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Wednesday 9 July 2008

What a waste of time and money

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I have a piece in The Business on ten years of Labour's management of the NHS, which you can read here (it's also in the Spectator's Blair supplement):

New Labour had its limits, even in 1997. Those limits were made flesh by the appointment of Frank Dobson as Tony Blair’s first health secretary. For all the changes which the NHS has seen since then, there has been an underlying Old Labour consistency to the government’s approach to the NHS over the past decade: spend as much money as possible, fiddle with the management structures, and all will be well with the wonderful NHS. But if that was the answer, then one  has to wonder what on earth was the question. Tony Blair’s legacy, after a decade in charge of the NHS, is a false dawn on reform and waste on an unprecedented scale.

...The notion has somehow taken hold that a radical Tony Blair was, as in education and welfare, prevented by his Chancellor from making the necessary bold reforms to healthcare provision. But it was not Gordon Brown who, in January 2001, sat on Sir David Frost’s BBC1 sofa and announced that NHS spending would rise to the EU average. It was Mr Blair. In reality, the Prime Minister was the prime mover behind the idea that money was the real problem, and bounced a horrified Chancellor into a spending commitment for which the word ‘profligate’ does not even come close. Between 1999/2000 and 2007/08, spending on the NHS will have almost doubled in real terms. In 1999/2000 spending was £46.2 billion; in 2004/05 it was £71.4 billion. But the result, far from curing the NHS’s ills, has been paltry. So where did the money go? In its 2005 review of the UK, the OECD found that, although the NHS budget increased by half between 1999 and 2004, the number of doctors increased by only a quarter. And Department of Health statistics show that although there has been an increase in the number of operations, it is much slower than the increase in the number of doctors or of spending. Productivity, in other words, has fallen. So it should come as no surprise to discover that 56 per cent of the £5.5 billion extra spending that went into the NHS in 2005 last year went on pay.

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