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We’re seeing the Conservatives’ new poll tax

The poll tax was famous for bringing down Margaret Thatcher and causing profound long term damage to the reputation of the Conservative Party. It is notable that one of the key players at the time was Oliver Letwin, who in 1986, recommended the poll tax to the Prime Minister after being asked to evaluate its likely impact.

Oliver Letwin is currently Minister of State for Policy and has had a significant influence on Conservative Party health policy. He was recently rated Number 2 out of the top 100 most influential people in the NHS by the HSJ.

According to Nick Seddon of the think tank Reform, Letwin “has been a key driving force behind encouraging greater plurality of provision – from the private and third sectors – and the development of new ownership models”.

He was also recently asked to review Lansley’s reforms and gave a solid thumbs up to plough on. This was in no way surprising, because his own ideology is so similar to Lansley. In 1988, Letwin wrote a paper about the NHS reform for the Centre for Policy Studies called Britain’s Biggest Enterprise. This paper offers a fascinating insight into his thinking and contains many of the current policy proposals.

In his conclusion, he stated: “One could begin with the establishment of the NHS as an independent trust, with increased joint ventures between the private sector; move on next to the use of credits to meet standard charges set by a central NHS funding administration for independently managed hospitals; and only at the last stage create a national insurance scheme separate from the tax system”.

It is therefore no surprise that he was once famously quoted as saying that “the NHS will not exist” within five years of a Tory election victory and there would be “no limits” to NHS privatisation in an interview with The Times.

His 1988 paper could easily be seen as a prototype of the current Health Bill and is a classic example of modern conservatism’s solutions for the public sector i.e. using markets and the private sector to replace any profitable state functions, whilst leaving unprofitable services well alone. The evidence base for these policies is totally lacking, hence the constant references to Lansley’s reforms as being ideologically driven. The editors of the BMJ have gone as far as calling them “mad”.

David Cameron has now placed his full weight and reputation behind the proposals and he therefore cannot “be for turning”. This is an enormous political risk. This is particularly ironic, because by exempting the NHS from the worst of his government’s spending cuts, the level of public suspicion was subsiding that the Tories would dismantle Britain’s best-loved institution. In fact, the NHS was a non issue in the pre-election debates.

Now, the public, the media and the professions have started to cotton on to what the Tories are up to. Whether the Bill passes or falls, this could be Cameron’s very own ‘poll tax’ issue and once again the fingerprints of Oliver Letwin will be there.

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14 Responses to “We’re seeing the Conservatives’ new poll tax”

  1. chrissa says:

    the time since 1997 has produced some rather solid evidence about the NHS as completely state run institution: its amazing ability to absorb gigantic amounts of tax payers money. the increases in spending produced a huge bureaucracy that is obsessed with “managing” failures (e.g. the target chasers in every hospital) and social engineering (hordes of nurses who no longer have patient contact = no longer do any nursing but but “manage” smthg – created in order to provide “career options”). the cushy PFI deals that make the NHS overpay for the structures it received many times were the labour party’s doing. lansley’s reforms are driven by the evidence that the socialist model is a bottomless pit.

  2. Richard Blogger says:

    @chrissa

    So I assume you are going to tell us now of a healthcare system that does not have “an amazing ability to absorb gigantic amounts” of money, without a “huge bureaucracy” and no “social engineering”? I thought not. If you think that Lansley’s plans will improve anything then you clearly have not read the bill.

    For a start, the top-down control is not being abolished, it is simply moving into the National Commissioning Board, and, coincidentally, the first chief executive of the NCB will Sir David (I run the NHS from Richmond House) Nicholson. The NCB will be accountable to Parliament once a year. Hmmm.

    Lansley will no longer run the NHS (“is he doing that now?”, you ask. Fair point.) He’s said that he wants to change the name of the Department of Health into the Department of Public Health. That is, Lansley will not be responsible for healthcare *provision*, just for vaccinations and getting fatties like me to eat less and take a bit more exercise. Public Health is 3% of the current NHS budget. Lansley will be legislating away 97% of his job. It’s great to have that power, eh? But since Lansley will not be in charge of healthcare provision, if he gets any questions in Parliament other than those about fatties and jabs he will simply say “nowt to do with me, wait until the one day a year that the NCB are accountable”. Similarly at PMQs. Cameron will brush off any healthcare provision question with “AWP means that your constituents have a choice to go elsewhere: so tell them to go elsewhere”.

    So what about the structures Lansley is creating, which, chrissa, you imply will be cheaper and less bureaucratic? Well, the NCB will commission and performance manage GP consortia, which it will not be able to do from Whitehall, so it will have regional centres. Let’s say ten of them. Abolish SHAs? Like hell. Then there will be commissioning groups,, the GP consortia, which Lansley has already said will do much of the work of PCTs and he’s promised will take 60-70% of existing PCT staff. But guess what? They are totally unaccountable. No patient representation, no appeal (look up PCT accountability). The boards of the consortia don’t even have to have GPs on them. No GPs, no nurses, no midwives, or opticians, dentists, physios: none of the people who will be paid for using taxpayers money that the GP consortium board will spend. Oh and no patient representatives either (if you hadn’t noticed, patients make up the largest group in this relationship, and hence pay most of the money that the consortia will spend).

    I think you may have noticed that I do not view Lansley’s plans with your rose tinted specs.

  3. Nigel says:

    Chrissa – PFI is socialist how exactly? The parading of prejudice is not a substitute for intelligent comment. Actually satisfaction with the NHS is at an all time high and outcomes have improved.

  4. clive peedell says:

    Hello again, Chrissa,
    Thanks for your response.
    I thought I needed to draw your attention to few points.
    1. PFI was introduced by the Conservatives. Many believe that David Willetts was one of the key architects, but Norman Lamont talked about it in 1992
    http://www.pfiexposed.co.uk/about/
    2. I note your remarks (repeated elsewhere too) about the New Labour administration being a failed example of socialism. In fact, the New Labour project was a version/variant of Thatcherism. Simon Jenkins write a book about this called “Thatcher and Sons”.
    The “third way” was a form of neoliberalism, which was the key political, economic and philosophical doctrine of Thatcher and Reagan. This ideology was propagated by the Mont Pelerin Society with leading academics like Hayek, Friedman, and Stigler. In the UK it was peddled by the IEA, ASI and CPS.
    3. The NHS used to cost 5% GDP prior to Thatcher’s PP split and internal market. We now spend 8% GDP and 14-18% of total NHS budgets is spent on administering the market (versus 5% pre PP split). It is the market that Thatcher introduced and New Labour continued to promote that is costing the NHS and the taxpayer dear.

    Please read this article by Labour MPs Jon Cruddas and Jon Tricket to understand what happened to New Labour.
    http://www.newstatesman.com/uk-politics/2007/12/tories-party-labour-jon-turn

    The same thing happened to the Lib Dems. This is why all the political parties converged towards the centre right.
    http://www.theliberal.co.uk/libdems/neo-liberal-democrats.html

    BW,
    Clive

  5. chrissa says:

    fyi – the first thing labour did when getting into power was to make frank dobson health secretary and the first thing frank dobson did in 1997 was to abolish the internal market – just when it slowly started to bear fruit. if frank dobson was not a hard line, classic left winger, you need to show me one. later on, they made a u-turn and incurred much more difficulties.

    the most expenditure on pfi was done under labour, the creation of hordes of nurses who do not nusre was done under labour, the introduction of hordes of people with 4 word job titles mushroomed under labour, the mmc-mtas disaster was done under labour, mid-staffs occurred on labour’s watch … shall i continue or will that do for the moment?!?

    a lot of the detail in the new bill is just to provide stepping stones and a smoke screen because the right thing to do is: the state takes care of universal access to health care by providing a universal health insurance and the provision of health care is done by whichever provider’s manages to make services of the necessary standard available. the reason for the mess in america is because they allow profit making insurers to control access to health care. if the 20th century has provided evidence for one thing, that is: socialism will only work for as long as it can spend other people’s money. this it will do until all is spent and then it collapses. the soviet union should have been a big enough field experiment for anyone to be convinced.

  6. joshek says:

    There is no need to use the ex-Soviet Union as an example. Plenty of evidence has been produced much closer to home: Just have a chat with the people who lived through the 1970’s, when the UK was thoroughly nationalised and in the grip of the trade unions. That decade brought the country to its knees. Is this where you want to go again Clive?

  7. Dr Grumble says:

    The real problem with all of this is that people read across from the problems of the 70s and the collapse of Soviet Union to the NHS. Clive has provided figures which show that running a market in healthcare is very expensive. The increasing number of managers which the Conservatives like to blame on state inefficiency is actually an inefficiency largely created by the market.

    The NHS used to be the most cost-effective healthcare system in the world. The problem that all countries have is how to keep spending on healthcare under control. Dismantling the NHS and running a real market is going to cost more and not less. That is the main tragedy to all of this.

    The tragedy for the ConDems will be that the once the public realises that their beloved NHS has gone they will blame the coalition – though New Labour was plainly heading the same way. Putting GPs in charge has been a clever political ploy because when things go wrong the ConDems will try and pin the blame on doctors. The public though are not as daft as politicians sometimes seem to think.

  8. joshek says:

    The odd thing about healthcare is the “Cost Paradoxon”.
    Let me explain: In most industries (e.g. computers) progress comes with lower and lower unit cost. In healthcare this is not the case – the opposite is. Example: Severe trauma patients that would have never made it alive from the scene to the hospital survive these days but often end up needing life long care. Pre-term babies are another example: Earlier and earlier babies survive – many will need permanent care. Or even somthg as non-dramatic as the rising life expectancy in itself: It actually means that more and more people will need “standard spare parts” such as artifical hips and knees – simply because they are otherwise healthy and move about!

    The result is that the life long potential health care cost for each citizen is rising dramatically with no end in sight. The precentage of GDP spent is likely to have risen for these reasons alone in the last 15 years.

    In order to have any chance to get to grips with these ever rising cost – the first thing in need to be done is accounting for them. That alone means that the mantra of “free at the point of delivery” can not be sustained. It is true that accounting these costs costs money – but what is the alternative? Just try to satisfy the never ending demand without any regard as to cost?? Some idea of basic arithmetics is enough to understand that this is not an option. The figures Clice produces are all very nice – but they need to be understood in context.

  9. Kathy teale says:

    Whatever the rights and wrongs of the previous labour administration the fact is that Its a myth that the NHS is a bottomless pit into which we’ve poured money. In fact it’s only since about 2007 that we’ve reached the European average spend on our health service as a percentage of GDP – so that hardly qualifies as overspending. And that follows 3 decades of gross underfunding compared with most other developed countries. Our outcomes in terms of survival are improving and in many cases at or overtaking those in many western European countries despite having amongst the highest rates of obesity and alcohol consumption. Our doctors also earn more than most or our European counterparts. The NHS can improve of course but it’s not the basket case Lansley makes out. There is not justification for and no evidence base for these proposals other than ideology and a Tory hatred of anything with the word National in front of it.

  10. joshek says:

    The “Cost Paradoxon” actually explains why the efficiency of the NHS was the result of what Kathy calls years of underfunding. The evidence for reform is actually there: Amount of administrators in the NHS in 1997 vs 2010? Amount of nurses who do not nurse in 1997 vs 2010? Averagre life expectancy in 1997 vs 2010 – which leads to the ikelyhood of required “standard spare part” surgery (i.e. hip) per 1.000 of population in 1997 vs 2010?

    The better funded, the more successful the NHS is, the more expensive it will become. Example: Mucoviszidosis (Cystic Fibrosis). The life expectancy of sufferes was below child bearing age – recently, thanks to better treatments, it has risen to about 40. Many sufferers live to have families, passing on the condition. Diabetes presents a similar picture. It is a grave mistake to look only at the evidence presented by Clive – this is only one part of the equation.

    The better the NHS is – the quicker the costs rise. A few commentators seem to fail to understand this … an organisational structure that does not have any self limiting mechanism is a bottomless pit in this situation. It is the necessity of such self limitation that makes the reforms unavoidable.

  11. Malcolm Morrison says:

    All previous ‘re-organisations’ have failed (as will this one) because they have failed to address the basic problem of the NHS – there is an almost limitless ‘demand’ and a limited ‘supply’, as determined by the Govt. of the day deciding what they will spend on it (the NHS budget).
    I have analysed the ‘problems’ and offered ‘possible improvments’ in the chapter on Health in my book “A Question of Balance – Towards a Better Briatain?” (published by Lulu.com) – which Hospital Doctor were kind enough to reproduce under “Dr Blogs” on 26th November 2010 under the heading “We can’t just continue as we are”. The links is: http://www.hospitaldoctor.co.uk/blogs/dr-blogs/we-cant-just-continue-as-we-are
    I am sure many will disagree with some of the suggestions! I hope some may agree with some of them! But I hope it might provoke discussion and debate.

  12. ace-of-hearts44 says:

    Its a great irony that the “Safe and Sustainable” review of childrens heart surgery (published this week) at
    http://www.specialisedservices.nhs.uk/news/view/25
    states that the number of centres is being reduced to concentrate expertise based on the well-documented observation that better outcomes are associated with higher volumes. This principle should apply to ALL areas of complex and high tech patient care (that can be defined). The Lansley reforms however will result in precisely the opposite by encouraging competition between hospitals. This means that any hospital can set up a service in competition with any other to bring in the work because it wants the revenue brought in by tariffs rather than see it go to a Centre of Excellence (for which read established and high volume) at an MFF (mark-up) of 120%. This, in turn, will lead to lower volumes and poor infrastructure (not to mention duplication of equipment, increased staffing levels etc., and the costs thereof) with consequent worse outcomes than at the Centre of Excellence. In other words it will be BAD FOR PATIENTS. But it is actually happening out there!

  13. pete says:

    What I simply cant understand, and no-one seems to be identifying, is that Cameron promised, and was elected on the promise, that there would be no more massive, demoralising, de-stabilising,unsettling reforms of the NHS, and that it would move from central control. And what have we got………………………. the biggest reform since 1947. The BIGGEST!

  14. drballs says:

    Pete

    That’s because if Cameron had come out and said what Lansley had been “thinking” then the Tories would have done even less well than they did in last year’s general election. He knew full well that the public wouldn’t have accepted these changes and the Labour party would have jumped on them straightaway as confirming that the NHS isn’t safe under the Tories.

    What I can’t for the life of me understand is why the Lib Dems are going along with this. What’s in this for them (or the Coalition generally) other than political suicide? But of course for their politicians there is possibly there only chance of being in government. Amazing how power corrupts isn’t it!

    As for PFI, the issue surely has to be that these contracts need to be renegotiated, or even come to that re-legislated such that the taxpayer doesn’t pay an inflated price for the next however many years. What took the Coalition from May to February to work that out?

    And as for ace-of-hearts44 comment, the point is well made. In fact the 2 strands of policy seem mutually incompatible. And just out of interest, where are outcomes demonstrably worse for paediatric cardiac surgery? Smaller units in the US, where small volume units can do what they like and frequently do without the necessary expertise and with little or no form of regulation except Health Insurance companies, which is tantamount to none anyway. Do we really want that over here? I would suggest not, but considering many of the same companies are coming over and could end up running our commissioning process if the Tories have their way, then we could be in for some real difficulties in the years ahead, that would pretty much spell the end of anything approaching the NHS of the last 62 years. You only have to think of what they have done to NICE to see what this government thinks of evidence!!

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