UK
Learning the right lessons to rescue our struggling NHS
By John Lister
Rachel Reeves’ theatrical revelation of the black hole in government finances last month, and announcement of the projects including hospital buildings that would be axed, with more misery to come in her autumn budget, were a sorry follow-up to Labour’s electoral triumph.
Despite a massive parliamentary majority, and a clear majority of votes cast for parties promising progressive change, it seems the new government is determined to echo the Tories’ grim commitment to austerity for most of us, while allowing the super-rich and corporations to get even richer in the hopes that this will create economic “growth”.
If they stick to this position, they will inevitably fail to deliver on the manifesto and election speech promises to fix what Wes Streeting has described as our “broken” NHS.
Despite Reeve’s antics there were plenty of advance warnings issued on the scale of underfunding of the NHS in the months running up to Labour’s first election victory since 2005.
A year ago when Labour’s Mission Statement on the NHS was published, Health Foundation policy chief Hugh Alderwick argued:
“The elephant in the room is money. Labour’s narrative is that reform will need to do “the heavy lifting” to improve the NHS […] No amount of reform will avoid the need for substantial investment for Starmer’s Labour to make real progress.”
Any doubts that government coffers have been emptied out were dispelled by Jeremy Hunt’s spring budget, which again prioritised tax cuts and cuts in National Insurance over public services.
In March, the Health Service Journal warned that the budget squeeze meant NHS organisations were facing intense pressure to cut staffing numbers, with “horrible” conversations on service cuts taking place among NHS bosses.
The Institute of Fiscal Studies (IFS) also pointed out that NHS spending (after adjustment for inflation) would be £2 billion (1.2%) lower in 2024-25 than the £168.2bn in 2023-24, the largest real terms cut in spending since the 1970s.
But the pressures are growing. The latest figures show the scale of the problems in emergency care, elective care, community services, mental health, and of course general practice, with many GPs now taking industrial action in protest at a below inflation increase in funding. To make matters worse, hospitals are crumbling for lack of maintenance and RAAC-riddled hospitals could fall down at any time. Investment is needed to repair as well as expand.
Today’s Labour politicians need to look back to learn some key lessons from history, and times when the future of the NHS has been based on vision and courage.
BMA analysis of NHS spending since 2010 (which has been below the previous long term average) has shown a cumulative under-spend of £362 billion – a gap far larger and created much faster than the £200-267 billion ‘under-spending’ over 25 years revealed in 2001 in the report by former NatWest boss Derek Wanless for Chancellor Gordon Brown.
It was Labour’s boldness in reversing this underinvestment with ten years of increases aimed at raising spending towards European average levels – not the half-baked, expensive ‘reforms’ (which spawned a fresh growth in an otherwise irrelevant private sector) – that played the key role in turning the tide and improving the NHS from 2000.
By contrast, in 1948 it was the bold step of nationalising the post-war mish-mash of (largely bankrupt) voluntary and municipal hospitals to form the NHS that was decisive. 1,143 voluntary hospitals (90,000 beds) and 1,545 municipal hospitals (390,000 beds) were taken over by the NHS in England and Wales. This laid the basis to get hospitals working together and build a national system.
A nationalised system made it possible for the first time to plan and allocate resources where they were needed, and to create a national system of education and training for doctors and nurses, and a career structure for doctors.
But courage was also needed on funding in the first few years of the NHS. Nobody had known how much a public system was likely to cost, but promises had been made that everything would be provided free of charge.
Before the war the partial insurance system had brought an extremely low percentage (1.8%) of national wealth invested in health and welfare. On this basis in 1946 the cost of running the new NHS was estimated at £110 million per year: by the end of 1947 this estimate had increased to £179m. But the first part-year (from July 1948) cost £328 million, and the first full year £372m – more than double the 1947 estimate.
If Clement Attlee’s government had not had the courage of its convictions, and found the extra money in a time of extreme economic pressure, the NHS could have been starved of basic funding and failed from the outset, and we would never have seen its full potential.
Today’s Labour leaders have a very different view of courage. Rachel Reeves believes she is being bold by refusing to tax the super-rich, or the super-profits of energy companies or tax dodging corporations, but instead cutting back on winter fuel allowance for pensioners, and refusing to spend more on health, social care, or welfare.
Wes Streeting’s idea of courage has been to stand aloof from the trade unions and from campaigners that have battled for the past 14 years and more to defend the NHS against cutbacks and privatisation, talk mainly to the right wing press, and wheel in a few veterans of the Blair years whose ideas were expensive failures.
Streeting insists above all that the NHS does not need more funding, but does need ‘reforms,’ and that we need to sink more NHS money, not into expanding the NHS to cope with the growing caseload, but into purchasing ‘spare capacity’ from the private sector.
In reality it’s far from clear there is anything like the amount of ‘spare’ capacity he imagines, or that the private sector wants to fill its beds with less profitable NHS patients.
The Spire chain of private hospitals have openly said they are not interested: they have plenty of work. But of course, if they did take on the extra work they would need to poach more staff from the limited pool of qualified professionals – hampering the NHS.
Rather than repeating the errors of 20 years ago, Labour should show real courage, and follow the examples of Attlee and Bevan who built the NHS – and raised the money to pay for it – rather than Alan Milburn, and Paul Corrigan who wasted millions trying to turn the NHS into a market.
Labour will never have a stronger base for bold action, to get the wealthy few to pay their fair share of tax to ensure the millions can access the health care they need, and ensure a bigger, strengthened NHS contributes to a stronger economy.
- John Lister is a founding member of Keep Our NHS Public and co-editor of The Lowdown. You can follow him on Twitter here; read The Lowdown here; and follow Keep Our NHS Public on Facebook, Instagram and Twitter.
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