Brown responded by shouting at Blair "you’ve spent my f***ing budget"). This target has now been reached. Cameron says he’ll keep real-terms increase in NHS spending, which will push its ratio of our (falling) GDP even higher. That’s as much as any responsible government could or should promise.  Trees do not grow up to the sky, as Eric Cantona once said. Neither should health spending. That is why Cameron is right.

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seb

November 19th, 2008 4:32pm Report this comment

Labour will inevitably accuse the Tories of wanting to close schools and hospitals. The birthday card microchip where Labour's brain ought to be has said nothing else for years. Honest but overly complex denials from Cameron are likely to pass unregarded by millions of voters. The accusation is emotive, billboard stuff while the rebuttal requires voters to listen and pay attention. Fat chance.

Election time is closing in and the Tory message has to be simple, i.e. that NHS and schools' spending will be [magically] ringfenced at the expense of wasteful programs that the voters have heard about and want slashed. Some voters may be dim but even the dimmest can understand the need for a form of war-time type prioritisation of spending and there is no end of barmy, unpopular New Labour schemes that can be ditched.

The third paragraph of Fraser's piece reads like a Time magazine article and would mean nothing to Joe Q. Sunreader.

THX1138

November 19th, 2008 4:59pm Report this comment

No he can't. No one can. If he promises that he's lying.

Fraser is always wrong on economic matters. Remember those long posts on the spectre of high inflation a few weeks ago & how the UK economy could decouple from the oil price shock.

Stick to politics.

StephenDC

November 19th, 2008 5:01pm Report this comment

Good article, but the claim about "it is Labour that closes schools and hospitals" does you no credit at all, and shouldnt come after a bold claim about lies.

Services in ths NHS sometimes have to change for good clinical reasons (e.g. surgery becomes more specialist, or care for people with long-term conditions can be done better in their homes).

To dress these up as "closures" or "cuts" is a terrible distortion and one of the chief enemies of real productivity improvement in the NHS.

In fact it is the kind of easy NHS politics which Cameron and Lansley have been playing that lets us know they are not serious about NHS reform in the same way as Blair was.

HJ

November 19th, 2008 5:05pm Report this comment

"I suspect Labour will cut to near-zero NHS expenditure because it’s the easiest way to save money" What, they're going to stop funding the NHS? Some exaggeration surely, although only a Labour govt has ever cut NHS spending.

In any case, don't confuse 'health' and the NHS. There is little or no correlation between spending on medical care and the health of the population. Many other factors have much greater impact on health, so constantly spending more on the NHS wouldn't yield much health improvement even were it not so hopelessly inefficient.

Susan Hill

November 19th, 2008 5:58pm Report this comment

If any of them wanted to know precisely how to save a very great deal of money in the NHS they should bring in Gerry Robinson on a full-time contract to do it. Did anyone see his TV programmes on the subject ? He managed to save the hospital in question a fortune simply by addressing waste and inefficiency, not cutting jobs in either management or medical staff, just getting the ridiculous system to work properly. A tiny child could see what needed to be done - it made you weep. Robinson could teach teams to go in and apply his principles and practice to the entire NHS. Mind you, whether he would want the job is a moot point.

TGF UKIP

November 19th, 2008 7:55pm Report this comment

Fraser, you and Dave can extrapolate ONS and NHS figures as much as you like or Dave could simply ask the voters "The NHS now costs every household in this country £4,000 per year, do you think you get £4,000 worth of taxpayer value from the way the NHS is run?"

I've long ago come to the conclusion that Dave and Boy George have carefully avoided reading David Craig's book because it would force them to face up to what they should really be saying.

The public know there are buckets of billions wasted in the NHS as polls have clearly shown.

As it is, I'm still unclear. Is Dave, for once, prepared to argue the point or is the NHS "ringfenced"?

Fraser Nelson

November 19th, 2008 10:06pm Report this comment

StephenDC, it's really not lies. I agree there is much-needed NHS rationalisation but this has gone too far with services concentrated in large sprawling hospitals for bureaucratic convenience rather than serving the public. There are several well-documented examples of maternity wards etc closing.

Ditto schools: since 1997 there have been on average 23 secondary school closures a year and 94 primary school closures (net) a year. This is the "vote Labour for Schools and Hospitals" party.

StephenDC

November 19th, 2008 11:55pm Report this comment

Indeed Fraser, the hypocrisy of the new labour position is not lost on me.

I simply make the point that by taking the route of easy politics over necessary NHS changes, lansley has put himself on the wrong side of the debate about productivity ad improvement in the NHS.

It's a sore subject with me. I work many years as a consultant including with the NHS - and have seen first hand how much can be improved by changes which are blocked for political reasons or worst still, never even considered for political reasons.

Kevyn Bodman

November 20th, 2008 3:52am Report this comment

An interesting point from Susan Hill above.
I haven't seen the TV programmes.
Sending in teams to implement these ideas raises suspicions that they would grow into 'NHS Efficiency Consultants, Co-ordinators and Inspectors.'
More such teams are not what is needed.
How about sending DVDs of the programmes to every NHS hospital, requiring management to ensure that they are viewed by all workers over the course of a month and then setting for the hospitals targets of a reasonable percentage saving.
The DVDs would have to be shown to all workers to prevent management restricting access to the ideas they contain and then implementing policies that are in the interests of the managers rather than the hospitals.
I've seen enough managers in public and private sectors looking after their own interests rather than those of the dapartment or company not to trust them.

THX1138

November 20th, 2008 9:32am Report this comment

Susan & Kevyn as Gerry Robinson was head honcho at Grand Met & Compass his job was to sell cheap junk food and alcohol to the nation. In this capacity has done more that his fair share to make sure that the NHS is busier than ever.

If Dave really does want to save money in the NHS the first thing he should do is cancel the giant white elephant that is the IT project "Connecting for Health" an immediate £5 billion saving and not make an iota of difference to patient care.

A mate of mine was a project manager for one of the IT contractors he told me that waste & mismanagement among both the contractors and the NHS was legion.

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