Below is the text of the speech made by Alan Milburn, the then Secretary of State for Health, to the House of Commons in London on 18 April 2002.
With permission, Mr. Deputy Speaker, I wish to make a statement on the next steps on the NHS plan. I am today laying before Parliament a Command Paper setting out those next steps, copies of which have been placed in the Vote Office.
The NHS plan that we published in July 2000 set out a 10-year programme to rebuild and renew the health service in our country. It diagnosed the NHS problem as follows. The principles of the NHS are right-on this side of the House we believe in an NHS that is free at the point of use, funded from general taxation, and based on need, not ability to pay. But today’s NHS is the product of decades of underinvestment. It is also the product of a failure to reform. Staff-the greatest asset that the health service has-work flat out in a system which still too much resembles that of the 1940s. The NHS plan set out a 10-year programme of investment and reform based on clear national standards, more devolution of resources, greater flexibility for staff and more choice for patients.
With the economy stabilised and the public finances sorted out, the 2000 spending review was able to give the NHS the largest ever real-terms increases in resources. Two years later, anyone who says that there are no problems in the NHS has clearly got it wrong, but those who say there has been no progress have also got it wrong. Yes, there is a long way to go-it is a 10-year plan-but those who point to an NHS black hole should in fact be pointing to dozens more hospitals, hundreds more beds, thousands more doctors, tens of thousands more nurses-and a better health service as a result.
In July 2000, we acknowledged that three years of sustained funding was not enough. My right hon. Friend the Prime Minister had already said in January 2000 that we needed to match European Union levels of spending. Yesterday, my right hon. Friend the Chancellor of the Exchequer put NHS finances on a sustained footing, not for three years, but for five. Years of failure to invest in the past are now being replaced with years of investment for the future. Today, I can tell the House what that investment will give us: 35,000 more nurses, 15,000 more doctors, 40 new hospitals and 500 primary care centres. As investment grows, so the capacity of the NHS will grow.
Investment in the NHS must, however, be accompanied by changes in the way in which the NHS works. Ours is not an unconditional offer. Without those reforms, we will not get the best use of the money for the taxpayer and we will not get the improvements in service for the patient. Where we have had the courage to invest, we must now have the courage to reform. Our formula is simple: investment plus reform equals results.
First, building on the national standards already in the NHS plan, we will strengthen the system of inspection and audit to improve accountability to patients and the public. Where more resources are going in, people have the right to know what they are getting out. We will therefore legislate to establish a new Commission for Healthcare Audit and Inspection to inspect and to raise standards in health care across our country. We are clear that we need higher standards in NHS hospitals and also in private hospitals.
The commission will assess the performance of every part of the NHS so that the public can see that every extra pound in the NHS buys something better for patients and gets something more for taxpayers. Similar arrangements will be made for social care. We will discuss the details of both with the National Assembly for Wales.
The new commission will be independent of both the NHS and Government, and more independent than the current fragmented system. It will report annually to Parliament, not Ministers, on the state of the NHS, its performance and, most important, the use to which it has put the extra resources. The Government should not be judge and jury of the NHS. The commission will be the judge, the British people the jury.
Secondly, we can go further in extending devolution in the NHS, building on what has been achieved. The health service should not and cannot be run from Whitehall. The NHS is delivered in hundreds of different communities by more than 1 million staff. The relationships are between the local patient and the local doctor; the local community and the local hospital. However, those relationships will not work properly until central control is replaced by local accountability. After 50 years, the time has come when the sound of bedpans being dropped in Tredegar should reverberate only in Tredegar.
With national standards and inspection in place, power, resources and responsibilities must now move to the NHS front line. When we came to office, GPs controlled only 15 per cent. of the total NHS budget. Today, primary care trusts, with GPs and nurses in the lead, already control half the budget. In only two years, they will control three quarters of it. Just as the new commission will report nationally, so primary care trusts will need to report locally on how NHS resources have been spent.
The best primary care trusts, like the best NHS hospitals, should enjoy greater freedoms and more rewards. We will therefore establish new foundation hospitals and foundation primary care trusts, which will be fully part of the NHS, but with more freedoms than they have now. They will have more powers, including a right to borrow, to expand their services for patients.
Thirdly, further to the new powers that we have given nurses and others, we will radically alter the way in which staff work and introduce a new system of financial incentives throughout the health service. We will put in place new contracts of employment, not only for nurses and other staff, but for GPs and, yes, for hospital consultants, too. Our objective is to liberate the potential of all members of staff, rewarding those who do most in the NHS and, crucially, improve productivity throughout the health service.
New incentives for individual members of staff will be matched by a new system of financial incentives for NHS organisations. The hospitals that can treat more patients will earn more money. Traditional incentives work in the opposite direction. Indeed, the poorest performers often get the most financial help.
We will therefore introduce a new system for money to flow around the health service, ending perverse incentives and paying hospitals by results. The incentive will be to treat more patients more quickly, and to higher standards.
Fourthly, patient choice will drive the system. Starting with those with the most serious clinical conditions, patients will have a greater choice about when and where they are treated. From this summer, patients who have been waiting six months for a heart operation will be able to choose a hospital, public or private, which has the capacity to offer quicker treatment. This level of investment means that we can grow NHS capacity as fast as it is possible to do so.
I can also say today that it is our intention to draw into this country additional overseas capacity so that we can further expand NHS services to NHS patients. As capacity expands, so choice will grow. Within three years, all patients, with their GPs, will be able to book hospital appointments at a time and a place that is convenient to them. The reforms that we are making will mark an irreversible shift from the 1940s take-it-or-leave-it, top-down service. Hospitals will no longer choose patients; patients will choose hospitals.
Reductions in waiting times to get into hospital must, of course, be accompanied by cuts in waiting times to get out. Older people are the generation that built the health service, and they have supported it all their lives. This generation owes that generation a guarantee of dignity and security in old age. Bed blocking denies both.
In recent months, the extra resources that we have made available have reduced the numbers of elderly patients whose discharge from hospital has been delayed. I am grateful for the help that local councils have given us in addressing this problem. Here, however, the long-term solution is not just investment, it is reform. I can tell the House today that, to bridge the gap between health and social care, we intend to legislate, as they have done in Sweden and other European countries, to give local councils responsibility-from their 6 per cent. extra real-terms increases-for the cost of beds needlessly blocked in hospitals.
Councils will need to use those resources to ensure that older people are able to leave hospital when their treatment is completed. If councils reduce the current level of bed blocking so that older people are able to leave hospital safely when they are well, they will have the freedom to use those resources to invest in extra services. If bed blocking goes up, councils will incur the cost of keeping older people in hospital unnecessarily. There will be similar incentives to prevent hospitals from seeking to discharge patients prematurely. In this way, we will provide local councils with the investment and the incentives to improve care for older people.
Taken together, the NHS plan and the next steps announced today amount to the most radical and fundamental reform programme inside the NHS since 1948. I want to pay tribute to the staff of the national health service-not just the nurses, doctors and consultants, but all the staff in the different medical disciplines, the ancillary staff, the secretaries, the receptionists, the porters and the cleaners. They represent the very best of British public service and I believe that, as a nation and as a Parliament, we should be proud of the work that they do. I know and understand the enormous pressure that they are under as the NHS plans to make these big changes. But I know, too, that they share this basic goal: to rebuild the national health service around the needs of its patients.
This programme of investment and reform will mean that each year, every year, waiting times will fall. Last year, the maximum wait for a hospital operation was 18 months. Today it is 15 months. By this time next year, it will fall to 12 months. By 2005, it will be six months, and by 2008, it will have been reduced to three months. By then, the average waiting time for a hospital operation will be just six weeks. It is our aim that people will no longer have to face the dilemma of having to wait for treatment or having to pay for it.
As a party and as a Government, we are committed to providing opportunities to all in our society and not just to some, so there will be more effort to prevent ill health, as well as treating it. Twenty-five thousand lives a year can be saved by the investment we can now make in preventing and treating heart disease alone.
The balance of services will shift, with more patients being seen in primary and community settings, not just in hospitals. Social services will have resources to extend by one third rehabilitation care for older people. Councils will be able to increase fees to stabilise the care home market and secure more care home beds. More investment will mean more old people will have the choice of care in their own homes rather than in care homes.
Yesterday’s Budget and today’s reforms mean that the NHS plan will be delivered.
I want to make two further points. First, it is a 10-year plan, as we said in July 2000. By the time of the next election, there will be real and significant improvements. However, that cannot happen overnight. It takes seven years at least to train a doctor and up to 15 years to train a consultant. Expectations will be high-I understand that-but they also need to be reasonable, and people need to understand that a 10-year plan is exactly what it says. It will take time to be delivered in full. At least now, public and patients will be able to see improvements made stage by stage, independently of Government, audited, monitored and inspected.
Secondly, there is consensus in the country on one thing: Britain needs to spend more on health care. There is no mystery about why there are no waiting lists in Germany. It has spent more, and has done so for years.
We can debate endlessly the system of finance, but one thing is beyond debate: the level of finance has to be raised. Once that is accepted, the choice is not between a system funded out of general taxation, which results in higher national insurance, and some other system that comes for free. Importing the German system of social insurance would cost the equivalent of an extra £1,000 per worker per year, and the French system would cost £1,500 per worker per year.
Labour Members believe in the NHS in our heads as well as our hearts. We believe it to be the best and fairest system of providing true health insurance, because it is based on the scale of the person’s need, not the size of their wallet. It is the best insurance policy in the world.
It is now for those who want to see the NHS not reformed but abandoned, and who routinely call it Stalinist, to say honestly what their alternative is, what it would cost and how much families and pensioners would have pay for it.
Yesterday we made a choice, and we ask the British people to make the same choice. We are proud of the NHS and of the people working in it. We are giving it the money that it deserves. We are making the changes it needs. Investment plus reform equals results. We will be happy to be judged on them.