Alan Milburn – 2002 Speech to CBI Conference

Below is the text of the speech made by Alan Milburn, the then Secretary of State for Health, to the CBI Conference in Manchester on 26 November 2002.

Thank you for the opportunity to take part in your conference.

As I have stressed in recent meetings with both Sir John Egan and Digby Jones the Government attaches particular importance to the relationship we have with the business community.

I am pleased to be able to put on record my thanks to the CBI for agreeing to work closely with the Department of Health on a number of specific projects. First of all on improving procurement so that public and private sectors alike are able to make the most from the record investment now going into renewing our key public services, especially the NHS. And secondly, encouraging mentoring, secondment and management support to the NHS from within the business community. By working together we plan to open up the NHS to new management talent from outside the health service to help meet some of the new management challenges we face – in areas like IT, procurement and programme management.

More generally we recognise as a government the pivotal role public private partnerships are playing in improving our vital public services. I very much welcome the statement launched today by the CBI on the role of PPPs. There is much in it with which we can agree. In essence the Government’s approach is about using the private sector where it can support the public sector to improve public services.

You can see that with the private finance initiative. PFI is a partnership that works. As an addition, not an alternative to public sector capital investment, PFI is helping deliver the biggest new hospital building programme the NHS has ever seen. It is allowing more new NHS buildings to be built more quickly. PFI is here – and it is here to stay.

In the face of sometimes fierce, often dogmatic opposition to PFI, both public and private sectors have a responsibility to explain that this is a partnership that is delivering results for patients and good value for money for taxpayers. We have a shared interest in doing so because we have a shared interest in making sure public services work. Public services are vital to business, the economy and the wider society we serve.

That is as true for health as it is for education or transport. At its simplest, the level of ill health in our country means a loss of productivity and a loss of potential skills that an increasingly knowledge-based economy simply cannot afford.

I believe that in a world where health care can do more but costs more an NHS free at the point of use based on need not ability to pay is a huge strength for Britain. So the values of the NHS are right. But for all its great strengths – its ethos, its staff, the great advances it has brought in public health – the NHS has profound weaknesses too. Too often the poorest services are in the poorest communities. Its centralised top down structure tends to inhibit local innovation. Staff too often feel disempowered. Local communities feel disengaged. And patients have little say and precious little choice.

The NHS needs two things. One, investment. Two, reform.

Improving the NHS requires us to address decades of under-investment. There is a simple truth here: if we want world class health care it has got to be paid for. The last Budget sought to do just that. Five years of real terms growth averaging 7.5% will take health spending in our country beyond the EU average. We have a lot of catching up to do but today we have the fastest growing health care system of any major country in Europe.

When we put taxes up to pay for more resources for the NHS we entered into a new contract with the people of our country. In exchange for extra resources we need to deliver better results. That means a tough new inspectorate to guarantee value for money for taxpayers and the highest clinical standards for patients. It means modernisation of how the NHS pays and employs staff. And it means, as we set out, in our 10 year NHS Plan far reaching reforms. Devolution of power. Diversity of provision. Choice for the consumer. Each is controversial, but all are needed if we are to get the best from the resources we are putting in.

Let’s start with devolution. The job of government is to set standards and objectives to ensure equity in healthcare provision. It is not to run the NHS. A million strong service cannot be run from Whitehall. It’s got to be run by the local staff and held to account by the local community.

As in any large organisation – public or private – getting the right balance between national and local holds the key to securing improvements in services. In the NHS today we are at the start of a transition where we move from a top down and centralised system to one where standards are national but control is local. So the performance of local health services is now being rated with those doing less well getting more help and those doing best getting more freedom. At one end of the spectrum new management teams will be brought in – from the public, private or voluntary sectors – to turn round persistently poor performance. At the other the best performers will become NHS Foundation Trusts freed from Whitehall direction and control, governed, indeed owned by the local community and with a bigger say for local staff. Reform means investing not just extra resources in front line services, but power and trust in those front line services.

From next April locally run primary care trusts will control three quarters of all NHS resources. They will have the freedom to purchase care from the most appropriate provider – public, private, voluntary or not for profit. This will bring greater plurality in local services with the freedom to innovate and respond to patient needs. So in addition to sustained growth in existing NHS provision and greater use of existing UK private sector hospitals to treat NHS patients, we will bring new private sector providers from overseas into this country to further expand NHS services. As other European nations show, a public health care system based on centre-left values does not need to be exclusively delivered by state-run line managed public sector organisations.

These reforms are about redefining what we mean by the NHS. Changing it from a monolithic centrally run monopoly provider to a system where different health care providers work to a common ethos, common standards and a common system of inspection. In this reformed system, wherever patients are treated they remain NHS patients because they get care according to NHS principles – treatment that is free and available according to need not ability to pay. This is the modern definition of the NHS.

A modern NHS is also one in which patients have power and choice. So if the local NHS hospital cannot offer a short enough waiting time but another hospital can patients can choose it.

Choice over hospitals has always been there of course but only as the exclusive preserve of those who can afford to pay. That is two tier health care. I believe health care and choice in health care should be based on need not ability to pay. So choice needs to be available on the NHS. Already hundreds of NHS heart patients have been able to choose faster treatment by choosing a different hospital. And as NHS capacity expands so choice will grow. By the end of 2005 we aim to have NHS patients needing a hospital operation in every part of the country having a choice over the hospital, the time and even the doctor that’s best for them. This reform marks an irreversible shift from the 1940s take it or leave it, top down service. Patients will be in the driving seat – and not before time. Resources will follow the choices patients make so that hospitals who do more get more; those who do not, will not.

There is a simple deal on offer here. The better you do the more you get. It is a discipline that needs to work just as much in the public sector as in the private sector.

Some say that a service, centred on individual patients offering real choice, can only happen in a private market by forcing patients out of NHS care into treatment they must pay for themselves. I say that with the right level of investment and the right programme of reform the NHS can deliver a modern responsive service to the people who use it and those who fund it. That is what we intend to do. We want to work with you to make it happen.