Tag: Speeches

Below is the text of the speech made by Alan Milburn, the then Secretary of State for Health, on 20 November 2002.

It’s a privilege to be here today as guests of the Royal College of Obstetricians and Gynaecologists. For fifty years the Royal College has worked tirelessly to make pregnancy and childbirth safer for women and babies. Your work has made an immense contribution to reducing deaths during childbirth. And that contribution has been particularly important because it has been most measured amongst the poorest communities in our country where need is greatest.
I am also grateful to the organisers of today’s event – the Faculty of Public Health Medicine. For thirty years it has set the standard for public health not least by driving major improvements in training and personal development. I want to thank you for your leadership and your support.

Today I want to describe the national challenges we face in improving public health and tackling health inequalities. I also want to set out our national programme of action to address them.

My starting point is this: the health debate in our country has for too long been focussed on the state of the nation’s health service and not enough on the state of the nation’s health.

In my view the time has now come to put renewed emphasis on prevention as well as treatment so that we develop in our country health services and not just sickness services. It is time for a sea change in attitudes. A renewed determination to fulfil the ambition we should share as a nation: to improve the health of all and to improve the health of the poorest, fastest.

The key questions today should be about how best we can bring about that improvement in the public’s health. How best can we cut deaths from heart disease? How best can we improve cancer survival rates? How best can we add years to life and add life to years? And crucially, how best can we tackle the huge inequalities in health which scar our nation?

In the last five years we have made a start in answering these questions. And I want to thank the people working in public health from all the different health professions – alongside countless other dedicated staff working in the NHS – for the real difference you are making.

Together, we face formidable problems. Our rates of Coronary Heart Disease for example are amongst the highest in the world. Our cancer survival rates are too low.

Progress, however, is underway. Indeed, Britain now has the fastest improving heart and cancer services anywhere in Europe.

The latest data, covering the period from 1998 to 2000, shows that deaths from cancer have fallen by 6%, from heart disease by 14%. Just two weeks ago Professor Peter Boyle told us that the UK has had both the largest fall in lung cancer amongst men and the largest decline in breast cancer in the European Union.

There is a similar story on teenage pregnancy. We still have the highest rates in Europe but after years when teenage pregnancy rates rose they are now beginning to fall.

The introduction of the Meningitis C vaccine has reduced deaths by 90%. So new standards and new services are making their impact felt. But there is a long way to go. And I believe the time is now right to up our nation’s game on public health.

I say that for three principal reasons.

First, because for the first time in the history of the health service there is a long term commitment to extra NHS resources and to a ten year NHS plan for reform.

Improving public health – and tackling health inequalities – is a battle for the long term. It can’t be done when there is the uncertainty of spending being up one year but down the next. Today, after decades of neglect and underinvestment, we can look forward to the future with confidence. Five years of real terms growth averaging 7.5% a year will take health spending in our country beyond the EU average. Just six years ago spending on the NHS was falling in real terms. By 2008 it will have doubled in real terms.

Britain now has the fastest growing health care system of any major country in Europe.

To get the best from this level of investment – especially for our poorer communities – resources have to be accompanied by change and reform. The emphasis the NHS Plan places on improving health and reducing inequality has enjoyed insufficient attention since it was published two years ago.

The NHS Plan committed the Government to achieving the first ever national health inequalities targets; to increasing resources in deprived areas; to introducing new screening and preventative programmes. And in each of these areas there is already progress underway.

Second, however, renewed emphasis is needed on public health because there are new problems to deal with which make the challenge of health improvement both more difficult and more vital.

In an open, increasingly global economy disease recognises no boundaries. The rising incidence of TB across the under-developed world is now impacting on the developed world – including in this country.

Changes in lifestyle are having an impact too. Sexually transmitted infections are rising especially amongst young people. Over the last few years more people newly diagnosed with HIV were infected through sex between men and women rather than sex between men.

Obesity has trebled since 1980 – increasing the risk of heart disease, diabetes, stroke and some cancers. It is more common amongst lower socio-economic groups with unskilled women twice as likely to be obese as professional women.

There are similar trends in tobacco consumption. By the age of 15 around one quarter of girls are regular smokers. Not surprisingly while rates of lung cancer are falling among men they are still rising among women. Indeed lung cancer has now virtually caught up with breast cancer as the leading cause of cancer deaths among women. The problem is greatest amongst lower income women.

In each of these cases we have responded with new services and new approaches. But as the Chief Medical Officer’s report, Getting ahead of the curve, made clear new challenges mean that we must keep focussed on public health. Indeed that is why we are creating a new Health Protection Agency. And there is another pressing reason for upping the focus on public health – health problems, old and new, are all too often concentrated in the poorest communities.

Third, then, for over fifty years the health gap between the better off and the worst off has widened, not narrowed. For me, that offends against all this government stands for: a society based on fairness and justice, in which each citizen gets the opportunity to fulfil the potential of all their talents. Good health – like a good education – is the route by which each and every one of us can properly fulfil our true potential. It unlocks life chances and is a fundamental building block of wellbeing.

Too many people are denied this basic chance in life. That was principally the message of Sir Donald Acheson’s report. Poorer people get sick more often and die earlier. For us it is simply unacceptable that the opportunity for a long and healthy life today is still linked to social circumstances, childhood poverty, where you live, how much your parents earned, how much you earn yourself, your race and your gender.

In some areas of the country life expectancy is still the same as the national average in the 1950s. Two weeks ago the Office of National Statistics published new figures showing that even today a boy born in Manchester would live on average a decade less than a boy born in Dorset.

Social inequality breeds health inequality. Poverty literally cascades down the generations. Up to a quarter of all children are persistently in low income families. Babies born to fathers in social class five are more likely to be low birth weight. Low birth weight is a key factor in a child’s subsequent development and opportunity. Poor children are less likely to get qualifications and to stay on at school. Poor health then is linked to low educational attainment, which is not only bad for the individual but also bad for the nation.

Economic success today depends on harnessing the skills and potential of all of our people and not just some. Poor health blights too many communities and holds back too many people.

So, the time has come to recognise that health just like education is a route to economic fulfilment as well as personal fulfilment. Just as good education is a route out of social exclusion and into economic prosperity so too is good health. The vicious cycle of poverty, social exclusion, educational failure and ill health must now be broken.

It is this determination which drives the Government’s programme to reduce child poverty. Our aim is to reduce the number of children in low income households by at least one quarter by 2004 as a contribution towards our broader target of halving child poverty by 2010 and eradicating it by 2020.

Today on International Children’s Day it is worth reminding ourselves that compared with just five years ago, Britain has a quarter of a million fewer children growing up in homes where no-one has a job. 1.4 million fewer children live in absolute poverty today compared with five years ago. Almost 300,000 children in disadvantaged communities are already covered by Surestart, offering them the start in life others are able to take for granted.

Youth and long term unemployment are at the lowest level for 25 years. There are 1.5 million more people in work. The minimum wage and the working families tax credit have raised the living standards of millions of poorer families. There is more investment in childcare and in poorer communities. But there is an awfully long way to go.

By intervening in these sort of ways to break the cycle of poverty we can effect what Anthony Giddens once called the “redistribution of possibilities”.

Our task as a government is to ensure that the “redistribution of possibilities” becomes a reality for every section of society, every community in every part of our country.

Our vision is of a society where there are opportunities for all and not just for some. Where everyone does enjoy the chance to get on. The opportunity of a job. The opportunity of good education. To live in a community free from crime and the fear of crime. The opportunity to enjoy better health too.

So there is every reason in the world to take action to address health inequalities and improve public health. The necessary levels of investment are in place. We have a long term plan for reform. Without action the problems are likely to intensify. Above all – perhaps most simply of all – health inequalities offend against the values of social justice, the very values on which the NHS was founded.

And yet, for years there has been a sometimes paralysing debate about whether we could do anything to tackle health inequalities at all. Some argued that since they were the product of such deep-rooted social and economic factors they were beyond any realisable form of action from the NHS or indeed any other agency. Others argued – even when they were in government – that it was the individual rather than society that was to blame. Both analyses became a recipe for hopelessness and inaction.

Today we need a new outlook. An approach that accepts that there are wider determinants of ill health – and a wide-ranging programme of action is necessary and indeed is underway to deal with them. But an approach which also understands that the NHS can make a specific contribution to improving health prospects by working with the communities it serves: making the task of tackling health inequality something done with local people not just done to them. Indeed, such action is vital if the NHS is ever to deliver on its values of equity and social justice.

Today our insight surely must be that a healthier nation calls for a fairer society. The job of improving health then, is a job not just for one department of government but for the whole of government – and not just between government departments but between government, business, local communities and individuals to provide real and lasting opportunities for better health. And it calls for a renewed effort on the part of the NHS to focus on prevention so the “redistribution of possibilities” becomes a reality.

Today I am publishing the Government’s cross cutting review on health inequalities, part of this year’s Spending Review. The review commits – not just one government department but the whole of Government – to place tackling health inequalities at the very heart of public service delivery. So with the education department we will extend Surestart. With the transport department we will improve public transport in deprived communities. With local government we will improve the housing stock.

The Prime Minister will take a personal lead in addressing the inequality issues raised in the review. He will be chairing a meeting of cabinet colleagues to oversee the production of a detailed national programme of action on health inequality.

Within the Department of Health I am establishing a new Health Inequalities Unit. It will help lead our health-specific efforts on tackling these inequalities.

With resources biting alongside reforms, and with the focus on the long term not merely on the short term, we can now increase our emphasis on health prevention as well as treatment. This can not be the old-style health promotion policies of the past seeking to cajole people into adopting healthier lifestyles but a new approach that offers people the opportunity of better health. One that recognises that diets are often less healthy and smoking rates are higher in poorer communities. That acknowledges people have the right to make a choice about what they eat or whether they smoke but people should have the opportunity to have a healthier diet or to give up smoking if they so choose. Many are denied that opportunity because healthy food has not been available locally or until recently because help to give up smoking has not been available freely. It is on this basis that we can then ask people to take greater responsibility for their own health.

There are five specific steps we now plan to take.

Firstly, tackling inequalities in access to health services.

The most disadvantaged are not only more likely to get ill. They are less likely to get the best services when they are ill. You can see that in the way those parts of the country that have the worst levels of heart disease often have the worst heart services.

We have started to address this inverse care law – whereby those with the greatest need tend to get the least health care – that has dogged the NHS for fifty years. Equity demands national standards that level services up not down. The national framework of standards we have put in place – with national service frameworks and a national system of inspection – are a means to this end. So too, despite the controversy around them, are national targets to ensure equity in access to treatment.

The targeting of resources to areas where need is greatest is also important. In tertiary care for instance we are plugging historic gaps in heart surgery capacity by putting in place new services in Teesside, Blackpool, Wolverhampton, Bristol, Plymouth and elsewhere. In primary care GPs working under the personal medical services contract are delivering services in communities where none existed before like Sunderland, Salford, East London and Liverpool.

Two years ago I introduced the health inequalities adjustment into the NHS funding formula to ensure that extra resources were going to the areas of highest health need. Later this year I will introduce an entirely new formula for funding local health services so that we can achieve a better balance still between high cost areas and high need areas.

Secondly, then, we plan to put public health and addressing health inequality at the heart of the NHS. By devolving power in the health service we have begun to put public health centre stage. The truth is the fifty year old one-size-fits-all NHS hasn’t succeeded in reducing health inequalities. Uniformity in provision has not guaranteed equality of outcome. That is why we are moving towards an NHS where standards are national but control is local. Since different communities have such very different needs it must be right to put resources and responsibilities in the hands of frontline services.

Today Directors of Public Health are based within local Primary Care Trusts, directly serving more than 300 local communities. There is a huge opportunity here for public health to take a hands-on community-orientated role; to use the PCT structures to forge local alliances – between public, private, voluntary and community organisations – which are necessary to tackle specific local health problems. And there is now a clear mandate to do so.

The two national inequalities targets we have set are now firmly embedded in the NHS Priorities and Planning Framework for the next three years. They are now core business for the whole National Health Service.

I can also say today that the next set of performance indicators on which all local health services will be rated and rewarded will have at their core securing improvements in public health and better health outcomes. We are considering indicators on infant mortality and mortality from circulatory diseases and cancer, alongside success rates for smoking cessation services, screening and immunisation.

Thirdly, we need to focus relentlessly on defeating our country’s biggest killers – cancer and coronary heart disease. Between them they kill over 200,000 people a year. Many of these deaths are preventable. Unskilled men are three times more likely to die from heart disease than professional men. Survival rates from cancer are worse in lower income areas than in higher income ones. Since both diseases have such a strong social class gradient a concerted effort here will make the biggest contribution to narrowing the health gap.

In the last three years since the publication of the national service framework on heart disease in 1999 and the Cancer Plan the year after, much progress has been made.

The number of cardiologists has risen by over 40% since 1997. The number of heart surgeons is up by more than 30%. There are 500 more cancer consultants today than there were in 1999. There are 500 more to come.

182 Rapid Access Chest Pain clinics are now open. The number of new linear accelerators has increased by 20%, CT scanners by 50% and MRI scanners by 100%. Again there are many more to come.

The best drugs are becoming available across the NHS too. Prescribing of statins to control cholesterol, while putting pressures on PCT budgets, is up by one-third. A few years ago taxanes to treat cancer were available – not according to clinical need – but according to the local chance of whether a GP or a health authority had decided to make them available to patients. Today they are available to all who need them, not just some. Thanks to the work of the National Institute for Clinical Excellence, over 30,000 patients can already benefit from new cancer drugs. Many more will do so in the years to come.

And, step by step, the NHS is making progress in tackling waiting times for treatment. Today 95% of patients urgently referred with suspected cancer are seen within a fortnight when they used to have to wait for months. The maximum wait for heart surgery is down from 18 months to 12 months. By spring next year it will fall to 9 months and will be lower still in future years particularly as more patients are able to make more choices about where they are treated.

In the next three years the NHS will be able to make further progress still by focussing not just on further advances in treatment – through faster waiting times and new drugs – but also on prevention.

Fourthly, we need to secure a better balance between prevention and treatment. Sir Richard Peto said earlier this year that halving the rate of premature death worldwide is within the capability of current medical expertise. We simply can no longer regard prevention as playing second fiddle to treatment. That is why we are extending our NHS screening programmes. Breast screening has been extended to 65-70 year old women. So far 130,000 women have been invited. By 2004, 400,000 women will be benefiting each year. Nationally, we will now move to extend other screening programmes such as for prostate cancer when there is the means to do so and for colorectal cancer as soon as we are able to do so.

Locally, more and more GP surgeries are already establishing registers of patients at risk of disease so that they can intervene sooner rather than later. Also, in this session of Parliament we are proposing to legislate for far-reaching reform of NHS dental services. PCTs, with the support of dental public health colleagues, will need to assess local oral health needs, including health inequalities, to meet their new responsibilities for dental services. Moreover, for the first time since the foundation of the NHS, primary care dentists will be given what is essentially a public health role, with the opportunity to focus on prevention and promotion, as well as treatment.

I hope that local PCTs will use their three year budgets to commission services in such a way that we get a better balance between services in the community and those in hospitals, between prevention and treatment. So that we can open up new opportunities for people to choose a healthier lifestyle.

We know for example that healthy eating could reduce by one-fifth deaths from cancer, stroke and heart disease. Fruit and vegetable consumption in our country is among the lowest in Europe – and still less in lower income groups than high income ones. Research I am publishing today on local five-a-day initiatives shows that those trends can be reversed. Those eating least before the schemes began ended up increasing their intake of fruit and vegetables once they had the opportunity to do so. Teachers have reported similar enormous benefits since we have introduced free fruit in schools. Today around 400,000 children are benefiting. By the start of the next school year it will reach 1 million children.

And the changes we are proposing to the welfare food scheme will open up choices for low income families to buy healthy food – including milk – for their young children. Together with the work the NHS is doing to encourage greater exercise – alongside partners like the New Opportunities Fund and Sport England – these opportunities to improve diet will not only help tackle the rising incidence of obesity but in the process help improve health and tackle health inequalities.

Fifthly, however the biggest contribution of all will be made by tackling smoking. As our 1998 White Paper starkly put it: smoking kills. It kills about 120,000 people each year in Britain. One in five of all deaths. It is the main avoidable cause of death. It is the principal cause of the inequalities in death rates between rich and poor. It costs the NHS £1.7 billion a year. Smoking is a public health disaster.

And yet we know that 7 in 10 smokers say they want to quit. Our job is to help them do so. That is why we have set challenging objectives to get smoking rates down not just among adults but amongst children. To target special help on lower income groups so that we can make most impact where the incidence of smoking is greatest. To help pregnant women to quit because smoking is the key preventable cause of low birth weight babies, one of the main determinants of future health.

We have made a start in delivering reductions in smoking. Smoking rates have fallen and the fall has been greatest amongst those in manual occupations. Now I want to set out how we will accelerate the drive to combat smoking.

To begin, with after years of obstruction in the courts and in Europe, the Tobacco Advertising and Promotion Bill received Royal Assent on 7 November. We made the commencement order giving start dates for implementation of the ban in Parliament yesterday. It comes into force today. By next Spring advertising on billboards and in the press will disappear. By next Summer tobacco companies will no longer be able to target their product at children because at long last tobacco advertising will be illegal.

What is more by this time next year, all cigarette packs will carry stark health warnings on the front of each packet. There will be new health messages including warnings about smoking causing impotence and clogged arteries. Misleading double-speak on cigarette packets such as “mild” and “light” will disappear.

Next year will also see, for the first time, tobacco companies having to provide information on the additives they put in cigarettes. We know already they include chemical compounds more usually associated with sweeteners and chocolate, solvents and turpentine. Each year we will publish the list of additives by brand and their known health effects.

With our European partners we will work to develop new graphic warning pictures on packets of cigarettes and other tobacco products. And we are working with the World Health Organisation to introduce a comprehensive Framework Convention on Tobacco Control to restrict tobacco advertising globally and improve tobacco control worldwide.

Our approach is not just about getting people to quit smoking but to make sure that people – especially young people- never start. The £59 million we have invested over the last four years in anti-smoking advertising is making a difference. These adverts have a higher recall rate than those of McDonalds. Elsewhere in the world where smoking prevalence has been dramatically reduced – places like Massachusetts, California and Australia – a major factor has been hard hitting media campaigns which have set out the reality of the damage caused by cigarettes. The impact, especially of TV advertising, has been just as high among low income smokers as amongst more affluent smokers. Research on the national tobacco campaign in Australia estimated a reduction in adult smoking prevalence of 1.8% over the initial 18 month period of the campaign. The costs of implementing it were more than offset by projected savings to the health care system.

Over the last few months my department has been discussing with some of our key health charities how we could learn those lessons from abroad and apply them here at home. I am pleased to be able to announce today that we will be providing an extra £15 million over the next three years to allow those charities – beginning with the British Heart Foundation and Cancer Research UK – to run similar hard-hitting campaigns here.

Let me just say at this point that I am grateful not just for the work of these two charities but for the work of countless others in tackling the scourge of smoking including the British Lung Foundation, the Royal College of Physicians, the BMA, ASH and QUIT.

And finally we will give more support to help more of the 7 in 10 smokers who say they want to give up smoking to do just that. Today the NHS is providing a genuinely world leading smoking cessation service. Zyban and Nicotine Replacement Therapy are already available on prescription. We began these services in the poorest communities and they are now available nationwide. Nearly 220,000 smokers have been helped to kick the habit, many for good. And now over the next three years we plan to help a further 800,000 smokers to quit.

We will do so by building up local services and developing our partnership with the pharmaceutical industry. Over the last few months we have been in discussion with GlaxoSmithKline, Glaxo Consumer Healthcare Novartis and Pharmacia about working more closely together to deliver even more smoking cessation services in local communities.

I am pleased to be able to tell this conference today that from the start of the next financial year we intend to have in place a rebate or a “cash-back” system between the Department of Health and these companies whereby the NHS receives a payment back for every extra smoking cessation product it buys over and above an agreed level.

We will in turn pass this cash back to local PCTs directly linked to how much they have invested in smoking cessation. The more they spend up front the more they will earn back. For the first time there will be a positive financial incentive to invest in public health. And we will want to explore how this principle could be extended further still.

We are engaged in a major national effort to tackle health inequality and improve public health. We need to mobilise individuals and communities. Above all else we need to mobilise you as public health professionals – without whom none of this would be possible – to lead it.

I have no doubt some people will dismiss this renewed commitment to public health and our campaign against health inequality as a road merely paved with good intentions.

But our actions are as determined as our ambitions are bold: to do what no government has ever done – to improve the health of the country as a whole and to improve the health of the worst off at a faster rate still.

Our determination springs not just from a recognition that health inequalities are in themselves an injustice but from a realisation that they hold our whole country back.

Our drive to tackle inequality comes not just from our view that a damage done to one is a damage done to all but our belief that to ignore health inequality is to tolerate even to condone it.

We do not condone health inequality. We must not tolerate it. It is time to tackle it. I hope that together we can do just that.

Below is the text of the speech made by Alan Milburn, the then Secretary of State for Health, on 5 November 2002.

Introduction

May I first of all thank Ian Gibson and my colleagues in the All-Party Parliamentary Group on Cancer for sponsoring this important Conference today and inviting me to speak this morning.

I would also like to thank Professor Boyle for his interesting and encouraging presentation.

Too often Britain is portrayed as the poor relation in European cancer care. It is encouraging to see that overall we are heading in the right direction.

When I became Secretary of State for Health three years ago I said then that reducing the number of deaths from cancer and improving the care and treatment cancer patients receive was a personal priority for me.

Over the last 3 or 4 year, the priority we have placed on winning the fight against cancer is beginning to deliver some results. Of course, that’s with the enormous caveat that there is still a long way to go. The people who deliver cancer services – doctors, nurses, radiographers, pharmacists, scientists, therapists and so many others – are still working under huge pressure in the NHS. Overall, patients get good quality care but sometimes patients still do not get the services they deserve.

Putting right years, and in some cases, frankly, decades even, of under-investment takes time and effort as well as sustained resources. That is why we have a ten year Cancer Plan. And today it is paying dividends in improved services and better outcomes. Today in our country we have the fastest improving cancer services of any major country in Europe. We are catching up – and catching up fast. Death rates are falling faster here than in other countries. Britain is starting to win the fight against cancer although there’s a long way to go.

I want to put on record today my thanks to those who are making this progress possible: the thousands of NHS staff across the country who are working together across organisations to modernise cancer services and whose commitment to excellence is, in my view, quite unrivalled in any other country in the world; the cancer charities, research bodies and voluntary sector and patient organisations who are now working together as never before to improve services for cancer patients. And of course, to Mike Richards – a lot of things only happen because of good leaderhip – Mike is leading this process of change – and is the best possible champion for cancer care any country could have.

The Cancer Plan is unashamedly a ten year programme. We are just two years in to it. Everybody – including me – wants to go more quickly. But – we have to be honest – we would simply be kidding ourselves, and misleading the British public, if we said turning round decades of neglect could be sorted with a quick fix. It can’t.

We should have the courage to acknowledge – to the press and to the public – that getting world class cancer care is a battle for the long term not the short term. It is a journey best completed step-by-step – recruiting staff, renewing equipment, changing attitudes, reforming services.

And, as we are honest about the scale of the challenge, we should also be determined to celebrate every single successful step along that journey. There is considerable progress to report. Investment in cancer care is rising and, in line with the Cancer Plan, by next year NHS spending on cancer will be £570 million more than it was just two years ago. I know – in this audience and elsewhere – sometimes there have been concerns about whether this extra funding is all getting through to frontline cancer teams. I take those concerns extremely seriously. We are putting in place work to better track that the investment is going in to where it is most needed but there is already growing evidence that extra resources are beginning to produce results for patients.

To begin with, the capacity problems faced by NHS cancer services are at last starting to be addressed. There are 500 more cancer consultants today than there were in 1999 – an increase of 15%. There are nearly 500 more to come.

There are still skill shortages of course – I think most acute in the all important area of diagnostic services. Again however progress is underway. The number of radiographers in training, for example, has risen by 28% in the last five years after it had fallen in the years before that. So we are making progress towards a long term solution.

The same is true for the other main capacity problem we face today in securing better cancer treatment services – shortages of the most up to date technology. Here the progress has been even more rapid. Since 1997 the number of new linear accelerators has increased by 20%, CT scanners by 50% and MRI scanners by 100%. Almost half the CT scanners currently working in the NHS are new since January 2000

There will be a further 100 additional scanners and 45 linacs for the NHS over the course of the next couple of years. We are currently working with local health services to decide where best the scanners should be located in order to plug the gaps in capacity that otherwise produce a lottery in cancer services. I will be making announcements about their location within the next few weeks so that the first of them can be delivered and imaging patients before next summer. This investment is essential to tackle the health inequalities which scar our nation and which are so evident in cancer care.

The lottery in funding for cancer drugs is already coming to an end. It is worth recalling that just a few years ago taxanes, for example, were available – not according to clinical need – but according to the local chance of whether a GP or a health authority had decided to make them available to patients. Today they are available to all who need them, not just some. Indeed, thanks to the work of the National Institute for Clinical Excellence, the NHS today is making available new cancer drugs for the treatment of ovarian, lung, brain, pancreatic, breast and bowel cancers as well as leukaemia and follicular lymphoma. Over 30,000 patients are already benefiting from these drugs. Many more will do so in the years to come. I can also tell the conference today that NICE are already appraising the next generation of new cancer drugs and will continue to make cancer a core priority of its work programme. And through the extra effort going into cancer research – particularly the establishment of the National Cancer Research Network – we can now aim to double the number of patients entering clinical trials of the latest drugs.

And, step by step, the NHS is making progress in tackling waiting times for treatment especially the time taken to see a cancer specialist Today 95% of urgent referrals are seen within a fortnight.

The extension of breast screening for 65-70 year olds is on schedule. So far 130,000 women have been invited. By 2004, 400,000 women will be benefitting each year.

And it is in this area of screening and prevention that we should now look to make further progress. So many of the 125,000 premature cancer deaths in the UK each year are preventable. Early intervention can make all the difference. Cutting down on tobacco consumption and improving diet could help to save up to 75,000 lives. In a few weeks time I will be outlining our proposals to place greater emphasis on prevention, alongside treatment, in the fight against cancer, when I speak to the Faculty of Public Health Medicine.

Today I want to suggest one way in which we can take this approach forward and use it to build on the progress that is already underway in improving cancer services.

Colorectal cancer, as Peter Boyle quite rightly said, is the second biggest cancer killer in our country. Each year it kills over 14,000 a year in England. Here – more than in any other area – earlier intervention can save lives. Patients with colorectal symptoms need to be diagnosed and treated without delay and research has shown that screening people who are asymptomatic can reduce the death rate from this cancer. In the Coventry and Warwickshire area good progress is being made with a bowel screening pilot and we are awaiting the results of the MRC funded Cancer Research UK flexible sigmoidoscopy trial with interest.

Today I can confirm to this conference my commitment to introduce a national bowel cancer screening programme. It will take several years to get there. It will not happen overnight. It will take time, but in preparation for this I am asking Professor Mike Richards to start work now with all the relevant experts to determine the best way forward. This work will consider specifically the workforce and training needs both for symptomatic services and for a screening programme.

Our overall aim is to cut deaths from cancer by one-fifth by 2010. Already, over a three year period the death rate from cancer has fallen by 6%. If we can maintain this rate of progress the ambitious target we have set for 2010 for our country should not just be hit, it could be exceeded. I believe we have a unique opportunity to do so.

No one questions how far we still have to go and I do not pretend meeting the challenge of creating world class cancer services in our country will be easy. But I believe we have every reason today to be optimistic about the future. I say that for five principal reasons.

Firstly, because the foundations have already been laid and I’ve said a word or two about that already.

Secondly, because the resources are available now and for the foreseeable future. This year’s Budget marked, in my view, a watershed for the NHS. Five years of real terms growth averaging 7.5% will take health spending in our country beyond the EU average – an average which, it’s worth remembering, the cynics said we couldn’t even get near. It is worth remembering that just six years ago spending on the NHS was falling in real terms. By 2008, because of these extra resources, it will have doubled in real terms. Britain now has the fastest growing health care system of any major country in Europe. The Budget laid to rest a decades old fallacy that we’ve had in this country – that we in Britain could have world class health care on the cheap. We can’t and nowhere is that fallacy more starkly demonstrated than in cancer services. If you want world class health care the resources must go in.

When we put taxes up to get more resources for the NHS we entered into a new contract with the people of our country. In exchange for extra resources we have to deliver better results. I believe that by delivering the NHS Cancer Plan – health services, charities, voluntary sector, universities, Government and patients organisations together – we can demonstrate the value for cancer patients of every pound of extra investment. That is why improving cancer care is and will remain a top priority for the NHS. It is also why reforms in these services are as important as the resources.

Thirdly, because of the commitment of cancer professionals to the reform of cancer services. Cancer services are already leading the way in reforming how the NHS works. The Cancer Services Collaborative is one of the most innovative means of reforming services I have ever seen. It has not only a national, but also an international reputation. By bringing together clinicians, managers and crucially patients to re-assess and redesign the way care is provided it is cutting waiting times for treatment and improving standards of care. It is all about empowering local clinicians so that they have the scope to bring about improvement for patients.

In the South East London Cancer Network the waiting time for radiology ultrasound services is down from 12 weeks to 11 days. And in the Queens Medical Centre in Nottingham the waiting time for patients with prostate cancer is down from 81 days to just 7 days.

Across the whole of the National Health Service the Collaborative has brought some 1,500 changes in around 500 individual projects. By the end of March next year we estimate that 30 per cent of diagnosed cancer patients will benefit from redesign work in breast, colorectal, lung, gynaecology and urology care. The Collaborative approach however is so successful that, in my view, it should not just benefit some cancer patients. It should benefit all. So I can confirm today that the NHS Modernisation Agency is now planning to spread this approach into the heart of mainstream service delivery for all cancers.

The Collaborative is just one example of how cancer services are leading the way in working across boundaries and devolving power to the frontline. Cancer networks have been successfully drawing together primary, secondary, tertiary and voluntary service providers and are showing just what can be achieved when staff across organisations work together to deliver frontline services.

Fourthly then, because the commitment to reform in the NHS is reflected in the Government’s commitment to put more power and resources in the hands of frontline professionals. As the Collaborative proves, the NHS works best when it harnesses the commitment of staff in order to improve care for patients. We are now at the start of a transition where more and more decisions about health care in our country are taken locally rather than nationally. Where standards are national but control is local. And it is precisely because we have put in place such a rigorous framework of national standards that the centre of gravity can now move to the NHS frontline.

The more overall performance improves – as I am confident it will as the reforms and the resources bite – the more autonomy will be earned across the whole NHS. That is what I want to see. Where we move from a 1940s NHS – top down and centralised – to a more modern system where standards are national but control is local. Where those who are doing less well get more help and those that are doing best get more freedom.

That process will now gather pace. From next April Primary Care Trusts will be in charge of three-quarters of the NHS budget, able to commission services as they see fit.

What is important about financial allocations to PCTs later this year will be not just for one year but for three. This will allow PCTs to plan with certainty increases in capacity not just for the short, but over the medium and longer term. Short term funding has hindered long term planning, not least in the provision of cancer services. Now the local health service will be able to decide which local developments will take place, when. Three year budgets will allow PCTs to decide longer term agreements not only with hospitals but with other providers too.

PCTs now have the explicit freedom to purchase care from the most appropriate provider – whether public, private, voluntary or not for profit.

That brings me to the fifth reason why I believe we should be optimistic about the future of cancer care in our country. Because of the development of new forms of partnership to improve care for cancer patients.

The principal partnership in health care is between the clinician and the patient. A modern NHS must do more to fully engage patients as partners in their health care. I am grateful to the 65,000 patients who’ve helped us do that by responding to the NHS Cancer Patient Survey. I am grateful too, for the time and commitment of people up and down the country involved in user groups and other partnership initiatives. I want to see these partnerships go from strength to strength and flourish in every part of the country.

Partnership with the voluntary sector is vital too. The role of the voluntary and charity sector in the development of health care in our country – whether in research, patient representation, health promotion or direct provision – is essential as we move into a more diverse, less centralised, more patient-centred NHS.

In cancer services that partnership is already well developed. The most visible arena for this partnership has been in palliative care where the NHS, in my view, has a great deal to learn from the voluntary sector. I am not one of those who support the “nationalisation” of the hospice movement through a wholesale takeover through government funding but we do need to address the long-standing difficulties in securing appropriate levels of NHS investment in specialist palliative care. That’s why I have asked Mike Richards – working with the National Council for Hospices, Help the Hospices, Macmillan and Marie Curie – to take forward this work in time for the 2003 planning round.

But involving the voluntary has to extend beyond to palliative care. We have to go further to mainstream voluntary sector involvement across the whole health service – especially in cancer care.

That is why I am particularly grateful to Breakthrough Breast Cancer and Macmillan Cancer Relief for their involvement with the taskforce which oversees implementation of the NHS Cancer Plan. CancerBACUP and Macmillan are key members of the National Coalition for Cancer Information.

And, of course, the major cancer research charities – serving alongside the Government and Medical Research Council – now play a central role in the National Cancer Research Institute (NCRI) which co-ordinates Britain’s research effort in the fight against cancer.

This partnership approach has to be the basis for making further progress in Britain’s fight against cancer.

That fight – as Professor Boyle has rightly indicated this morning – is now beginning to be won. Don’t get me wrong: we do have a long, long way to go but we are now putting in place all the elements necessary to achieve that victory.

We have a health service in our country that is absolutely right in its fundamentals – based on the right principles – care that is free, according to need not ability to pay.

We have a Cancer Plan in place and the long-term investment necessary to deliver it.

We have a shared commitment across the professions, amongst patients, charities and the government and a radical reform programme to get the best from all, the best for patients.

And we have some sure signs of progress with new equipment, ground-breaking research, shorter waiting times, and falling cancer death rates.

So my message today to this Conference, is that we can deliver world class cancer services in our country. We can, and now – with the right level of investment, the right programme of reform and a firm commitment to partnership – in time we will.

Below is the text of the speech made by Alan Milburn, the then Secretary of State for Health, on 23 October 2002.

It is an honour to be here with my friend and colleague Secretary Thompson. And it is a privilege to join friends and colleagues from around the world. We are all deeply grateful to you Secretary Thompson for hosting this evening and for allowing us to share once again the splendid surroundings of Blair House.

I am grateful to the Commonwealth Fund for once again bringing us together to share common problems and search for common solutions. Co-operation between the US and the UK on health policy, supported through the Commonwealth Fund, is already well developed with work proceeding on patient safety, performance incentives and clinical quality. We are learning much from one another.

There are big problems out there in the world of health care – and I’m sure I speak for every health minister here when I say that we need all the help we can get. There is no one better than the Commonwealth Fund – under Karen Davies’ leadership – in helping us learn from one another by learning together

Tonight is the first opportunity I have had to speak to you since John Eisenberg’s death. I know that the loss of John is still keenly felt here in the United States. I can tell you that in Britian we share that feeling of loss – John was truly a great American but he was also a great friend and support to all of us. He wasn’t just a leader. He was an inspiration. And he will be sadly missed.

I am proud today to be in Washington at a time when the US and the UK have never been closer. When Prime Minister Blair met President Bush in Crawford earlier this year the President spoke for people on both sides of the Atlantic when he said “our nations share more than just a common language and a common history. We also share a common interest in a common perspective on the important challenges of our times.”

September 11th changed the world. It also challenged the world. To stand together for values that are universal, that transcend any one country or any one continent, any one religion or any one language. Freedom and tolerance, the rule of law and respect for human life. These are universal values. Human values. September 11th challenged us to defend them. It challenged the world to defeat an enemy that is not just waging war on America but waging war on us all. The events in Bali challenge us once again not to weaken our coalition behind these values but to renew it and deepen it.

Last year at this conference my good friend Julio Frenck gave a compelling account of the problems confronting health systems in developing countries. Tonight I want to talk about some of those and particularly the challenges facing those of us leading health reform in the developed world.

Today’s world – more prosperous but more insecure than ever – calls for more co-operation than ever. It calls for new coalitions – not least in health care – to express our common interest.

In health care today new technology and knowledge transcend the old borders and boundaries. Demographic change and medical advance bring new possibilities but cause new problems. Expectations always seem to rise but costs never fall.

These waves of change are redefining health care – not just in any one developed country but in all. They present us with common challenges. So far the evidence suggests we have some way to go to meet them. Everywhere the media talk is of health care in crisis. This is not peculiar to one country. It is common to all. Last year’s Commonwealth Fund international health policy survey found that in all five of the countries surveyed a majority of people believed their health system was in need of fundamental change. The specific problems may have varied from nation to nation – waiting times for treatment in the UK and Canada, problems in paying for treatment in the USA, a mix of both these concerns in Australia and New Zealand – but the underlying problem remains the same. How to respond to a world where health care can do more but costs more than ever before.

The good news is this. In the developed world, people are living longer. Our lives are healthier. Deaths claimed by the big killers – cancer and coronary heart disease – are falling. To be sure, new challenges like obesity and diabetes continue to test our ingenuity. But there is no doubt that, taken overall health is improving. And health care spending is growing. The richer we become, the more health care we want to consume. That is as true for countries as for individuals. In the UK after decades when investment in health care fell behind today we have the fastest growing health service of any major country in Europe. Six years ago health care spending was falling in real terms. By 2008 it will have doubled in real terms.

So far so good. And it helps to be an optimist if you are a health minister. However, as Aaron Wildavsky, the eminent policy analyst, once put it: we are ‘doing better but feeling worse’. The danger is that feeling becomes the norm in health care. The weight of public expectation today is enormous. The advent of the consumer society sometimes looks as though it will overwhelm health care systems regardless of how they are structured or funded.

I do not believe that is inevitable. But it requires the courage to change health systems that have got out of tune with the age in which we now live. I believe it requires the forging of a new relationship between services and patients. Where patients are no longer on the outside – purely passive recipients of care – but are on the inside with the power to make decisions and choices about health care.

Reform has never been more needed – or more pressing. In every one of the countries represented here tonight health care reform is at or near the top of the political agenda. This year’s Commonwealth Fund symposium gives us a unique opportunity to understand how lessons learned in one country could be applied in another.

Let me describe how we are approaching reform of the NHS in England.

The National Health Service is pretty unique. It is tax funded and has given Britain a single health care system where services are free at the point of use, based on the needs of patients not their ability to pay. For many, the NHS is part of what it means to be British. It expresses values that are ingrained in the British character

– fairness and decency, compassion and a belief in the power of community. Social justice as a legitimate objective for the nation. And yet for all its great strengths

– its one million staff, its ethos of public service, the great advances it has brought in public health

– the NHS has profound weaknesses. In the fifty years since it was formed the health gap between rich and poor has widened. Too often the poorest services are in the poorest communities. Its centralised top down structure too often stifles local innovation. Staff too often feel disempowered. Local communities feel disengaged. Patients have little say and precious little choice.

Our reform programme seeks to remedy these weaknesses in order to build on the NHS great strengths. At the time the NHS was being formed as a nationalised industry in the UK elsewhere governments – many on the centre left – were creating institutions which favoured greater community ownership over state ownership. As those other nations testify there is no automatic correlation that tax funded health care has to mean health care supply run purely by cental government. In today’s world, tax funded health care can only be sustainable if it sits side by side with diversity in provision and choice for patients.

The NHS scores well on fairness but is weak on choice. Crucially patients wait far too long for treatment. Our reforms seek to preserve equity but improve access. Getting this balance right is what every health care system is struggling to achieve.

In Britain we started five years ago by putting new national standards and a new system of independent inspection in place to tackle what had become a local lottery in services. Priority setting – for decades avoided – has become more open. The National Institute for Clinical Excellence now assesses which treatments are clinically cost effective and should be available to NHS patients. There is no health care system of course that is able to avoid making these decisions. The issue is about how best to do so not about whether it has to be done. And as the accumulated experience of Oregon, New Zealand and elsewhere has shown no system is perfect. In the end, however, in a public service the public have a right to be involved. NICE in appraising health technologies and issuing guidelines already involves patients and the public as well as drawing on expert advice. By the end of this year NICE will have established a Citizens Council to give the public a direct say on the decisions it makes. This is about putting the public on the inside of health care rather than keeping them outside. Dealing with dilemmas – that is what clinicians and policy-makers have to do every day in any health care system. The relentless march of medical advance and public expectations demands that we enlarge the decision-making tent so that more share its rights – and its responsibilities.

Government alone cannot solve health care problems. New relationships are needed both with those with using health services and those providing them. There is a clear role for government of course in setting standards and objectives that ensure equity in provision. In holding the system into account. In stepping in when there is failure in order to uphold standards. But increasingly stepping back to ensure success. In Britain we have learned that a million strong NHS cannot be run from Whitehall. It has got to be run by the local staff and held to account by the local community. We are now at the start of a transition where more and more decisions are taken locally rather than centrally. Where the old style monolithic structures are broken up so that we do not just invest extra resources in frontline services but place power and trust in those frontline services. The simple truth is that health care works best – as Kaiser Permanente have shown here in the US – when it harnesses the commitment and knowledge of clinicians to improve care for patients. The collaborative programmes – pioneered by Don Berwick and others here and now taken up in the UK – are delivering staggering results in reducing waiting times for patients precisely because they shift control to where it counts – on the frontline.

They are helping move health care in Britain from a 1940s model – top down and centralised – to a twenty first century model where standards are national but control is local. Securing improvements in services does not require one – it needs both.

From next April three quarters of the total NHS budget will by controlled by 300 locally run primary care trusts able to purchase care from public, private, voluntary or not-for-profit health care providers. The three year budgets that these primary care trusts will hold will allow them to reshape local services in the interest of local patients. So that there is a greater emphasis on prevention and not just treatment. More intermediate care alongside hospital care. More local services so that people can avoid hospital by being treated in the community. Over these next few years we estimate that as many as one million outpatients appointments could be taken out of hospitals and delivered by primary and community services. That will mean less pressure on hospitals and more convenient care for patients.

I want us to go further still. I have been particularly impressed by evidence here in the US from United Healthcare’s “Evercare” model for older people which, by expanding services in the community and intensively monitoring patients’ conditions to catch illness early, is reducing hospitalisation rates and improving health outcomes. We are in the final stages of agreeing to pilot this approach in Britain in partnership with United Healthcare Group.

An explicit objective of our reforms is to encourage greater plurality in the range of services available to patients. And greater diversity in the range of providers. With more NHS patients treated in private sector hospitals. Greater use of the skills of voluntary and community organisations. New private sector providers becoming a permanent feature of the NHS landscape.

This is about redefining what we mean by the national health service. Changing it from a centrally run monopoly provider to a system where different health care providers – public, private, voluntary and not-for-profit – work to a common ethos, common standards and a common system of inspection. In such a system wherever patients are treated they remain NHS patients because they get care paid for by the NHS according to NHS principles. This is the modern definition of the NHS.

The implications of this redefinition are profound. It means that NHS healthcare does not need to be delivered exclusively be line managed NHS organisations but by a range of organisations working within a national standards framework. The task of managing the NHS becomes one of overseeing a system not an organisation. Accountability becomes more local not national. The shift is from running a large organisation around particular targets towards overall systems performance and health outcomes. In turn that will allow a better concentration on tackling inequalities and improving health rather than just on improving health services.

These changes redefine the role of government too – no longer running but enabling. One of my greatest predecessors as secretary of state for health Nye Bevan – the man who brought the NHS into being – once said: the purpose of getting power is to be able to give it away.

And today there are more pressing reasons than ever for doing so. Not least to re-invest trust in clinicians who for decades have felt that ever more rigorous systems of accountability have undermined their authority. Today it must be a priority to re-engage them. And I believe we can only do so if governments are prepared to transfer control not just to clinicians and managers providing frontline services but to the communities who use them.

In health care the crucial relationships are local ones. Between the doctor and the patient. The community and the hospital. Ownership today needs to be local not national. That’s why we plan to give local communities – alongside local staff – control over the best performing local NHS hospitals. A new generation of NHS Foundation Hospitals will be run by local people not national politicians.

This too is about putting the public on the inside. Some will say that the risks are too great. That health care has to be determined by politicians and professionals. I think the risk is quite the reverse. If we keep people out they will demand more not less from a system that will not be able to cope. Health care today needs to embrace the public as partners not as passive recipients. The spread of universal education has made for a more inquisitive and demanding public that is less willing to accept that politicians or professionals always know best. The internet is redistributing knowledge. Information that used to be the preserve of the doctor can now be accessed by the patient. None of this is going to go away. It is here to stay. It is here for good. And I believe that, despite the pressures it brings, in the end it is a force for good.

The evidence suggests that the informed patient is a better patient. In arthritis care for example educating patients and increasing their role in self-management has been shown to produce better outcomes. Patients with chronic conditions – a growing proportion of the cared for population – have to live with their condition every hour of every day. They need to have a greater role and a bigger say in their own care.

The emergence of more informed and expert patients has profound implications for relationships between patients and health care professionals. It means professionals taking patients into their confidence. Communicating better. Acknowledging risks as well as benefits. Actively seeking consent. Owning up to mistakes not covering them up. Earning trust, not just assuming it.

Public services do not belong to professionals, still less to politicians – they belong to the public who use them and who fund them. Services – whether they are private or public – succeed or fail according to their ability to respond to modern expectations. In today’s consumer age hey have to be tailor made to the needs of the user, not mass produced to the convenience of the producer. That is why for the first time the views of patients themselves now influence the performance ratings – and therefore the resources and freedoms – each NHS organisation receives.

A modern health service is one in which patients can exercise more power. And that means more choice. In Britain we are moving to a system where, for the first time, within the NHS, patients will be able to choose the hospital, the time of treatment and even the doctor that is best for them. And because resources will follow the choices patients make it will provide real incentives for improvements in performance. Those hospitals that perform best will get more, those that 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 services as in the private sector. It will take time to get there of course. But when we do it will put patients in the driving seat – at the heart of the health service – and not before time.

And giving patients more rights makes it easier to demand more responsibilities. To use services appropriately. To treat health care professionals respectfully. To contribute to their own health and wellbeing. To help others through blood donation or organ donation. To acknowledge that there are limits to what any health care system can provide. To give as well as to take.

That is what co-operation and partnership are all about – giving as well as taking. When President Bush met Prime Minister Blair in April, the President made the following commitment on behalf of our two nations “even as we work to make the world a safer place we must also work to make the world better.”

Earlier this month Tony Blair echoed this commitment. He said:
we need coalitions not just to deal with evil by force if necessary, but coalitions for peace, coalitions to tackle poverty, ignorance and disease.

Today half the world’s people live on less than $2 a day. Hunger remains endemic. 10 million children die each year from preventable childhood illnesses. Millions more die from AIDS, TB and malaria. And yet the gap between where we are and where we could be is not so great. There are effective and relatively inexpensive ways of tackling HIV/AIDS, malaria, TB, and childhood infectious diseases. Support is needed – in cash of course – but also in kind. Developed nations could do so much more to help the developing world build the skills and the capacity that are needed to deliver effective health services. Our nations have an abundance of skills in health. It is time we shared them with others. And perhaps the Commonwealth Fund could consider how best we do so.

A world of open borders and easy travel, mass migration and rapid information means that a problem somewhere can quickly become a problem everywhere. In this interdependent world common problems do indeed call for common solutions. The events of the last year have brought home to all of us that our countries cannot enjoy the fruits of growth and development oblivious to the challenges faced by the rest of the world. Terrorism thrives only when one set of moral values look to others immoral. If one part of the world stands aside from the problems of another. If prosperity seems indifferent to poverty. If resources and skills are used for the benefit of some but not for all.

Defeating terrorism calls for a war on all fronts. In the end we will defeat terrorism because it is the enemy of all nations and all faiths. The enemy of humanity itself. We will defeat it of course by intelligence, by police and even military action. By the vigilance and the support of our peoples. But we will defeat it also in the triumph of the values that terrorism abhors – tolerance, freedom, the rule of law, the respect for human life.

These are the values which unite the nations of the Commonwealth Fund. They are the values which inspire us to share perspectives on common problems in health care and encourage us to co-operate in pursuit of solutions to them. I want to thank our friends and hosts here in the USA and wish us all a positive and productive few days at this Symposium. I believe the strength of our common endeavours this week demonstrates that health is no longer just a matter of domestic policy. Health policy today is truly international: shared challenges across boundaries; shared solutions between countries and a shared understanding that the interests of the developed world are linked inextricably to those of the developing world.

Below is the text of the speech made by Alan Milburn, the then Secretary of State for Health, on 17 October 2002.

In just four years the NHS Alliance has become a force to be reckoned with. In Mike Dixon and his colleagues you have leaders who not only champion change but who argue the cause of primary care.

And today I want to set out to you how I believe primary care can lead the reform and reshaping of health care in the whole of our country. Whatever the problems there are in primary care – and I know they are real – there has never been a better opportunity for primary care – than we have today.

Our country’s family doctors are the backbone of the NHS – and the service they provide is not just valued by patients in this country it is envied in other countries across the world. So when some newspapers imply that the NHS is full of bad doctors let us just so this: it is full of good doctors doing their best for patients. And good nurses, therapists, administrators and professionals helping provide care for one million patients every day. I believe it is time that we as country said that we are proud of the work that you do. As a nation we owe you an enormous debt of gratitude.

People in primary care are working under real pressure but you are delivering real progress. In recent years you have helped chalked up significant achievements in which all parts of the service can share.

In primary care itself where waiting times are coming down. Where 3 in 4 patients can now see a GP within 2 working days. Where the growth in prescribing of cholesterol-lowering drugs is contributing directly to reduced deaths from heart disease.

In hospital services too, there is progress. A year ago people could wait up to 18 months for their hospital operation. Today, the maximum wait is at 15 months and coming down, moving towards the NHS Plan guarantee of a maximum 3-month wait. For cancer and heart disease, waiting times are coming down faster still – and most importantly of all mortality rates are falling too.

Of course huge problems remain. The pressures are real. Staff shortages are still there. Waiting times are still too long. But after decades in which the NHS was at best standing still and at worst going backwards the momentum is now forwards. There is a long way to go but I firmly believe the NHS has turned the corner. The NHS Plan is on course to be delivered. And we should now be confident that we can move up a gear.

This progress is all the more remarkable because it has been accomplished against a background of significant organisational change. Health authorities and Regional Offices have gone. Primary Care Trusts and Strategic Health Authorities are up and running. The transition has gone better than many feared. And that is thanks to you. Managers, clinicians, non-executive directors.

The NHS – with your leadership – can look to the future with confidence. No-one should doubt the significance of the next few years. It really is “make or break” time. Either we prove that the NHS can become a service where the interests and choices of patients always come first, or we reconcile ourselves to the fact that the NHS – great in principle – simply could not cut the mustard in practice in today’s world. Bold steps to radically reform the health service are now needed if we are to secure the improvements in health and health care that our country needs.

We should be confident first of all because the values of the NHS are right and indeed are more relevant than they have ever been. In a world where health care can do more – but costs more than ever – before, an NHS that is free at the point of use based on need not ability to pay – is the right way forward for Britain. With the NHS the health of each of us depends on the contribution of all of us. It gives the people of our country health care, not as a commodity to be bought and sold in a market but health care as a right we all enjoy as equal citizens in a fair society.

Frankly it offends against that principle when some propose as they do that the taxpayer should subsidise private health insurance so that those that can afford to pay in a voucher scheme get a fast-track to treatment ahead of those with a greater need but a smaller purse. The sick paying to be sick and the worse off paying for the better off could only create a two tier health care system that would be both expensive and divisive.

Such a proposal can only succeed if the NHS fails. So the stakes are high for all of us who believe in the values of the NHS. And here, although this is difficult we have to be honest with one another. For all its great strengths – its staff, its ethos of public service, the great advances it has brought in public health – the NHS has profound weaknesses too. Health inequalities have widened not narrowed. Too often the poorest services are in the poorest communities. Its centralised top down structure too often stifles local innovation. Staff too often feel disempowered. Local communities feel disengaged. And patients have little say and precious little choice.

Our job together is to remedy these weaknesses so that we can build on the NHS great strengths.

How do we do that? We do so in the first place by addressing the legacy of decades of under-investment not just in the health service but in our social services too. The Budget on April 17th marked a watershed for both. Social services will get twice as much next year as they are getting this year. And for the NHS it is worth remembering that while just six years ago funding was falling in real terms, by 2008 it will have doubled in real terms.

But when people are asked to pay more in tax to get more into the health service they will quite rightly want to see extra resources delivering real results. Not just improvements in services for patients but services that are responsive, where patients have choices, where quality always comes first. This is the challenge together we must now meet.

I believe that we are in a strong position to do so. NHS funding is secure. Progress is underway. There is a ten year NHS Plan with a major programme of reform to match the programme of investment.

It is these reforms that hold the key to delivery.

As both the NHS Plan and our more recent follow up command paper Delivering the NHS Plan made clear, it is right that standards are set nationally but wrong to run the NHS nationally. The job of government is to set standards and objectives that ensure equity in the provision of health care. Our job is not to run the NHS. Indeed 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. That is something which the new strategic health authorities in their relationships with PCTs need to fully understand: PCTs need to be helped and enabled not commanded or controlled.

The more overall performance improves – as I am confident it will as the reforms and the resources bite – the more autonomy will be earned across the whole NHS. That is what I want to see. We are now at the start of a transition where more and more decisions will be taken locally rather than centrally. Where we move from a 1940s NHS – top down and centralised – to a more modern system where standards are national but control is local. Where those who are doing less well get more help and those that are doing best get more freedom. Reform cannot be achieved by holding on to the monolithic, centralised structures of the 1940s. We cannot reform by looking backwards. We need to look forwards. Reform means investing not just extra resources in front line services, but power and trust in those front line services.

I believe that process will now gather pace. From next April Primary Care Trusts will be in charge of three-quarters of the NHS budget, able to commission services as they see fit. The reason for this is simple enough. I don’t treat a single NHS patient. NHS staff do. Whitehall doesn’t provide care. That is what local hospitals, health centres and surgeries do. And that is where power needs to be located. On the frontline. It is time to unleash the spirit of public service enterprise that I know exists in so many parts of the NHS.

PCTs need to lead that process. And I want to help you do so. PCTs exist for two main purposes. One so that there is a local organisation holding the resources and the responsibilities to improve the health of the local population. And two, to commission care that gives local patients the services that are right to meet their needs.

I have often heard it said – even at this conference – this is all very well in theory but in practice the resources are already spoken for with too many national priorities, hospitals that drain all the investment and primary care that inevitably loses out. I want to take that argument on today – and to set out how, by working together, we can ensure that more not less services are provided in primary care and that PCTs are able to exercise real power.

So, while over the next few years there will be more money in PCT budgets there will be less ringfencing by central government of those local budgets. And in place of the current maze of annual agreements and duplicated plans, local health services will be able, as I’m sure Nigel set out this morning, to put together a single delivery plan for the medium term rather than the short term. These plans can focus on delivering improvements in the areas that count most for patients – waiting times (including in primary care), emergency care, cancer, cardiac, mental health, elderly and children’s services.

I can confirm today that when we allocate resources direct to local primary care trusts later this year they will get budgets not just for one year but for three. This will allow you to now plan with certainty to increase capacity over the longer term. Short term funding has hindered long term planning. Now you will be able to decide which local developments will take place when. And three year budgets will allow PCTs to decide longer term agreements with hospitals and with other providers.

Let us just be clear on this point: PCTs now have the explicit freedom to purchase care from the most appropriate provider – whether public, private, voluntary or not for profit. This is about redefining what we mean by the National Health Service. 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 such a 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.

And a modern NHS is one in which patients have power. And that means they have got to have choice. So that if their local NHS hospital cannot offer them a short enough waiting time but another hospital can they can decide to choose with the help of their GP. We have made a start by offering choice to heart patients. By the end of 2005 we aim to have all patients needing a hospital operation in every part of the country have a choice over the hospital, the time and even the consultant that’s best for them. And it will be family doctors and community nurses who can ensure that patients are able to make informed choices.

As NHS capacity expands so choice will grow. Resources will follow the choices that patients and PCTs make so that hospitals who do more get more; those who do not, will not. Making choice available for the first time on the NHS will strengthen PCT power to commission services that are in the best interests of patients.

And we want to help PCTs develop this commissioning role. At present I know that when it comes to negotiating contracts it can feel like the hospitals hold all the cards. But remember this – you hold all the money. And we want to create a more level playing field. We are planning to build up PCTs’ capacity to commission first through the national PCT development programme, then through the new NHS University. I want the NHS Alliance to be part of this process – so that every PCT in every part of the country has the information, the skills and the resources to get the best deal for patients. And when we start to introduce a common tariff system for hospital operations over these next few years it will take out of the local negotiations between PCTs and hospitals the very areas where you are weakest – on prices – and leave those where you are strongest – on quality of service and outcomes of care. PCTs need their local hospitals – but not at any price. Hospitals need to deliver – and PCTs need to demand the right standards of services

It is time PCTs stood up for themselves. I know that many feel honour bound to the local hospital. But the job of PCTs is to get the right services for patients. They need to flex their financial muscles and use their commissioning powers. The truth is that delivering shorter waiting times in hospitals – whether in A&E or for an operation – cannot simply be delivered by more activity in hospitals. It requires more intermediate care services, more social care services, more primary care. It needs more help so that people can avoid hospital by being treated in the community. It needs more services in the community so that those people who do need hospital treatment can return home when they are ready to do so. It needs a greater emphasis on prevention and not just treatment. A bigger role for self care through NHS Direct. Better use of pharmacist skills. More walk in centres and community hospital services to build a bridge between the big acute hospital and the patient’s home.

Some PCTs are already grasping these opportunities. Many more can now do so. It is time to shift the centre of gravity in the NHS. In these next few years – with funding on a sustainable footing for the longer term – PCTs have a huge opportunity to reshape local services in the interests of local patients. Of course patients need more hospital services which is why there is the biggest programme of building new hospitals the NHS has ever seen. It is why after decades when hospital bed numbers were cut back they are finally being built up. New diagnostic and treatment centres are going up. New equipment is going in. Hospitals have more staff – and there are more to come.

Hospitals have a secure future. But health care is not just hospital care. And with hospitals under real pressure they have to be freed up to concentrate on providing the specialist services in which they excel. So as every PCT knows with the right level of investment and the courage to make these reforms many more patients could be treated in the community.

Some are already doing that. In Hampshire the local PCT and the local Trust are now using a new primary care diagnostic centre to provide vascular services in the community rather than in the hospital. In many areas – including my own – patients needing minor surgery such as a vasectomy or the removal of a skin lesion now have their operation in the local surgery rather than in the local hospital. We need more not less of this. The presumption surely must be that only those procedures that need to be done in hospitals – for safety reasons and clinical reasons – are actually done in hospitals.

Take outpatients. Over these next few years we estimate that as many as one million outpatients could be taken out of hospitals and delivered by primary and community services. That will be mean less pressure for hospitals. More convenient care for patients. And a bigger role for primary care services.

This is happening already – but only on a small scale and in some areas. I would like it to become the norm in all areas.

It will mean developing more GPs and nurses with a specialist interest capable of diagnosing and managing a range of conditions that currently require hospital referral. In Huntingdonshire GPs specialising in dermatology have helped reduce waits from 36 weeks to 4 weeks. In Bradford, GPs who are now running outreach clinics providing ENT services have reduced reducing waiting times from 60 weeks to only a few weeks. Optometrists treating patients have reduced referrals to hospital ophthalmology services by almost two-thirds. If it can happen in these places it can happen in all.

But it will require PCTs to have the confidence and the courage to put their money where their mouths are. Into building up primary care not as an alternative to hospital care but as an addition. It will require significant investment in facilities, equipment and above all staff.

Patients being treated in primary care can only grow so long as capacity in primary care grows. And here too we want to help.

For the very first time in the history of the NHS we have set out a clear investment programme to improve the primary care estate. The NHS Plan set out our proposals to refurbish or replace up to 3,000 GP premises and to develop 500 one-stop primary health care centres. Over 1,000 premises have already been modernised. There are many more to come.

And we need many more GPs too. Progress here has been slow and we need to up the pace. But crucially after years when GP registrar numbers fell back they are now at their highest ever level. The trick is to persuade them to become fully-fledged GPs. Proper rewards and a new contract will, no doubt, help. Better childcare and more flexibility in how people are employed will help too.

But in the end I believe the biggest difference will be made by giving GPs better control over their working lives and greater ownership over the process of change. And this is where PCTs have such a crucial role to play. Just as we are devolving power and resources from Whitehall to local PCTs so local PCTs need to devolve to local practices. The PCTs need to get practices and clinicians – nurses as well as doctors – involved in reshaping local services. Every time I visit a practice and speak to a GP or a practice nurse what strikes me most is their absolute determination to raise standards in order to provide the highest quality services to their patients. Our job – together – is to harness that commitment. If we do it will not be “meltdown” for primary care. It will be the making of primary care.

The challenge for PCTs in the NHS is the challenge for all of us who care about its future – to take the opportunity of the new resources and use them to transform services for patients.

– To diversify a service which has been too monolithic for too long.

– To decentralise a service which has been centralised for too long.

– To build capacity in the service which has been neglected for too long.

– To bring choice to a service where none has existed before.

– PCTs are there for a purpose – to develop local services that genuinely meet local needs.

I do not underestimate the challenge nor the difficulties ahead. But neither do I underestimate the innovation, initiative, expertise and skills that exist in PCTs.

Only PCTs can lead these changes. You exist not to maintain the status quo – but to change it.

You have the powers and the resources to do so – now is the time to use them.

Below is the text of the speech made by Alan Milburn, the then Secretary of State for Health, to the Annual Social Services Conference, Cardiff, Wales on 16 October 2002.

This is the fourth year I have addressed your conference as Secretary of State for health and social services. Each year I have been able to report on real progress in the delivery of social care. I am pleased to say that this year is no exception. You have delivered more intensive support to help more older people live independently at home. Your co-operation with the health service has reduced delayed discharges from hospital. You have helped 10% more looked after children to be adopted.

Social services – local authorities, voluntary organisations, private sector providers – make a difference – every single day.

You make a difference when the foster parent, the teacher and the social worker help a child who has been in care all their lives get through school and then on to college.

You make a difference when the therapist and the advocate help a young man with a learning disability get training and then a job.

You make a difference when the home help and the social worker help an old lady return home after hospital to regain her confidence, her dignity and then her independence.

So, I want to thank you for what you have done and for the vital role you play in delivering care and offering hope to millions of people in our country. Good social services – and social workers – are valued. They do not deserve to be vilified.

Yet, today I believe social services are at a crossroads.

You are under scrutiny as never before. For all the millions of successes, it is the lapses in social services that still corrode public confidence. All of us here know that if social services fail, the consequences fall on the most vulnerable people in our society.

It would be comforting to believe the problems confronting social services stem purely from a hostile media. I do not believe they do. They stem in my view from a much deeper failure – a failure, which we all share, that has allowed the way we deliver social services to get out of step with the society we serve.

In the half century since the Welfare State was founded, and in particular, in the thirty years since Seebohm formulated the modern concept of social services, British society has undergone profound changes.

Fifty years ago, if you got a job, it was for life. Today, while the new global economy has brought more opportunities for prosperity than ever before, there is more insecurity and uncertainty. While unemployment has fallen sharply in recent years social exclusion has found new expression. Prosperity has widened but poverty has become more entrenched. Joblessness has become more concentrated in certain communities and amongst certain families. New social problems – particularly the link between drugs and crime – have emerged.

Family structure has undergone profound change. Family breakdown is more common. Teenage pregnancies are still too high. For the first time older people outnumber children in our society.

Public expectations have changed too. Thirty years ago the one size fits all approach of the 1940s was still in the ascendant. Public services were monolithic. The public were supposed to be truly grateful for what they were about to receive. People had little say and precious little choice.

Today we live in a quite different world. We live in a consumer age. People demand services tailor made to their individual needs. Ours is the informed and inquiring society. People expect choice and demand quality.

These changes challenge all our public services. For some, these changes call into question the very values on which health and social services are based. They say, public services must inevitably fail because they always put the needs of the institution above the needs of the individual. For them the only solution is a free market solution.

Nothing could be more mistaken. Think about it. A privatised health care system based on ability to pay not the depth of need would leave those needing health care most able to afford it least. Delivering up youngsters in care to the whim of the free market would only mean more lives paid for in drugs, delinquency and despair. We have lived through the decades when there was apparently “no such thing as society”. Society was poorer as a result. We all ended up paying the price. I believe that we must not pay that price again.

The values that underpin our social services – the recognition that we do achieve more together than we ever can alone – are more relevant today than they have ever been. The problems society faces today call for modern active social services.

It is the means of delivery – not the values of social services – that need to change.

Delivery requires investment. It is a fact that for too long social services have been the poor relation in the public services. Investment in social care has failed to keep pace with today’s challenges. You can see the impact of decades of neglect in high staff vacancy rates and staff who work under real pressure. I believe that we now have the opportunity to put that right.

A year ago I said at your conference that social services needed more resources. In the lead up to the Budget I fought for those extra resources. The Budget secured them. From April 2003, for the next three years, real growth in social services investment will double compared to the last three years. Whereas just six years ago real terms spending on social services was rising by just 0.1% a year it is now set to rise by 6% a year.

The extra resources will help get the extra staff we need. A year into the national social work recruitment campaign which I launched at last year’s conference we have already reversed the trend in falling applications. Over the next three years we can look forward to 50,000 more social care staff.

New challenges call for new skills. I think you all know the complexity of modern social problems requires more specialised skills not just the traditional general mix of social work skills. So I am today, asking the General Social Care Council, training organisations and local government to work with us to develop new types of social care professional.

People who can work in the community, combining the skills of the therapist and the home help to provide rehabilitation alongside home care. Family care workers combining the skills of the health visitor and the social worker to provide family support in times of trouble.

The extra resources give us the opportunity to make these reforms.

Of course, extra resources can not solve every problem but having made the case for extra investment in social services local government now has to spend those resources on social services.

Here I think that there is a tension: different communities have quite different needs – and that calls for a greater local say. And yet it must be right that an older person in one part of the country is able to enjoy similar standards of care to an older person in another part of the country – and that calls for proper national standards. Better services are not a choice between national standards and local control. Raising standards requires both. Getting the right balance holds the key to securing these improvements.

There was a time when there were no national standards. When care was a local lottery. I do not believe anyone who is serious about ensuring fairness in social care wants to go back to those days. Equally with national standards, tough inspections and performance ratings all now in place I believe the time is now right to shift the balance of power – to greater local autonomy. So I can tell this conference whilst there will be more resources for social services, there will be less earmarking of those resources for local government by central government. Today 17% of social services spending is ring-fenced. That will now fall to 15% next year, 11% the year after and 9% the year after that.

The Local Government White Paper sets out the basis for a new partnership between Whitehall and the town hall as a means of rejuvenating local democracy. Where councils have greater financial freedoms. Where inspection is more proportionate. Where local councils have powers to scrutinise local health services and ensure the well-being of local communities.

And we can go further. The new governance arrangements we will shortly bring forward for the first generation of NHS Foundation Hospitals will mean local government can represent the local community in the running of the local health service too.

We are moving into a whole new ball game with brand new rules: where flexibility and freedom come in return for delivery and reform. As performance improves – as I am confident it will – greater autonomy for social services and local councils will be earned. Those that are doing best will get more freedom. Those that are doing less well will get more help. Where there are persistent problems central government will step in. Where there is progress we will step back.

Those councils that enjoy the highest star ratings will get significant freedoms: reduced inspection; the right to carry over resources between one financial year and the next; the freedom to spend social services grant on any aspect of social care free from ring-fencing altogether. And I can tell this conference that, together with the Deputy Prime Minister John Prescott, I am examining further freedoms still for the best performers.

The better you do the more you get. That is a discipline that needs to apply just as much in the public sector as in the private sector. Both to provide a reward for those already the best – and to provide an incentive for those who can to do better.

At the other end of the spectrum there are a small minority of councils where social services are persistently in trouble and, frankly, failing to deliver. Here a different approach is needed. Here, central government can not stand idly by. We have a duty to act to uphold standards in care. And when we do it works.

Of the 21 councils put on special measures in the last few years, 18 have improved their performance. Since August, where there have been more entrenched problems still Performance Action Teams – put together by the private sector but involving the best of the public sector – have gone in to social services departments to strengthen management structures and improve service delivery.

And in extremis where there is endemic failure and where this form of external support also fails, I will use powers under the Local Government Act to appoint a nominee to take over the running of the local service. The nominee will be able to make radical recommendations about how the service is delivered and crucially how more effective local partnerships can be developed.

Today over half of all councils have broken away from the old monolithic, single social services departmental structures towards greater specialisation and more integration with other service providers. I want to set out now how I believe we can help you take this process further.

The old style, public service monoliths can not meet modern challenges. They need to be broken up. In their place we can forge new local partnerships that specialise in tackling the particular problems local communities face.

Combating social exclusion, breaking the link between drugs and crime, securing for elderly people dignity in old age is beyond the remit of any one organisation.

Dealing with these new challenges demands new forms of organisation: that enlist support in the community as well as of statutory agencies; that harness the expertise of the private and voluntary sectors alongside the public sector; that recognise that in the modern world people will no longer tolerate inflexible services from competing systems but demand instead flexible services from a single care system.

In recent years social services who have led the effort to break down boundaries and build up new partnerships. Two thirds of social services today are provided by the private and voluntary sectors. The 600,000 social care staff who work in those sectors provide the majority of home care and residential care. Most looked after children rely on foster carers. The voluntary sector today is the mainstay of learning disability services. New initiatives like Sure Start have put community and charitable organisations centre stage in delivering what are mainstream public services.

I believe that the voluntary and community sector has an even greater role to play. If we are to activate local communities to help deal with the problems they face – rather than simply complain about them – now is the time to bring those organisations in from the cold.

So I can tell the Conference I have asked the Strategic Commissioning Group – chaired by my colleague Jacqui Smith – to report to me on how local voluntary and community organisations could play a bigger part still in the delivery of social services.

Government, central or local, no longer needs to provide every public service. Gone are the days when Whitehall or indeed the town hall always knew best. What counts today is the quality of the service, not the origin of the provider. And today the sheer complexity of the social problems facing us call for services that are less homogenous and more specialist.

The job of providing services to children in need is a very different job from services to the elderly person. The one size fits all approach embodied in the traditional social services department may have been OK in the 1970s, but as more and more councils are recognising, it does not belong to today.

Let’s take children’s services. Every child deserves the best start in life. They need services that lift them up and keep them from harm. Mostly that is what social services deliver. Sadly, sometimes they do not.

Two years ago Victoria Climbie died in the most appalling circumstances. No one who has heard the evidence to the independent inquiry I established under Lord Laming could fail to be shocked by what occurred. Quite simply services which should have protected a vulnerable child failed that child.

When Lord Laming delivers his report it will consider what changes are needed to the whole system of child protection in our country – and we will consider his findings carefully.

We will also be considering the conclusions of this week’s report from the SSI and other Inspectors into safeguards for children. And later this year we will publish the first strand of the new children’s national service framework which will set out for the first time clear standards for all of our children’s services.

There is much that remains to be done despite the achievements of Quality Protects. Our goal surely has to be to give the children in care the same opportunities as every other child: to be part of a family; to do well at school; to get a job; to have a home; to live a life free from drugs and crime. But progress towards this goal is still too slow.

Today I can outline extra resources to help us do better. To reduce the number of children in care. To bring about improvements in life prospects when children leave care. Growing up in a stable family provides the best environment for children to develop. So over the next three years over £180 million will be made available to expand and strengthen fostering services and to provide extra support for adoption so that more children get the chance of growing up as part of stable and loving families.

Some children of course need further help still. Around one in ten aged between 5-15 years old have a mental health disorder. Tackling poor educational achievement, dealing with youth offending and other behavioural problems calls for a major expansion in child and adolescent mental health services. So I can announce today increased investment of £140 million over the next three years, to build capacity, improve access and, together with new NHS investment, to help deliver for the first time a comprehensive CAMHS service in each and every area.

To get the best from these resources, there will need to be reforms. All too often traditional service boundaries get in the way of good care for children. The local education service can be pulling in one direction with health going in the other and social services going another way still. That brings failures of communication as well as organisation. Children and parents get passed around the system. Confusion means that services intervene later when they should be involved sooner.

Fragmented decision-making is not delivering the best for anyone. I believe it is now time to develop more specialised local organisations which pool the knowledge, skills and resources that exist in our education, health and social services to provide a more seamless service for children.

So I intend to create specialist Children’s Trusts to jointly plan, commission, finance and – where it makes sense – deliver children’s services. Children’s Trusts which commission services will be based firmly in local councils with the power for the first time to commission health as well as social care. And for those Children’s Trusts that want to specialise in providing services we will want to explore a range of models in different parts of the country. These could potentially include local, not for profit, public interest companies that could enlist the involvement of the community, voluntary and private sectors alongside the public sector.

We want to pilot this new approach so in December this year my department alongside Estelle Morris’ will ask for expressions of interest from local organisations keen to test how Children’s Trusts could improve local services.

Children’s Trusts can help you dramatically reshape how social services are organised and delivered. Many of you have already taken advantage of the NHS Act flexibilities we introduced two years ago . They have allowed health and social services to work more closely together through at least 160 local partnerships delivering services now worth £2 billion a year. These services are breaking down barriers between services so that people who are elderly or have a mental health problem do not have to deal with two different – sometimes competing– systems. You know as well as I do that health and social care sink or swim together. They both need each other. The older person needs both.

Care Trusts provide another means to this end. Some are already in place. More will follow next year. Later this month we will launch a new national Integrated Care Network to provide more support and encourage wider take up. In the next two years I expect to see health and social services in every part of the country pooling resources and skills to deliver a seamless service for older people – either through a Care Trust or through use of the existing Health Act flexibilities. In time this should become the norm for how elderly care services are provided and commissioned.

In the meantime we intend to legislate to ensure that conflict between health and social services does not get in the way of older people receiving the care they need. I am continually struck when I visit health and social care around the country by the power of partnership when it works. But when it does not, it is the older person who suffers.

Delayed discharge from hospital is a particular problem affecting 5,000 older people at any one time. Thanks to your help and the resources we have made available, delayed discharges from hospitals have fallen but this has been achieved only through a short term fix of ringfenced money, top down targets and intensive monitoring. I do not believe this approach is sensible or sustainable for the long term.

In any partnership people have to know who is accountable and who is responsible for making things happen. So where people are needlessly waiting in hospital for social services to become available, we will shortly legislate so that councils reimburse the hospital for the cost of the bed the person occupies. This will provide an incentive – which does not currently exist – to end the misery of what is sometimes pejoratively called bed-blocking but is in fact thousands of older people needlessly trapped in hospital when they are well enough to be cared for in the community.

Councils that enjoy positive partnerships with the NHS – and those that are prepared to invest extra resources to build up capacity – have nothing to fear from this policy. Indeed the policy should help social services get the money spent on social services. It is not about punishing councils, still less about forcing them to fund people who wait for services that are not their responsibility. The policy will guarantee more seamless services for older people. I hope what ever your reservations might be, you will now work with us to deliver this reform.

It is all about putting the users of services centre stage. You can already teach the health service a thing or two about that. But today I want you to go further. If social services are going to genuinely put users first then those users have got to have more power. And that means more choice.

Choice is not just a question of consulting users or promising to take their views into account. Nor is it just about making advocacy services more widely available. It is all these things – and I believe that it is more.

Choice means opening up a broader span of services so that care can be tailored to fit the needs of the individual rather than assuming the individual will simply fit the off-the peg service.

In elderly care for example local councils will want to use some of the extra £1 billion we will provide over the next three years to stabilise the care home market and to buy extra care home places. But different forms of care are needed for older people too, in order to widen choice and promote independence. More intermediate care and better rehabilitation services through partnership with the health service. More extra-care housing in partnership with housing associations. More intensive home-based support. Free community equipment for the first time. And greater backing for our country’s carers. So more older people get what they say they want – help to live more independently for more of the time at home.

It is right that the generation which created our great public services should have more direct choice over those services. So I can confirm today that I will shortly be laying regulations in Parliament to ensure that all older people assessed as being in need of care – whether for rehab after a hip operation or for a bit of help with household chores – have, as of right, for the first time, the choice of receiving a direct service or instead receiving a direct cash payment to purchase care that better suits their individual needs. Direct payments will give older people direct choices over the services they receive.

And to ensure these are informed choices, I can also announce today that we will make available £9 million to help older people’s and other voluntary organisations make a reality of direct payments not just for tens of thousands of older people but for thousands of adults and the parents and carers of disabled children too.

It is local government that has called for devolution and decentralisation: to make services more responsive; to make social services more effective. Today, devolution and decentralisation are at the heart of the Government’s programme of investment and reform in public services.

But devolution does not start in the corridors of Whitehall and end at the doors of the Town Hall.

True devolution sees power flow from central government, through regional government and into local government and then out into communities and neighbourhoods. True decentralisation empowers the individual at the expense of the institution.

And social services are nothing if they are not about empowering the powerless: giving older people the power to stay in their own home; giving young people in care the chance of a stable family life; protecting the most vulnerable children from abuse and neglect; promoting independence and self-reliance; bringing hope to families where hope has almost gone.

Our task – together – is to reform social services so they are better able to empower the individual; better resourced to support the vulnerable; better structured in the interests of the user.

Having had the courage to invest in social services. Now is the time to make these big reforms. I look forward to working with the LGA, ADSS, private sector, voluntary sector and councils in making these changes happen.

Below is the text of the speech made by Alan Milburn, the then Secretary of State to Health, on 17 September 2002.

It is a pleasure to be here tonight at this first 1st Annual Dinner of the PPP Forum. To have gained sponsorship from over 40 major organisations that play a leading role within the PPP industry in such a short period of time is a considerable achievement and a welcome development.

The reason I wanted to attend this evening was to emphasise the importance and priority the Government attaches to the relationship between the public and private sectors, and the pivotal role these partnerships are playing in improving our vital public services.

Indeed I believe the time is right to further develop the relationship between the public and private sectors in health care – both through the Private Finance Initiative’s central role in modernising the infrastructure of the NHS and through a broader relationship between public and private in the direct provision of services to NHS patients.

Let me start with PFI. PFI is a partnership that works. It is delivering results for patients and good value for money for taxpayers. PFI is here – and here to stay.

Thanks to the involvement of the private sector, we are now in the middle of the biggest hospital building programme in the history of the NHS. Of course after decades when the NHS was starved of the capital it needs, the Exchequer is today providing huge increases in resources for buildings and equipment.

But set against the scale of the challenge – with one third of NHS hospitals older than the NHS itself – Exchequer funding alone cannot deliver the investment that is needed. The role of the private sector, through the PFI is vital, as an addition, not as an alternative to mainstream public sector capital funding, in securing the modernisation of the health service. It is allowing more new NHS buildings to be built more quickly.

Our ten year NHS Plan promised over 100 new hospital schemes between 2000 and 2010. 68 major hospital development projects worth over £7.6 billion have already been given the go-ahead. 64 of these projects involve private finance.

A dozen new PFI hospitals are now open with a further dozen under construction. Indeed tomorrow I will officially open the new Worcestershire Royal Hospital, part of the new generation of PFI built NHS hospitals.

PFI is also successfully delivering a range of medium sized community and mental health facilities, as well as smaller scale specialist projects such as heat and power plants, staff residences and IT systems. All areas incidentally where we are looking to expand and develop new investment opportunities.

Almost 100 smaller schemes – each worth up to £25 million – have now reached financial close bringing extra investment into the NHS of over £650 million.

In primary care NHS LIFT is levering in initial investment of £300 million in those parts of the country where provision is poorest and need is greatest.

PFI has proved itself in practice to be an effective way to deliver high quality, patient-focussed services out of modern, purpose designed buildings. PFI has delivered on time and within budget – something that public sector led investment projects haven’t always managed to achieve. And of course the public gains with a legal guarantee that each of these new hospitals must be maintained as new throughout the lifetime of the PFI contract.

Because PFI is delivering the goods and is supporting innovation and new solutions to delivering public services, it is little wonder that countries in Europe and across all continents have started to think about and use PFI, looking to the UK for advice and experience. The success story in the UK is something we should trumpet to the world.

Developing these partnerships has not always been easy of course. And I want to thank the PPP Forum and many of the individual organisations here tonight for working closely with us to bring about many of the improvements to the PFI.

PFI remains controversial. But I believe much of the criticism is just plain wrong.

Initially the criticism was that PFI contracts were “mortgaging the future”; that there were years of paying out for no final return. We ended that objection by ensuring that at the end of the PFI contract, the NHS can own the hospital if that is in the best interests of the local health service and it’s what the hospital wants.

Then, the criticism was that PFI inevitably meant fewer hospital beds. It is true that in the initial rounds of PFI there were fewer beds in the new hospitals than in the old ones they were replacing, but this would have been true whether private or public capital had been used to build these hospitals. Bed losses were not caused by PFI any more than Railtrack’s problems were caused by the wrong leaves on the line.

What led to fewer beds in new hospitals was the prevailing culture in the NHS at the time that more beds were not needed or were somehow bad. A culture that over a period of 18 years or so led to the loss of tens of thousands of beds, long before PFI ever arrived on the scene.

Today – precisely because this Government have ended decades of bed reduction as part of our programme to expand NHS capacity – new hospitals, whether PFI or not, do not get the go-ahead with fewer beds. Today the number of hospital beds is rising not falling. The tranche of 19 major schemes which will go out to market this year will increase NHS bed numbers by 1700 over existing provision.

Then some argued that if PFI wasn’t bad for NHS beds it was certainly bad for NHS staff. We made a commitment in our manifesto that PFI should not be delivered at the expense of the pay and conditions of staff employed in these schemes. The Retention Of Employment scheme provides just the protection that unions representing cooks, porters, cleaners, security and laundry staff have been calling for. And I can confirm tonight that the first scheme incorporating RoE at the Walsgrave Hospital, will reach financial close next month and that all future PFI schemes where soft FM services are included will have to incorporate this new approach.

Next the argument went that the taxpayer was getting a rotten deal. But the National Audit Office in examining PFI schemes has found they will all deliver value for money. And vfm continues to improve. The legal framework and payment mechanism has become standardised. You understand the risks in PFI better. This has been reflected in the improvement in lending terms over the past few years. The better and tighter pricing of risks. When you look at it in the round, PFI is simply a better means of procurement. The NHS no longer has to rely on stop-start funding with each spending round. We can plan for the future. We can plan and invest, rather than as we used to, simply patch and make do.

On all of these counts the sometimes fierce criticism that the PFI has been subjected to has proved seriously wide of the mark. Nonetheless it is all our responsibility – private sector no less than public sector – to explain clearly the benefits of the relationship and the value it can add to improving public services – and to do so energetically and forcefully. When some newspapers, and others, criticise your work, as second rate and a shoddy product, the industry alongside Government surely has a responsibility to defend its work and reputation. Indeed, I understand that, through the PPP Forum, you have plans to market PFI more aggressively.

At the same time we will continue to reform how PFI works not least by standardising the process and bundling smaller schemes into larger deals where we can extract better value for money. We will also take the PPP approach into the provision of pathology, diagnostic and IT services.

And it shouldn’t stop there. I believe this partnership between the public and private sector is more than just about providing bricks and mortar.

Just as we have harnessed private investment through the PFI to modernise NHS buildings, we now look to harness new forms of private sector investment to modernise NHS services. With the NHS still facing major capacity constraints, increasing numbers of NHS patients are already being treated in UK private hospitals as part of the wider effort to get waiting times down for treatment. New partnerships between the public and private sectors are being developed to provide stand-alone surgery hospitals in a new generation of Diagnostic and Treatment Centres. The first DTCs are already open and I expect the first privately-run NHS DTC to be operating by the end of this year. We are also working to bring new providers from overseas into this country in order to further expand services for NHS patients.

Like NHS use of existing private sector providers, this is not a temporary measure. These new providers will become a permanent feature of the new NHS landscape. They will provide NHS services to NHS patients according to NHS principles. And in the process more diversity in provision will open up more choices for NHS patients.

These reforms are about redefining what we mean by the National Health Service. Changing it from a monolithic centrally run monopoly provider to a system where different health care providers – public, private, voluntary and not-for-profit – work to a common ethos, common standards and a common system of inspection. In such a 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.

It is also a fundamental change. Not in how the NHS is funded or the values on which it is founded, but in how it is organised. NHS healthcare no longer always needs to always be delivered exclusively by line managed NHS organisations.

As the NHS Plan indicated a complex organisation, employing over a million people cannot simply be run from Whitehall. For patient choice to thrive it needs a quite different environment. One in which there is greater plurality in local services with the freedom to innovate and respond to patient needs.

You see the Budget on April 17th marked a watershed for the NHS and not just in the scale of the resources or the length of time for which they have been committed. Yes, it is true that against any historic benchmark they are generous with five years of real terms growth averaging 7.5% taking health spending in our country beyond the EU average.

But when we put taxes up to get 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. Not just improvements in services for patients but services which are increasingly shaped by the informed choices of patients. Not the old style take it or leave it NHS of the last century but an NHS that is tune with the needs of this century – where services are responsive, where patients have choices, where quality always comes first. This is the challenge we now face.

It is an explicit objective of our reforms therefore to encourage greater diversity in provision and more choice for patients particularly for elective surgery. Hence primary care trusts having the explicit freedom to purchase care from the most appropriate provider – whether public, private or voluntary. From next April we will begin to move to a system of payment by results for NHS hospitals. Resources will follow the choices patients make so that hospitals who do more get more; those who do not, will not. For the first time in the NHS patients will be able to choose hospitals rather than hospitals choosing patients.

Local health services will be independently rated for their performance. There will be more information for patients. Hospitals that are doing less well get more help, those that are doing best will get more freedom. Where there are persistent problems we will step in. Where there is progress we will step back. At one end of the spectrum new management teams – whether from the public, voluntary or private sectors – will be brought in through the franchising process to turn round NHS organisations that are in trouble. At the other the best performers will become NHS Foundation Trusts legally free from Whitehall direction and control. And let me make it quite clear, as we develop our proposals for NHS Foundation Hospitals we will ensure that any change of status for an NHS Trust does not adversely affect the delivery or sponsors of a PFI project which may be associated with it.

The scale of the investment we put in must be matched by the courage to radically reform the NHS. The NHS has great strengths in how it is organised. Its ethos and its staff express the values of our nation. Its primary care services, led by Britain’s family doctors, are the envy of many other countries. However, in addition to its long standing capacity problems, the NHS has great structural weaknesses too – not least its top down, centralised system that tends to inhibit local innovation and its monolithic structure that denies patients choice.

These weaknesses are a product of the health service’s history. They need now firmly to be consigned to its history.

At the time the NHS was being formed as a nationalised industry in the UK elsewhere in Europe many socialist or social democrat governments were creating institutions which favoured greater community ownership over state ownership. Whereas in the UK’s health care system there is uniformity of ownership, in many other European countries there are many not-for profit, voluntary, church or charity-run hospitals all providing care to the public health care system. There are private sector organisations doing the same. As other European nations testify, there is no automatic correlation that tax-funded health care has to mean health care supply run purely by central government. Tax funded health care can sit side by side with decentralisation, diversity and choice.

We can build a broader spectrum of public service providers in our country, across the public and private sectors it is true but including existing and new models of voluntary, and not-for-profit organisations. We should not constrain our reforms to what exists already but look to more radical approaches to public service reform. At the heart of these reforms must be a commitment to form effective partnerships for the benefit of the patients, pupils and public who rely on public services.

Your forum is an important element in strengthening the partnership approach in our country. We share your commitment to widening and deepening these partnerships. I applaud your efforts here tonight and I look forward to working with you as we reform, invest and enhance our public services.

Below is the text of the speech made by Alan Milburn, the then Secretary of State for Health, on 2 July 2002.

It is a pleasure to be here today with you at your Conference. This event -now one of the largest HR conferences in Europe – has quite rightly become one of the major events in the NHS calendar. It’s especially heartening to see so many board members, managers and staff side representatives here today.

We meet during a week when we will celebrate the 54th anniversary of the founding of the NHS. When in all parts of the country the NHS celebrates its achievements by opening its doors to the people it serves. And I want to place on record today my thanks to the staff of the NHS – not just the doctors and the nurses – but all the staff. The porters, the cooks, the cleaners, the scientists, the therapists, the secretaries, the managers. All of the professions who, day-in, day-out, give their all in the service of others. They represent the very best of British public service and I believe that it is time we as a nation stood up and said that we are proud of the work you do.

For me – and for millions in our country – the NHS represents the best of Britain. Its values – of fairness, community, a belief that we really do achieve more together than we ever can alone – make the NHS more relevant than it has ever been. We live in an era where health care can do more – but costs more – than ever before. In this modern world, treatment that is free based on need not ability to pay, makes a tax-funded well-funded NHS the best way to deliver health care to all our people.

Today I want to set out how I believe we in this country can make the NHS the best insurance policy in the world. And I want to describe the challenges we now must meet if we are to realise that ambition.

It is true we face major problems in the NHS. Staff feel them and patients experience them. Old buildings, outdated equipment, staff shortages, long waits for treatment. But after decades of neglect today there is progress underway. Since the NHS Plan was published two years ago the NHS has chalked up achievements in which all parts of the service can share.

In primary care, where waiting times are coming down. Where 10 million people can get out-of-hours care through a single phone call to NHS Direct. Where the prescribing of cholesterol-lowering drugs is up. Where deaths from cancer and heart disease are down.

In mental health services, where in hundreds of communities new crisis and assertive outreach teams are in place, providing services to thousands of vulnerable patients. In older people’s services, where delayed discharges from hospitals are down, where more home-based care is in place and where free nursing care is now the norm.

In ambulance services, where today all but a handful are achieving the emergency response call time, when just two years ago only a handful were achieving that.

In hospital services, where a year ago people were having to wait up to 18 months for their hospital operation. Today, the maximum wait at 15 months is moving towards the NHS Plan guarantee of a maximum 3 month wait. The number of people experiencing long waits for an outpatient appointment is the lowest on record. And for those with the most serious clinical conditions – cancer and heart disease – waiting times are lower still.

Yes, of course, there is a long way to go. The NHS Plan is unashamedly a programme for ten years not just for two. But the NHS today is now beyond first base in delivering it. Each of these achievements has been hard won. There are many more challenges to come. Anyone who says there are no problems is wrong. But those who say there has been no progress have got it totally wrong.

While those who are implacably opposed to the NHS – in principle as well as in practice – accuse it of being a black hole, which simply absorbs public money without return, those critics should instead be pointing at dozens more hospitals, hundreds more beds, thousands more doctors, tens of thousands more nurses – and an NHS that is now on the up. They should go and see what I see in every hospital, health centre and surgery I visit. Not just the investment coming through but the reforms too – in how staff work and how services are organised.

The 10-year journey we mapped out in the NHS Plan is now firmly underway. And now we can move up a gear.

The Budget on April 17th marked in my view a watershed for the NHS. And I don’t just mean the scale of the resources or the length of time for which they have been committed. Yes, against any historic benchmark they are generous. Five years of real terms growth averaging 7.5% will take health spending in our country beyond the EU average – an average which the cynics said we couldn’t even get near. It is worth remembering that just six years ago spending on the NHS was falling in real terms. By 2008 it will have doubled in real terms.

What is more, social services – for too long the poor relation – are to enjoy big rises in investment too. Six years ago spending on social services was falling. Today it is rising by over 3% in real terms. From next April it will double to 6% a year over and above inflation for the next three years.

The Budget laid to rest a decades old fallacy – that we in Britain could have world class health care on the cheap. We can’t.

As the reaction to the Budget has shown, there is overwhelming public support for the extra investment. But there is considerable public scepticism about the ability of the NHS to turn those resources into results for patients. You only have to read some of our newspapers to hear the voices of scepticism. Sometimes it is not just scepticism about the NHS. It is downright hostility. Some in politics and in business say the NHS, precisely because it is run on public service principles, can never actually deliver the goods for patients.

I know those doubters are wrong. Our job is to prove them wrong. And we can only do that by working together. Staff and managers, trades unions and employers. Our job is to use the extra investment to reform the NHS so that it can deliver faster treatment, higher standards and a better experience for patients.

You see when we put taxes up to get more resources for the NHS – as people in the NHS urged us to do – we entered into a new contract with the people of our country. In exchange for extra resources we have to deliver better results. Not just improvements in services for patients, but services which are increasingly shaped by the informed choices of patients. Not the old style “take it or leave it” NHS of the last century, but an NHS that is in tune with the needs of this century – where services are responsive, where patients have choices, where quality always comes first. This is the challenge together we must now meet. I believe we can only meet it by a combination of sustained investment and far-reaching reform.

In the first place, if the NHS is to deliver for patients it has to remain focussed on what counts for patients. And the extra resources must be properly focussed too. The NHS does many things. There will be many pressures from many quarters for many good causes. But none of us will be forgiven if, having raised the resources, we fail to use them to get the results that both staff and patients want to see. Shorter waiting times. Higher clinical standards. Better health outcomes.

The public’s priorities have to be the health service’s priorities. Getting waiting times down in every aspect of NHS care from ambulances to x-rays, from primary care to secondary care. Providing quick, high-quality emergency services, not least in A&E. Making sure that the fundamentals are right – clean wards and safe care. Improving cancer, cardiac, mental health and elderly services.

These are the priorities. In time it is true we will develop further NSFs, but only at a pace the NHS can properly absorb. And to help local health services focus on these priorities, we will not only cut the number of plans that have to be submitted to the centre but, for the first time later this year, give local services three year’s worth of funding so that there is financial certainty for the medium term rather than the short term.

Stability over resources will allow the NHS to implement a sustained programme of expansion. It is time to go for growth. To use the large scale increases in both revenue and capital funding to expand capacity. To shift the balance of services so that more patients can be seen in primary, community and social services, not just in hospitals.

Each of the 28 new Strategic Health Authorities are now finishing their capacity plans. These plans will address how shortages – whether of buildings, equipment or staff – in each part of the country can be plugged. The biggest capacity constraint the NHS faces of course is the shortage of trained staff. That can place existing staff under huge strain. The new Workforce Development Confederations – working with the StHAs – have a key role to play in getting the extra staff the NHS needs into post.

And here too there are good foundations on which to build. The cuts in nurse and GP training places that took place in the 1990s have both been turned into growth. Training places for physiotherapists are up by almost two thirds. The number of applicants for nurse training has more than doubled since 1997. The fall in applicants for medical school places has been reversed. The largest ever increase in medical school places has already delivered 25% more medical students. The NHS Plan target to get an extra 20,000 nurses working in the NHS by 2004 has been hit two years ahead of schedule. Since 1997 the number of nurses working in the NHS has increased by over 30,000, the number of scientists and therapists by almost 14,000 and the number of doctors by 9,500. But there is more to do if we are to realise our latest plans for an extra 15,000 consultants and GPs, 35,000 more nurses, midwives and health visitors and 30,000 therapists and scientists on top of what has already been achieved.

Today I can report on two changes that will help NHS employers not just with recruitment but with retention too.

First, pay for staff. NHS staff deserve fair pay. There is no argument about that. But what I am not prepared to do is to see the large increases in funding for the NHS all go on extra pay. There has to be responsibility in public sector pay, including in the NHS. So I am prepared to invest more, but only in exchange for getting more. That is what lies at the heart of the new consultants contract we have agreed with the BMA. It is a something for something deal. Where consultants can earn more, but only if they do more for NHS patients. And it will be for NHS employers to make sure that is what the contract delivers.

A similar approach applies to the proposed new contract for GPs – the more they do the more they can get. Throughout the NHS better pay must be earned, through improved performance, greater productivity, more flexibility. That is the deal that is on offer through the Agenda for Change negotiations on a new pay system for staff other than doctors. These negotiations have been long and hard. I can confirm today, however, that we have started the final phase of the negotiations. I hope, after consultation, we can start implementing the new system – and a longer term pay deal alongside it – by the start of the next financial year.

Today my department is writing to all NHS Trusts seeking expressions of interest in joining this initial implementation phase. Agenda for Change holds out the prospect of better pay for NHS workers, in exchange for an end to old-fashioned working practices. It will mean an NHS where staff are paid according to the work they do not the job title they hold. So that the senior nurse who takes on more responsibility gets more pay. So that the clerical officer who provides support for a large clinical team gets paid more than the administrator who is in charge of more routine work. We need a system which makes sure people are paid for what they do and encourages them to progress. So that there is a positive incentive to encourage the ambulance technician to become a full paramedic and, in turn, for the paramedic to gain advanced skills so that they can deliver more frontline clinical care to patients.

Agenda for Change is all about transforming and modernising working practices in the NHS. If we can get it right, it will help bring to an end the remaining outdated professional demarcations that stand in the way of patients getting the faster, high quality care they need.

Pay reform alone, however, will not deliver the extra staff the NHS needs. Improvements in care for patients can only happen if there are improvements in the care we give to staff. I have never agreed with those who say that we have to choose between investing in staff or investing in services. In the NHS they are one and the same.

The HR in the NHS Plan, which Andrew Foster launched yesterday at this conference, makes the case for the health service becoming a model employer. The NHS won’t get better treatment for patients unless it offers better treatment for staff. The NHS is already Britain’s largest employer. Our aim should be to make it the best.

In a world where patients rightly want flexibility – over when they are treated – and where staff need flexibility – to balance their family and their working lives – NHS employers need to respond. That is why we put in place the Improving Working Lives programme, so that every part of the NHS offers staff flexi-time, annual hours, flexible retirement or career breaks. Some employers are already doing precisely that – and reaping the benefits through more staff and better staff morale. By next Spring I will be looking to every NHS employer to deliver these changes.

Help with childcare is crucial too. Our manifesto commits us to invest an extra £100 million – from the savings made by abolishing the old health authorities and NHS regional offices – in improved childcare for staff. A start has been made. By this time next year the NHS will have funded double the number the number of workplace nurseries than it did just last year. Staff I have met – whether at the Freeman Hospital in Newcastle or at the Lewisham Hospital in London – have all stressed how important these nurseries are for them in what are inevitably busy lives.

On-site nurseries, while good for some staff, however, are not right for all. I can announce today then a further £6 million to make other forms of childcare – such as after school clubs and holiday playschemes – available to NHS staff. All staff – including our country’s family doctors and their staff – will be eligible for help.

These changes – a new pay system and more support for staff – will help deliver the increases in professionals the NHS needs. By necessity this is a programme for the medium term. It takes 3 years to train a radiographer, and many more to train a consultant. The last few years have seen more staff of course – and there are more to come – but there are still staff shortages. This is particularly the case with doctors in certain key specialities. That is why, over recent months, we have embarked on a major drive to recruit trained medical staff to the NHS from abroad.

Today I can report on progress. Since the global recruitment campaign began we have identified around 500 doctors who are suitable for employment in the NHS. To date around 100 have been matched with NHS Trusts who are interested in employing them. In addition, Sir Magdi Yacoub is heading our efforts to bring highly qualified doctors to this country through a specially devised NHS International Fellowship Scheme. Doctors who come to this country will work in the NHS on Fellowships for up to 2 years. We are initially concentrating on recruiting them to four key shortage specialities – cardiothoracic surgery, histopathology, radiology and psychiatry.

We had expected to recruit 50 fellows in the first phase. In fact, thanks to the help of the medical royal colleges and others, I expect double this number to be short-listed. And I expect the majority of short-listed International Fellows to be in place by the end of 2002.

Last week, I also met with private health care providers from France, Germany and Sweden who are interested in bringing into this country their own clinical teams in order to further expand elective services for NHS patients. We are now in active discussions with several of them. A key stipulation for us is that they bring their own suitably qualified medical staff with them, rather than seeking to take existing NHS doctors out of NHS hospitals.

Some, both from within the NHS and from existing private sector providers, have expressed concern about this plan. Similarly, some have pointed to concerns and even resistance to our proposal to recruit individual overseas doctors into NHS hospitals. I find this surprising. Everyone knows the NHS need more doctors. It is doctors, above all others in this country, who have quite reasonably argued that case. Of course standards – including language skills – have to be right. But what we cannot have – and what I will not accept – is anyone having a right of veto on NHS patients getting the extra doctors they need. There can be no question of restrictive practices, wherever they are found, standing in the way of an expansion in services for NHS patients. I will be looking to NHS employers to always put the needs of NHS patients ahead of any other consideration.

Let me just make this general point: reform is not an optional extra in the NHS. It is as vital as the investment. It is central to the renewal of the health service. To be clear : when it comes to NHS reform our foot will be on the accelerator not, as some argue, on the brake.

So I am planning for the first of a growing number of these new overseas providers to be in place later this year. They will concentrate on elective surgery in hard-pressed specialties in those parts of the country where capacity constraints are greatest. Like NHS use of existing private sector providers, this is not a temporary measure. These new providers will become a permanent feature of the new NHS landscape. They will provide NHS services to NHS patients according to NHS principles. And, in the process, they will open up more choices for patients and more diversity in provision.

All of this is about expanding the services that are available to NHS patients so they can get faster treatment and higher standards. These reforms are also redefining what we mean by the National Health Service. Changing it from a monolithic, centrally-run monopoly provider to a system where different health care providers – public, private, voluntary and not-for-profit – work to a common ethos, common standards and a common system of inspection. In such a system, wherever NHS patients are treated they remain NHS patients because they get care according to NHS principles – treatment that is free, based on need, not ability to pay. This is the modern definition of the NHS.

This new diversity in NHS provision, coupled with sustained expansion in capacity, provides the basis for patients to exercise more choices about their care. As capacity expands so choice can grow. From next April we will begin to move to a system of payment by results for NHS hospitals. For elective services resources will follow the choices patients make so that hospitals that do more, get more; those who do not, will not. Over the next four years, an increasing proportion of each hospital’s income will come to it as a result of the choices patients make. For the first time in the NHS, patients will be able to choose hospitals rather than hospitals choosing patients so marking an irreversible shift from the 1940s take it or leave it, top down service.

That process started this week with patients waiting more than 6 months for a heart operation being offered a choice of a faster waiting time in another hospital which has the capacity to treat them – whether it is public or private, on the doorstep or further afield, in this country or abroad. This week sees the first small but significant step towards our 2005 ambition of a service where all patients needing a hospital operation can choose not just the location of their treatment but when to be treated and by whom.

Of course, different approaches will be needed to bring about improvements say, in emergency care or mental health services. But overall this is the most fundamental change the NHS will have ever faced. Not in how it is funded or the values on which it is founded, but in how it is organised. Patients will be in the driving seat – and not before time.

NHS healthcare no longer always needs to be delivered exclusively by line-managed NHS organisations. The task of managing the NHS becomes one of overseeing a system, not running an organisation. Responsibility for day-to-day management can be devolved to local services. None of this means the abandonment of national standards. Far from it. It is precisely because over these last five years we have put in place such a rigorous framework of standards nationally, that the centre of gravity can now shift to how improvements can be delivered locally.

So while some advocate a false choice between national standards and local autonomy, the truth is that securing improvements in performance requires both.

Later this month local health services will receive a star rating for their performance. Those who are doing less well will get more help. Those that are doing best will get more freedom. Where there are persistent problems we will step in. Where there is progress we will step back. At one end of the spectrum new management teams – whether from the public, voluntary or private sectors – will be brought in through the franchising process to turn round NHS organisations that are in trouble. At the other, the best performers will be able to become NHS Foundation Trusts, legally free from Whitehall direction and control. Three-star trusts will have less monitoring and greater freedom.

The more overall performance improves – as I am confident it will – the more autonomy will be earned across the NHS. That is what I want to see happen. We are at the start of a transition where more and more decisions about the NHS are taken locally rather than centrally.

The reason for this is simple enough. In the end I don’t treat patients. You do. Whitehall doesn’t provide care. That is what hospitals, health centres and surgeries do. And that is where power needs to be located. On the frontline. Our core objective is to shift the centre of gravity in the NHS. It is right that standards are set nationally, but it is wrong to try to run the NHS nationally. This is something which the new strategic health authorities in their relationships with Primary Care Trusts will need to fully understand: the PCTs need to be helped and enabled, not commanded or controlled. In turn, they need to devolve resources to their constituent practices from the growing proportion of the NHS budget the PCTs will control. From 2004, three-quarters of the NHS budget will be controlled by PCTs.

It is time to unleash the spirit of public service enterprise that I know exists in so many parts of the NHS. The simple truth is the NHS works best when it harnesses the commitment and know-how of staff to improve care for patients. That’s why we are putting ward sisters in charge of ward budgets and giving health visitors a greater say over community health budgets. It’s why matrons are being given the power to get the fundamentals of care – like clean wards and good food – right for patients. It’s why nurses are being given new powers to prescribe drugs and discharge patients.

And crucially doctors – with all their skills and knowledge – need to be empowered too. Too many doctors for too long have felt disempowered. Through PCTs there is now a major opportunity for doctors in primary care to shape local services to suit local circumstances. Devolution of budgets to practices will aid that process of clinical engagement. In secondary care there is more to do. Here a new effort to engage doctors in the process of change is needed. Just as PCTs need to devolve responsibility to their front-line staff, so do Trusts. Resources and responsibility need to be placed on the front line. That will become an absolute imperative as patients get greater choice and their choices are backed by resources. Clinical teams need to have the resources and authority to make their services more responsive to patients. And as staff at the James Cook University Hospital on Teesside were arguing with me yesterday, when clinical teams do well, staff need to be rewarded too.

The people at this conference today are the key to delivering these changes. Senior managers in the NHS – working with the NHS trade unions – have a real responsibility to ensure that staff at all levels are involved in the process of change and, crucially, that clinical teams are engaged and empowered.

When they are – as in the collaborative programmes already begun in cancer, coronary and primary care – the results are staggering. More than 90% of practices involved in the primary care collaborative for example are able to guarantee patients an appointment to see a GP within 48 hours. But staff involvement should not have to be left to special programmes in some parts of the NHS. It should be the norm in every part of the health service. Whether it is the doctor or the porter, the engineer or the cleaner, every member of staff in the NHS should be involved in helping make change happen.

In a world where knowledge is king, other industries have long since learned that the successful organisation is one that consistently develops its staff and harnesses their potential. It is a lesson that the NHS has been too slow to learn. But through the NHS University, NHS Learning Accounts, the NHS Modernisation Agency and the Leadership Centre we can now put that right.

Last year, for example, almost 20,000 NHS staff who are currently without a qualification were able to access either an NHS Learning Account or NVQ training or assessment. This year the £60m that has been allocated direct to Workforce Development Confederations will allow a further 90,000 staff to benefit. And when staff benefit, patients benefit too – through people delivering services who are better trained and better able to fulfil their potential.

There is no more important management function in today’s NHS than getting the best from all its staff.

In the end, the NHS is the people who work for it. I want to see an NHS that is true to its principles but reformed in its practices. Where patient choice drives change. And where front-line staff are empowered to make those changes happen.

The Budget this year represents an enormous vote of confidence in all of you, in the whole of the health service.

Some have said that the Budget is a gamble. In some people’s minds it may be. But not in mine. I wouldn’t have fought so hard for the resources we’ve now got if I thought there was a better way of providing health care for our country. For me there is no better way than through the NHS.

And with your help, I know that the best days of the NHS lie in the future, not in the past.

Below is the text of the speech made by Alan Milburn, the then Secretary of State for Health, to the British Association of Medical Managers on 12 June 2002.

It is a pleasure to be here today with you at your Conference. BAMM has been at, the forefront of improvement and innovation within the NHS for many years. The people at this conference today are leading change in all aspects of care and I want to place on record my thanks to you and particularly to BAMM and Jenny Simpson for the leadership you are giving.

I want today to set out the challenges facing the health service. And how I believe that with your drive and support the NHS can rise to meet them.

We are a long way from realising the ambition all of us share for a service which genuinely offers patients the choice of quick high quality care which always puts their needs first. But we are making good progress towards it. Since the NHS Plan was published two years ago the NHS has chalked up achievements in which all parts of the service can share.

In primary care, where waiting times are coming down. Where 10 million people can get out-of-hours care through a single phone call to NHS Direct. Where the prescribing of cholesterol-lowering drugs is up by one third.

In mental health services, where in hundreds of communities new crisis and assertive outreach teams are in place providing services to thousands of vulnerable patients. In older people’s services, where delayed discharges from hospitals are down, where more home-based care is in place and where free nursing care is now the norm.

In ambulance services, where today all but a handful are achieving the emergency response call time, when just two years ago only a handful were achieving that.

In hospital services, where a year ago people were having to wait up to 18 months for their hospital operation. Today the maximum wait at 15 months is moving towards the NHS Plan guarantee of a maximum 3 month wait. The number of people experiencing long waits for an outpatient appointment is the lowest on record. And for those with the most serious clinical conditions – cancer and heart disease – waiting times are lower still.

Yes, of course, there is a long way to go. But the NHS is now beyond first base in delivering the NHS Plan. Each of these achievements has been hard won. There are many more challenges to come. Anyone who says there are no problems has clearly got it wrong. But those who say there has been no progress have got it totally wrong.

While they accuse the NHS of being a black hole which simply absorbs public money without return, these critics should instead be pointing at dozens more hospitals, hundreds more beds, thousands more doctors, tens of thousands more nurses – and an NHS that is now on the up. They should go and see what I see in every hospital, health centre and surgery I visit. Not just the investment coming through but the reforms too – in how staff work and how services are organised.

And nowhere is reform more necessary than in the way we employ our staff in the NHS.

More than 50 years ago in order to establish the National Health Service my predecessor Nye Bevan concluded a contractual agreement with the BMA for the employment of hospital consultants. Today our 26,000 NHS consultants are working within a contract which has largely gone unchanged since 1948.

Most consultants work very hard for the NHS and with tremendous commitment to the principles of the NHS. I acknowledge many of them are working above and beyond their strict contractual obligations to the health service. That is a measure of their commitment which has not always been rewarded in their contracts.

The way consultants have been managed under their existing contract has been far from satisfactory. Too few consultants have proper job plans setting out their key objectives, task and responsibilities and when they are expected to carry out their duties. Even fewer have their performance regularly reviewed. And the issue of consultants’ private practice has remained a legacy of Bevan’s 1948 settlement.

In the NHS Plan, I committed the Government to a new consultant contract to recognise and reward those who do most for the NHS.

I am pleased to be able to tell the Conference that we have today reached agreement with the BMA on a new framework for the NHS consultant contract.

We are jointly proposing with the BMA that the new contract be accompanied by a 10% three year pay deal that we will also be offering to other staff in the NHS alongside reforms to their pay systems.

The new contract is good news for NHS patients and for NHS consultants. It is a something for a something deal. It offers more pay for NHS consultants so that more NHS patients benefit from more of their precious time and skills. Crucially, it recognises and rewards those NHS consultants who do most for the NHS.

It offers consultants a higher starting salary and increases in earnings over the lifetime of their work for the NHS. There will be extra pay for those with the heaviest on-call duties.

Unlike the existing contract, however, where there are automatic increases in salary, in future consultants extra earnings will be dependent for the first time on performance against agreed job plans. The job plan will set out how consultants time should be best used for the benefit of NHS patients. It will secure more face to face sessions with patients with an increase in the time consultants spend on direct clinical care. The current system of fixed and flexible sessions will go to be replaced with a new system in which NHS work is timetabled and typically carried out on site with no non-NHS work permitted during this time. The old NHS working week of 9-5 will also go. Instead NHS employers will be able to schedule consultants work and pay for it at standard NHS rates between the hours of 8am to 10pm Monday to Friday and 9am to 1pm at weekends. This new system of flexible working will be good for both consultants and for patients. As we expand consultant numbers it will make for more efficient and productive use of NHS facilities – such as operating theatres – that could otherwise lie idle. And because NHS employers will be able to buy extra consultant time within these NHS hours at NHS pay rates it will avoid some of the more inflated rates we have sometimes seen over recent years.

The new contract also deals once and for all with the vexed issue of private practice. It removes a long running sore which dates all the way back to 1948. The relationship between private practice and NHS work for consultants has for too long been clouded by lack of clarity, lack of accountability and an inevitable – often unfair – perception that some consultants do not always give full commitment and priority to the NHS and to their NHS patients. The new contract will herald an entirely fresh approach, designed to prevent any perceived or actual conflict of interest, based on one overriding principle: that an NHS consultant’s first and foremost commitment is to the NHS and to their NHS patients.

For the first time it will be explicitly part of the consultants contract of employment that NHS patients come first and the NHS always has first call on consultants time. It does this first of all, by giving exclusive use to the NHS of up to 48 hours of a newly qualified consultants time each week – the maximum the NHS could demand under the Working Time Directive. Under the new contract this exclusive use of newly qualified consultants time will apply for the first seven years of their careers, as we proposed in the NHS Plan. Secondly, the new contract goes further than the NHS Plan because any consultant wanting to undertake work on privately paying patients after seven years of NHS service will need to give the NHS an extra session of four hours a week at normal NHS pay rates. Thirdly, new rules on private practice will set out how NHS commitments must always take precedence over private work with adherence to these new rules enforceable as part of the new contract. Access to higher salary levels will depend on consultants meeting these new standards and, of course, the objectives in the consultant’s job plan being met.

These are fundamental and far reaching changes to how NHS consultants are employed, rewarded and managed. NHS consultants will get more – but only if NHS patients get more. The old contract was a throwback to the world of 1948. The new contract will reform traditional working practices to deliver modern, flexible services to more NHS patients.

So the 10-year journey we mapped out in the NHS Plan is now firmly underway. And now we are moving up a gear.

The Budget on April 17th marked a watershed for the NHS. And I don’t just mean the scale of the resources or the length of time for which they have been committed. Yes, against any historic benchmark they are generous. Five years of real terms growth averaging 7.5% will take health spending in our country beyond the EU average – an average which the cynics said we couldn’t even meet. It is worth remembering that just six years ago spending on the NHS was falling in real terms. By 2008 it will have doubled in real terms.

What is more, social services – for too long the poor relation – are to enjoy big rises in investment as well. Six years ago spending on social services was falling. Today it is rising by over 3% in real terms. We know that more is needed. We have listened to what local government, private sector care homes and local health services have all had to say. So now, spending on social services will double to 6% a year over and above inflation for the next three years.

The Budget laid to rest a decade’s old fallacy – that we in Britain could have world class health care on the cheap. We can’t. The evidence is there for all to see. The run down buildings. The outdated equipment. The failure to invest in modern IT. The shortages of trained staff. The long waits that we inflict on patients.

We are bringing the decades of NHS neglect to an end. With the economy on a stable footing we can now put the NHS on a sustainable footing for the long term. As the reaction to the Budget has shown, there is overwhelming public support for the extra investment. But there is considerable public scepticism about the ability of the NHS to turn those resources into results for patients. A failure to deliver improvements will prompt only one response: not more money in the future for the NHS, but less. Not collective provision of health care, but more individual provision. Not the public sticking with the NHS but the public walking away.

You only have to read some of our newspapers to hear the voices of scepticism. Sometimes it is not just scepticism about the NHS. It is downright hostility. You can hear other voices too. Some in politics or in business who say the NHS, precisely because it is run on public service principles, can never actually deliver the goods for patients.

We have to prove those doubters wrong. And we have to do it together.

When we put taxes up to get more resources for the NHS – as people in the NHS urged us to do – we entered into a new contract with the people of our country. In exchange for extra resources we will deliver better results. Not just improvements in services for patients, but services which are increasingly shaped by the informed choices of patients. Not the old style take it or leave it NHS of the last century, but an NHS that is tune with the needs of this century – where services are responsive, where patients have choices, where quality always comes first. This is the challenge together we must now meet.

We can only meet it by a combination of sustained investment and far-reaching reform.

In the first place, if the NHS is to deliver for patients it has to remain focussed on what counts for patients. And the extra resources must be properly focussed too. The NHS does many things. There will be many pressures from many quarters for many good causes. But none of us will be forgiven if having raised the resources we fail to use them to get the results that both staff and patients want to see. Shorter waiting times. Higher clinical standards. Better health outcomes.

The public’s priorities have to be the health service’s priorities. Getting waiting times down in every aspect of NHS care from ambulances to diagnostics, from primary care to secondary care. Providing quick, high-quality emergency services, not least in A&E. Making sure that the fundamentals are right – clean wards and safe care. Improving cancer, cardiac, mental health and elderly services.

These are the priorities. In time it is true we will develop further NSFs, but only at a pace the NHS can properly absorb. And to help local health services focus on these priorities, we will cut the number of plans that have to be submitted to the centre and, for the first time later this year, give local services three year allocations of cash so that there is financial certainty for the medium term rather than the short term.

Stability over resources will allow the NHS to implement a sustained programme of expansion. It is time to go for growth. To use the large scale increases in both revenue and capital funding to expand capacity. To get the staff, the buildings, the equipment the NHS needs. To shift the balance of services so that more patients can be seen in primary, community and social services, not just in hospitals.

The biggest constraint the NHS faces is shortages of capacity. So in addition to sustained growth in existing NHS provision, we will bring new providers from overseas into this country in order to further expand elective services for NHS patients. They will concentrate on elective surgery in hard-pressed specialties in those parts of the country where capacity constraints are greatest. I expect to see a growing number of these new providers in place beginning later this year. Like NHS use of existing private sector providers, this is not a temporary measure. These new providers will become a permanent feature of the new NHS landscape. They will provide NHS services to NHS patients according to NHS principles. And, in the process, they will open up more choices for patients and more diversity in provision.

These reforms are about redefining what we mean by the National Health Service. Changing it from a monolithic, centrally-run monopoly provider to a system where different health care providers – public, private, voluntary and not-for-profit – work to a common ethos, common standards and a common system of inspection. In such a 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.

This new diversity in NHS provision, coupled with sustained expansion in capacity, provides the basis for patients to exercise more choices about their care. As capacity expands so choice can grow. From next April we will begin to move to a system of payment by results for NHS hospitals. Resources will follow the choices patients make so that hospitals who do more get more; those who do not, will not. Over the next four years, an increasing proportion of each hospital’s income will come to it as a result of the choices patients make. For the first time in the NHS, patients will be able to choose hospitals rather than hospitals choosing patients. That process will start this summer when patients waiting more than 6 months for a heart operation will be able to choose a faster waiting time in another hospital which has the capacity to treat them – whether it is public or private, on the doorstep or further afield, in this country or abroad. By 2005, all patients needing a hospital operation will be able to choose not just the location of their treatment but when to be treated and by whom.

Of course, different approaches will be needed to bring about improvements say, in emergency care or mental health services. But overall this is the most fundamental change the NHS will have ever faced. It will mark 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.

All of this is a fundamental change for the NHS. Not in how it is funded or the values on which it is founded, but in how it is organised. NHS healthcare no longer always needs to be delivered exclusively by line-managed NHS organisations. The task of managing the NHS becomes one of overseeing a system, not running an organisation. Responsibility for day-to-day management can be devolved to local services. None of this means the abandonment of national standards. Far from it. It is precisely because over these last five years we have put in place such a rigorous framework of standards nationally that the centre of gravity can now shift to how improvements can be delivered locally.

So while some advocate a false choice between national standards and local autonomy, the experience from elsewhere in Europe in the health sector, and from across the developed world in other economic sectors, is that securing improvements in performance requires both.

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 public services as in the private sector. I have lost count of the number of times I have been told by NHS managers and NHS clinicians alike that the NHS has got to stop bailing out the poorest performers, and instead reward the better performers in the NHS in order to provide the right incentives for innovation and improvement to take hold across the whole of the NHS. And that is precisely what we must do if we are to translate the extra resources into real results for patients.

That is the reason for star rating the performance of local health services so that those who are doing less well get more help, those that are doing best get more freedom and those that are persistently failing feel the consequences. Where there are persistent problems we will step in. Where there is progress we will step back. At one end of the spectrum new management teams – whether from the public, voluntary or private sectors – will be brought in through the franchising process to turn round NHS organisations that are in trouble. At the other, the best performers will become NHS Foundation Trusts, legally free from Whitehall direction and control. Three-star trusts will have less monitoring and greater freedom.

The more overall performance improves – as I am confident it will – the more autonomy will be earned across the NHS. That is what I want to see happen. We are at the start of a transition where more and more decisions about the NHS are taken locally rather than centrally.

It is time to unleash the spirit of public service enterprise that I know exists in so many parts of the NHS.

Some functions will still be carried out – as in any large organisation – at the centre. But rather than trying to drive improvements through top-down performance management, the transition will be towards improvements being driven through greater local autonomy in which PCT commissioning, new financial incentives and the choices that patients make become the driving force for change, with scrutiny through independent inspection. That transition will take time. It will require careful management and a new, more mature understanding about the relationship between government and the health service, where the government does less and the NHS does more.

In the end I don’t treat patients. You do. Whitehall doesn’t provide care. That is what hospitals, health centres and surgeries do. And that is where power needs to be located. On the frontline. Our core objective is to shift the centre of gravity in the NHS. It is right that standards are set nationally, but it is wrong to try to run the NHS nationally. This is something which the new strategic health authorities in their relationships with Primary Care Trusts will need to fully understand: the PCTs need to be helped and enabled, not commanded or controlled. In turn, they need to devolve resources to their constituent practices from the growing proportion of the NHS budget the PCTs will control. From next year, three-quarters of the NHS budget will be controlled by PCTs.

The simple truth is the NHS works best when it harnesses the commitment and know-how of staff to improve care for patients. That’s why we are putting ward sisters in charge of ward budgets and giving health visitors a greater say over community health budgets. It’s why matrons are being given the power to get the fundamentals of care – like clean wards and good food – right for patients. It’s why nurses are being given new powers to prescribe drugs and discharge patients.

And crucially doctors – with all their skills and knowledge – need to be empowered too. Too many doctors for too long have felt disempowered. Through PCTs there is now a major opportunity for doctors in primary care to shape local services to suit local circumstances. Devolution of budgets to practices will aid that process of clinical engagement. In secondary care there is more to do. Here a new effort to engage doctors in the process of change is needed. Just as PCTs need to devolve responsibility to their front-line staff, so do Trusts. Resources and responsibility need to be placed on the front line. That will become an absolute imperative as patients get greater choice and their choices are backed by funds. Clinical teams need to have the resources and authority to make their services more responsive to patients. And as patients choose particular clinical teams, to be rewarded too.

The people at this conference today are the key to delivering these changes. Chief Executives, Medical Directors and PEC chairs have a real responsibility to ensure that clinical teams are engaged and empowered. When they are – as in the collaborative programmes already begun in cancer, coronary and primary care – the results are staggering. More than 90% of practices involved in the primary care collaborative for example are already able to guarantee patients an appointment to see a GP within 48 hours. But staff involvement – particularly to harness the skills and expertise of doctors – should not have to be left to special programmes in some parts of the NHS. It should be the norm in every part of the health service.

That is why I warmly welcome the BAMM initiative – Fit to Lead – being launched at this conference. It is a critical piece of the jigsaw: for the first time, doctors in management and leadership roles will have the tools and the training to demonstrate their competence as medical leaders. It is why over these next two years, through the NHS Leadership Centre programmes, every medical director and over 500 other senior medical leaders in secondary care – mainly clinical directors – will have had the opportunity of attending a national leadership programme.

In a world where knowledge is king, other industries have long since learned that the successful organisation is one that consistently develops its staff and harnesses their potential. It is a lesson that the NHS has been too slow to learn. But through the NHS University – that BAMM has helped pioneer – through the NHS Modernisation Agency and the Leadership Centre we can now put that right.

In the end, the NHS is the people who work for it. I want to see an NHS that is true to its principles but reformed in its practices. Where patient choice and responsiveness to patients drive change. And where front-line staff are empowered to make those changes happen.

The Budget this year represents an enormous vote of confidence in all of you, in the whole of the health service.

Some have said that the Budget is a gamble. In some people’s minds it may be. But not in mine. I wouldn’t have fought so hard for the resources we’ve now got if I thought there was a better way of providing health care for our country. For me there is no better way than a tax funded, well funded NHS.

With your help the best days of the NHS lie in the future not in the past.

Below is the text of the speech made by Alan Milburn, the then Secretary of State for Health, to the NHS Confederation on 24 May 2002.

It’s a year since I last spoke to you. Those twelve months have been a time of great change and major challenge for the NHS and the people who work in it, lead it and manage it.

The old health authorities and regional offices have gone. The new primary care trusts are up and running and the new strategic health authorities are on their way. When these changes were first proposed some said they were too risky. It is certainly true that at a time when the NHS is focussed on delivering a major programme of improvement there were risks associated with making these changes.

But the transition has gone better than many feared. And that is thanks to you. Non-executive directors, managers, clinicians and chief executives. Without you these changes would not have been as well-managed as they have been. At a time when NHS management continues to face enormous criticism from some quarters – and even the occasional critical comment from me – I want to place on record my thanks for the job you have done. Good management is needed now more than ever in the NHS.

I also want to thank the NHS Confederation for the role you have played in taking the agenda of change forward in the NHS. First in Stephen Thornton and now in Gill Morgan you have strong advocates both for the NHS and for NHS reform. I am pleased that we are able to work so closely with you.

Last year I said at your conference that I wanted you to lead the negotiations for a new GPs contract. Those negotiations have gone well and thanks to the hard work both of yourselves and the BMA there is now the very real prospect of a new contract that is not only good for Britain’s family doctors but is good for NHS patients.

I hope we can build on what you have achieved in these negotiations. I want to move to a position where national negotiations over new contracts of employment are undertaken, not by the Department of Health, but by NHS employers acting collectively. Such a change would symbolise what I believe should be a new, more modern relationship between government and the health service – where devolution takes hold, where there is more power in the NHS and less in Whitehall. So that local health services can be more responsive to the needs and choices of patients.

I want to set out today the challenges facing the health service. And how I believe the NHS can rise to meet them. No-one should be in any doubt about the significance of the next few years for the NHS. It is make or break time. Either we prove that the NHS can change to become a service where the interests and choices of patients always come first or we reconcile ourselves to the fact that the NHS – great in principle – simply could not cut the mustard in practice in today’s world. I want to say unequivocally today that I have no doubt the NHS – with your help and leadership – will meet that challenge and can look to the future with confidence.

I say that in part because of the improvements already taking hold. I know too many of the stories in the newspapers are still focussed on what goes wrong rather than what is going right. Nobody in the NHS pretends there aren’t problems – there are – or that staff are not working under real pressure – they are. But the story the NHS should be telling in every community in the land is what it has been doing to put the problems right.

I want to pay tribute today to the staff of the NHS – not just the doctors and the nurses – but all the staff. The porters, the cooks, the cleaners, the scientists, the therapists, the secretaries, the managers and the administrators. They represent the very best of British public service and I believe that it is time we as a nation stood up and said that we are proud of the work you do.

There is good progress to report for which the NHS can justifiably be pleased. And the whole of the NHS can share in the achievements made.

In primary care, where waiting times are coming down. Where 10 million people can get out of hours care through a single phone call to NHS Direct. Where the prescribing of cholesterol-lowering drugs is up by one third. Tens of thousands of patients are receiving the latest drugs to combat cancer, heart disease, Alzheimer’s disease and arthritis. In the past year alone, death rates from cancer have fallen by 2 per cent., and from heart disease by 5 per cent.

In mental health services where in hundreds of communities new crisis and assertive outreach teams are in place providing services to thousands of vulnerable patients. In older people’s services where delayed discharges from hospitals are down, where more home based care is in place and where free nursing care is now the norm.

In ambulance services where today all but a handful are achieving the emergency response call time when just two years agor only a handful were achieving that.

In hospital services where a year ago people were having to wait up to 18 months for their hospital operation. Today the maximum wait at 15 months is moving towards the NHS Plan guarantee of a maximum 3 month wait. The number of people waiting more than 12 months for a hospital operation has fallen by one third in only one year. The number of people experiencing long waits for an out-patient appointment is the lowest on record. And for those with the most serious clinical conditions-cancer and heart disease-waiting times are lower still.

Yes, of course, there is a long way to go but the NHS is now beyond first base in delivering the NHS Plan. Each of these achievements has been hard won. There are many more challenges to come. Anyone who says there are no problems has clearly got it wrong. But those who say there has been no progress have got it totally wrong.

While they accuse the NHS of being a black hole which simply absorbs public money without return these critics should instead be pointing at dozens more hospitals, hundreds more beds, thousands more doctors, tens of thousands more nurses – and an NHS that is now on the up. They should go and see what I see in every hospital, health centre and surgery I visit. Not just the investment coming through but the reforms too – in how staff work and how services are organised.

The 10 year journey we mapped out in the NHS Plan is now firmly underway. And now we can move up a gear.

The Budget on April 17th marked a watershed for the NHS. And I don’t just mean the scale of the resources or the length of time for which they have been committed. Yes, against any historic benchmark they are generous. Five years of real terms growth averaging 7.5% will take health spending in our country beyond the EU average – an average which the cynics said we couldn’t even meet. It is worth remembering that just six years ago spending on the NHS was falling in real terms. By 2008 it will have doubled in real terms.

What is more, social services – for too long the poor relation – are to enjoy big rises in investment as well. Six years ago spending on social services was falling. Today it is rising by over 3% in real terms. We know that more is needed. We have listened to what local government, private sector care homes and local health services have all had to say. So now, spending on social services will double to 6% a year over and above inflation for the next three years.

I know there are many pressures and many demands. As we expand services after so many years of under-investment there will be growing pains along the way. But that is precisely what they are. The pains that come from growth. So no one should fall into the trap of saying that these unprecedented resources somehow bring problems when in fact they present the NHS with a huge opportunity.

The significance of what we have done should not be under-estimated by anyone in the NHS or outside. The Budget laid to rest a decades old fallacy – that we in Britain could have world class health care on the cheap. We can’t. The evidence is there for all to see. The run down buildings. The outdated equipment. The failure to invest in modern IT. The shortages of trained staff. The long waits that we inflict on patients.

We are bringing the decades of NHS neglect to an end. With the economy on a stable footing we can now put the NHS on a sustainable footing for the long term. We believe the time is now right to ask the British people to pay a bit more in tax to make the NHS a lot better for patients.

Make no mistake – when people are putting more in to the NHS they will expect to get more out. And rightly so. None of us can assume public confidence. Now more than ever we have got to earn it. As the reaction to the Budget has shown, there is overwhelming public support for the extra investment. But there is considerable public scepticism about the ability of the NHS to turn those resources into results for patients. A failure to deliver improvements will prompt only one response: not more money in the future for the NHS but less. Not collective provision of health care but more individual provision. Not the public sticking with the NHS but the public walking away.

You only have to read some of our newspapers to hear the voices of scepticism. Sometimes it is not just scepticism about the NHS. It is downright hostility. You can hear other voices too. Some in politics or in business who say the NHS precisely because it is run on public service principles can never actually deliver the goods for patients.

We have to prove those doubters wrong. And we have to do it together.

When we put taxes up to get more resources for the NHS – as people in the NHS urged us to do – we entered into a new contract with the people of our country. In exchange for extra resources we will deliver better results. Not just improvements in services for patients but services which are increasingly shaped by the informed choices of patients. Not the old style take it or leave it NHS of the last century but an NHS that is tune with the needs of this century – where services are responsive, where patients have choices, where quality always comes first. This is the challenge together we must now meet.

I believe that we are in a strong position to do so. NHS funding is secure. There is progress under way. There is a ten year NHS Plan, the cornerstone of all that we do. And there is a major programme of reform to match the programme of investment.

It is these reforms that are so crucial to the future of health care in our country. That are capable of making the NHS precisely the modern service that both patients and staff want to see.

These reforms began in our first term with the introduction of a new national framework of standards. As the Kennedy Report into the tragedy at Bristol confirmed, it was really the absence of national standards that was such a structural weakness in the NHS. Hence the NSF programme, the National Institute of Clinical Excellence, the system of clinical governance, the Modernisation Agency, the Commission for Health Improvement. All of this, designed to prevent bad practice and to spread good practice, so that patients everywhere get the care and treatment they need. Whatever doubts there might be about finer points of detail there is broad consensus that this new national architecture is right for the NHS and most importantly for NHS patients.

With this national framework in place, in this second term our core objective is to shift the centre of gravity in the NHS. As both the NHS Plan and our recent follow up command paper Delivering the NHS Plan make clear, it is right that standards are set nationally but it is wrong to try to run the NHS nationally. It is only frontline clinicians and managers in day to day contact with patients who can transform local services. This is something which the new strategic health authorities in their relationships with Primary Care Trusts will need to fully understand: the PCTs need to be helped and enabled not commanded or controlled. In turn, they need to devolve resources to their constituent practices from the growing proportion of the NHS budget the PCTs will control.

As the NHS Plan indicated a million strong service cannot be run from Whitehall. For patient choice to thrive it needs a different environment. One in which there is greater plurality in local services with the freedom to innovate and respond to patient needs.

It is an explicit objective of our reforms therefore to encourage greater diversity in provision and more choice for patients particularly for elective surgery. Hence primary care trusts having the explicit freedom to purchase care from the most appropriate provider – whether public, private or voluntary. From next April we will begin to move to a system of payment by results for NHS hospitals. Resources will follow the choices patients make so that hospitals who do more get more; those who do not, will not. Over the next four years an increasing proportion of each hospital’s income will come to it as a result of the choices patients make. For the first time in the NHS patients will be able to choose hospitals rather than hospitals choosing patients. That process will start this summer when patients waiting more than 6 months for a heart operation will be able to choose a faster waiting time in another hospital which has the capacity to treat them – whether it is public or private, on the doorstep or further afield, in this country or abroad.

Later this year we will also test in different parts of the country how patients with other conditions can exercise greater choice over where they are treated. We will want to work with the NHS in developing these policies – just as we have done in developing our thinking on NHS Foundation Trusts – so that by 2005 patients will be able to choose not just the location of their treatment but when to be treated and by whom.

This is the most fundamental change the NHS will have ever faced. It will mark 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. Of course different approaches will be needed to bring about improvements say, in emergency care or mental health services.

And more choice for patients, of course, requires more capacity in services. Patients can only choose to have an operation if a hospital is able to provide it. Consistent growth in staff numbers and in capital infrastructure will be needed if local NHS services are to expand patient choices and gain from the new system of financial incentives.

The biggest constraint the NHS faces is shortages of capacity. So I can tell this conference today that in addition to sustained growth in existing NHS provision, we will bring new providers from overseas into this country in order to further expand elective services for NHS patients.

A few have already started work in the NHS but as you know it is very early days. I can tell the Conference that we are now in discussions with a number of major overseas providers to bring clinical teams – in particular extra surgeons and other doctors – to this country. I can tell the Conference today, I will be meeting personally with prospective providers from both Europe and America over the course of the next few months with view to encouraging them to invest in England. They will concentrate on elective surgery in hard pressed specialties in those parts of the country where capacity constraints are greatest. I expect to see a growing number of these new providers in place beginning later this year. Like NHS use of existing private sector providers, this is not a temporary measure. These new providers will become a permanent feature of the new NHS landscape. They will provide NHS services to NHS patients according to NHS principles. And in the process they will open up more choices for patients and more diversity in provision.

These reforms are about redefining what we mean by the National Health Service. Changing it from a monolithic centrally run monopoly provider to a system where different health care providers – public, private, voluntary and not for profit – work to a common ethos, common standards and a common system of inspection. In such a 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.

It is also a fundamental change. Not in how the NHS is funded or the values on which it is founded, but in how it is organised. NHS healthcare no longer always needs to always be delivered exclusively by line managed NHS organisations. The task of managing the NHS becomes one of overseeing a system not running an organisation. Responsibility for day to day management can be devolved to local services. None of this means the abandonment of national standards. Far from it. It is precisely because over these last five years we have put in place such a rigorous framework of standards nationally that the centre of gravity can now shift to how improvements can be delivered locally.

So while some advocate a false choice between national standards and local autonomy, the experience from elsewhere in Europe in the health sector, and from across the developed world in other economic sectors, is that securing improvements in performance requires both.

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 public services as in the private sector. I have lost count of the number of times I have been told by NHS managers and NHS clinicians alike that the NHS has got to stop bailing out the poorest performers and instead reward the better performers in the NHS in order to provide the right incentives for innovation and improvement to take hold across the whole of the NHS. And that is precisely what we must do if we are to translate the extra resources into real results for patients.

That is the reason for star rating the performance of local health services so that those who are doing less well get more help, those that are doing best get more freedom and those that are persistently failing feel the consequences. Where there are persistent problems we will step in. Where there is progress we will step back. At one end of the spectrum new management teams – whether from the public, voluntary or private sectors – will be brought in through the franchising process to turn round NHS organisations that are in trouble. At the other the best performers will become NHS Foundation Trusts legally free from Whitehall direction and control. Three star trusts will have less monitoring and greater freedom.

The more overall performance improves – as I am confident it will – the more autonomy will be earned across the NHS. That is what I want to see happen. We are at the start of a transition where more and more decisions about the NHS are taken locally rather than centrally.

It is time to unleash the spirit of public service enterprise that I know exists in so many parts of the NHS.

As in any large organisation some functions will need to be undertaken centrally but they should be strictly limited. The Department of Health will focus on setting strategic objectives, determining standards, distributing and accounting for resources and securing the integrity of the overall system through for example workforce planning and better IT. Overall the Department will be slimmed down as power and resources are devolved out of Whitehall. Some functions will move from the Department to the new Commission for Healthcare Audit and Inspection as the existing Commission for Health Improvement, National Care Standards Commission and the value for money work of the Audit Commission are brought together. The new CHAI will benefit from the comments that the Confederation and others in the NHS have made about avoiding bureaucracy and fragmentation but it will have the teeth to ensure that money is being spent wisely and that standards are improving.

Rather than trying to drive improvements through top down performance management the transition will be towards improvements being driven through greater local autonomy in which PCT commissioning, new financial incentives and the choices that patients make become the driving force for change with scrutiny through independent inspection. That transition will take time. It will require careful management and a new, more mature understanding about the relationship between government and the health service where the government does less and the NHS does more.

To help smooth that transition there are three areas where I hope government can help the NHS.

First, by focussing on the priorities for patients. If the NHS is to deliver for patients it has to remain focussed on what counts for patients. And the extra resources must be properly focussed too. The NHS does many things. There will be many pressures from many quarters for many good causes. But none of us will be forgiven if having raised the resources we fail to use them to get the results that both staff and patients want to see. Shorter waiting times. Higher clinical standards. Better health outcomes.

The public’s priorities have to be the health service’s priorities. Getting waiting times down in every aspect of NHS care from ambulances to diagnostics, from primary care to secondary care. Providing quick high quality emergency services not least in A&E. Making sure that the fundamentals are right – clean wards and safe care. Improving cancer, cardiac, mental health and elderly services.

These are the priorities. In time it is true we will develop further NSFs but only at a pace the NHS can properly absorb. I know the complaint in the service is that there are too many priorities and too many plans. I sometimes hear people say they cannot see the wood for the trees. It is true that sometimes in the rush to make change happen we have opted for the short cut of a dictat from Whitehall when what was needed was a longer discussion with the service. But in a public service like the NHS there has to be accountability to ensure that public money delivers the results that patients want to see whether that is matrons in charge of wards or shorter waiting times for treatment.

So national standards are necessary. Nobody wants to see a lottery in care where cancer patients are denied treatments in one part of the country which they are entitled to in another.

And targets are necessary – without them history shows that GP and hospital waiting times would not now be falling so consistently. But national standards and targets work best when they are focussed on key priorities.

Today I can announce some changes that will do just that. To begin with we will reduce the number of plans that local health services have to submit to the Department of Health.

At present the NHS is asked to produce scores of plans every year. We will be working with the NHS to review the number of these plans with a view to cutting their numbers by at least two thirds. If we can go further we will. In future planning will focus around delivering the core priorities. The same will be true of monitoring. The concentration will increasingly be on outcomes and outputs. That will allow the volume of overall guidance and monitoring to be reduced. We have already cut the number of circulars issued to the NHS each year and shortened the planning guidance. But senior staff still complain they receive too much clutter that does not help them focus on the core priorities.

So I can announce today that we will establish a panel of senior managers and clinicians from the NHS to act as a firebreak, to vet communications between the Department and local health services so they are limited to those that are absolutely necessary.

Secondly, I want to give the NHS the stability it needs to deliver the NHS Plan. The five year financial settlement that the health service has now got allows us to plan for the longer term particularly to meet the waiting time reductions planned for 2005. I can confirm to this Conference today that when we make financial allocations to PCTs this autumn they will receive funding not for a single year but for three years. Annual planning and annual target setting can become a thing of the past. Local health services will be able to concentrate on what needs to be done to bring about improvements over the medium rather than the short term.

Thirdly, stability will help local health services implement a sustained programme of expansion. It is time to go for growth. To use the large scale increases in both revenue and capital funding to expand capacity. To get the staff, the buildings, and the equipment the NHS needs. To shift the balance of services so that more patients can be seen in primary, community and social services, not just in hospitals.

To help this programme of expansion take hold locally there will be help nationally. As far as IT is concerned we urgently need to reverse almost two decades of failed attempts to modernise the NHS core infrastructure. So I can tell this conference today that later this summer we will bring forward a nationally run IT programme which will be backed by large scale investment.

Alongside the programme to bring overseas clinical teams to England we will be helping to establish the first generation of Diagnostic and Treatment Centres to separate elective from emergency work. Some will be run purely by the NHS, some by the private sector, some through partnerships between public and private.

To help the NHS focus on this longer term capacity building the next three years there will be a minimum amount of earmarking by the centre of local NHS resources. PCTs will have greater discretion over how growing NHS resources are spent.

These changes are all about helping the NHS to deliver. The national standards are in place. The resources are there. The NHS Plan is underway. There is a clear focus on what counts for patients.

We are in transition but the direction of travel is one way. Our supply side reforms – payment by results, freedom of commissioning, power to PCTs, NHS Foundation Trusts, plurality of provision – all lead towards a more devolved and more diverse health service where patients have greater choice.

You know transition takes time. I know that. So does bringing about improvement. Public expectations are high. But they also need to be reasonable. People need to understand that a 10 year plan is exactly what it says. It will take time to be delivered in full. But the NHS has to prove – not in five years time or in ten – but over this coming year that progress is underway in every part of the service.

The Budget this year represents an enormous vote of confidence in all of you, in the whole of the health service.

The ethos of the NHS and its staff express the values of our nation. Some have said that the Budget is a gamble. In some people’s minds it may be. But not in mine. I wouldn’t have fought so hard for the resources we’ve now got if I thought there was a better way of providing health care for our country. For me there is no better way than a tax funded, well funded NHS.

It is a genuine One Nation policy that puts need before ability to pay. Quite simply in a world where health care can do more – but costs more- than ever before the NHS should be supported with our heads as well as our hearts.

With the investment now secured, with the reforms now taking place, with the brilliance of our staff, I can tell this conference without a moments hesitation: I believe the best days of the NHS are ahead of us not behind us. I believe that investment plus reform does equal results.

And above all, I believe that you can do it.

Below is the text of the speech made by Alan Milburn, the then Secretary of State for Health, on 22 May 2002.

Thank you for coming – and particularly to our guests from Denmark, Spain and Sweden. This is a unique event. A gathering of existing “Foundation” hospitals from other European countries and of prospective Foundation hospitals from this country. We have brought you together to learn from the successes that have been achieved elsewhere in Europe. To understand how the autonomy that hospitals enjoy there and that have brought improvements in care for patients could work here. Today’s event takes place against the backdrop of the recent Budget that has put funding for healthcare in Britain on a sustainable footing for the long term. Today the NHS is the fastest growing health care system of any major European country. There is of course a huge amount of catching up to do. After decades when under-investment put Britain behind the rest of Europe now we can have the ambition as country to be up with the best. In Europe and across the developed world, every country faces similar challenges in health care – growing public expectations, advances in treatments, changes in populations. Everywhere reform is on the agenda. There is a wide ranging debate taking place about the future of health care. In essence this debate revolves around two central questions. First how health care is funded. Second how it is organised. On the first the Government’s decision to double health service spending in real terms by 2008 from the position we inherited in 1997 is a declaration of faith in the NHS. With the right level of funding we believe it can be the best insurance policy in the world. No health care system comes for free. Improvements in health care have to be paid for. Through general taxation, social insurance, private insurance, charges or a mix of approaches. We believe that the benefit of a tax-funded well funded NHS is that it is an insurance policy that comes with no ifs and no buts: whatever your illness, however long it lasts you get cover as long as you need it. In a world where healthcare can do more but costs more than ever before, the NHS precisely because it provides care that is free, according to need not ability to pay, should in our view be supported with our heads as well as our hearts. So while others say we should adopt the system of funding from elsewhere in Europe we say those countries have not enjoyed a superior system of funding but a superior level of funding. The lessons to be learned from the rest of Europe are less about how health care is funded but more about what level of funding and what form of organisation is needed to translate resources into results for patients. For what is patently clear is that elsewhere in Europe health care systems have not only benefited from more resources but from a different way of being run. The NHS has great strengths in how it is organised. Its ethos and its staff express the values of our nation.

1. Thank you for coming – and particularly to our guests from Denmark, Spain and Sweden. This is a unique event. A gathering of existing “Foundation” hospitals from other European countries and of prospective Foundation hospitals from this country. We have brought you together to learn from the successes that have been achieved elsewhere in Europe. To understand how the autonomy that hospitals enjoy there and that have brought improvements in care for patients could work here.

2. Today’s event takes place against the backdrop of the recent Budget that has put funding for healthcare in Britain on a sustainable footing for the long term. Today the NHS is the fastest growing health care system of any major European country. There is of course a huge amount of catching up to do. After decades when under-investment put Britain behind the rest of Europe now we can have the ambition as country to be up with the best.

3. In Europe and across the developed world, every country faces similar challenges in health care – growing public expectations, advances in treatments, changes in populations. Everywhere reform is on the agenda. There is a wide ranging debate taking place about the future of health care. In essence this debate revolves around two central questions. First how health care is funded. Second how it is organised.

4. On the first the Government’s decision to double health service spending in real terms by 2008 from the position we inherited in 1997 is a declaration of faith in the NHS. With the right level of funding we believe it can be the best insurance policy in the world.

5. No health care system comes for free. Improvements in health care have to be paid for. Through general taxation, social insurance, private insurance, charges or a mix of approaches. We believe that the benefit of a tax-funded well funded NHS is that it is an insurance policy that comes with no ifs and no buts: whatever your illness, however long it lasts you get cover as long as you need it. In a world where healthcare can do more but costs more than ever before, the NHS precisely because it provides care that is free, according to need not ability to pay, should in our view be supported with our heads as well as our hearts. So while others say we should adopt the system of funding from elsewhere in Europe we say those countries have not enjoyed a superior system of funding but a superior level of funding.

6. The lessons to be learned from the rest of Europe are less about how health care is funded but more about what level of funding and what form of organisation is needed to translate resources into results for patients. For what is patently clear is that elsewhere in Europe health care systems have not only benefited from more resources but from a different way of being run.

7. The NHS has great strengths in how it is organised. Its ethos and its staff express the values of our nation. Its unitary structure gives it great advantages both in overall levels of efficiency and in its focus on public health for example. Its primary care services, led by Britain’s family doctors, are the envy of many other countries. However, in addition to its long standing capacity problems, the NHS has great structural weaknesses too – not least its top down centralised system that tends to inhibit local innovation and its monolithic structure that denies patients choice. These weaknesses are a product of the health service’s history. At the time the NHS was being formed as a nationalised industry in the UK elsewhere in Europe many socialist or social democrat governments were creating institutions which favoured greater community ownership over state ownership. Whereas in the UK’s health care system there is uniformity of ownership, in many other European countries there are many not-for profit, voluntary, church or charity-run hospitals all providing care to the public health care system. There are private sector organisations doing the same. As other European nations testify there is no automatic correlation that tax-funded health care has to mean health care supply run purely by central government. Tax funded health care can sit side by side with decentralisation, diversity and choice.

8. There are important lessons to be learned in this country from the more diverse European model of provision. When I visited the Alcorcon hospital in Madrid last year for example I was struck by the fact that the greater independence it enjoyed from the rest of the state run health system had given patients there faster waiting times and improved outcomes despite dealing with a more severe case mix than comparable state run hospitals. As we will hear from our international colleagues today greater independence has improved performance in hospitals across Europe. Why? Because whatever the profession or walk of life, people perform best when they have control. Giving local organisations greater freedom helps promote innovation and encourages enterprise. In the NHS that is particularly important because of the high level of skills and knowledge that clinicians and managers have. Releasing their talents – and those of other staff – is the key to better health care.

9. Our reform programme for the NHS in this country needs to absorb some of these lessons. As the NHS Plan indicated a million strong service cannot be run from Whitehall. For patient choice to thrive it needs a different environment. One in which there is greater plurality in local services which have the freedom to innovate and respond to patient needs. It is an explicit objective of our reforms therefore to encourage greater diversity in provision and more choice for patients. Hence new providers from overseas being brought into this country – alongside greater use of existing private sector providers – to expand capacity for NHS patients. Primary care trusts having the explicit freedom to purchase care from the most appropriate provider – be they public, private or voluntary. Hospitals to be paid by results with resources following the choices that patients make so that hospitals who do more get more; those who do not, will not.

10. These reforms are about redefining what we mean by the National Health Service. Changing it from a monolithic centrally run monopoly provider to a system where different health care providers – public, private, voluntary and not for profit – work to a common ethos, common standards and a common system of inspection. In such a 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 their ability to pay. This is the modern definition of the NHS.

11. It is also a fundamental change. Not in how the NHS is funded or the values on which it is founded, but in how it is organised. NHS healthcare no longer needs to always be delivered exclusively by line managed NHS organisations. The task of managing the NHS becomes one of overseeing a system not running an organisation. Responsibility for day to day management can be devolved to local services. None of this means the abandonment of national standards. Far from it. It is precisely because over these last five years we have put in place such a rigorous framework of standards nationally that the centre of gravity can now shift to how improvements can be delivered locally. So while some advocate a false choice between national standards and local autonomy, the experience from elsewhere in Europe in the health sector and from across the developed world in other economic sectors, is that securing improvements in performance actually requires both.

12. As both the NHS Plan and our recent follow up command paper Delivering the NHS Plan make clear, it is right that standards are set nationally but it is wrong to try to run the NHS nationally. It is only frontline clinicians and managers in day to day contact with patients who can transform local services. That is why Primary Care Trusts are being given control over 75% of NHS resources. Why we look to PCTs in turn to devolve to their constituent practices. It is the reason for star rating the performance of local health services so that those who are doing less well get more help and those doing best get more freedom. And it is why we want to set up NHS Foundation Trusts with the local flexibility and freedom to improve services for patients without day to day interference from Whitehall.

13. In January this year I announced that we were developing plans to enable the best performing NHS organisations to become NHS Foundation Trusts. Since January my officials have been working with the chief executives of three star trusts and others to develop these ideas. They have also been looking at how services are organised in other countries and the lessons we can learn from them.

14. I can set out today how we now plan to proceed to establish NHS Foundation Trusts. First of all in the summer we will set out how NHS trusts can apply for foundation status and the criteria that will be used to assess applications. Decisions on the first NHS Foundation Trusts will be made in the autumn. The first wave will be selected from those that achieve three star ratings this July. They will need to demonstrate that they have the management capability and clinical support to make a success of NHS Foundation Trust status, and that they have the support of the local PCTs who commission services from them. They will need to show how they will use their freedoms to demonstrate rapid progress in delivering the NHS Plan.

15. A number of existing three star Trusts have given firm expressions of interest in joining the first wave of NHS Foundation Trusts. They are Northumbria Healthcare NHS Trust, Peterborough Hospitals NHS Trust, Norfolk and Norwich University Hospital NHS Trust and Addenbrooke’s NHS Trust.

16. If these Trusts are successful in meeting the criteria they and others who come forward will start operating as shadow NHS Foundation Trusts in April next year. I can also say that we intend to legislate to enshrine in statute the freedoms and responsibilities that NHS Foundation Trusts will have. Subject to legislation I expect the first of them to become fully operational before the end of next year. As performance across the NHS improves so more autonomy will be earned by more local NHS organisations.

17. NHS Foundation Trusts will operate in a quite different way from existing NHS Trusts. NHS Trusts were supposed to guarantee self governing status. In fact they were at best a half way house and at worst a sham. Trust status promised independence but in practice didn’t guarantee it. In reality their legal status – with direct accountability to Ministers – meant that Whitehall continued to hold on to the purse strings, maintained the powers of direction and continued to run the NHS as it had been since 1948. The challenge now must be to genuinely free the very best NHS hospitals from direct Whitehall control.

18. We plan to do this firstly by removing the Secretary of State’s powers of direction over NHS Foundation Trusts. Instead of being line managed by the Department of Health, they will be held to account through agreements and cash for performance contracts they negotiate with PCTs and other commissioners as well as through independent inspection. These contracts will reflect national priorities around reduced waiting times and improved clinical outcomes. The expectation must be that the greater freedoms that NHS Foundation Trusts will enjoy will help them exceed national performance targets but that will be a matter for local not national negotiation. Those that perform well will benefit from the system of payment by results and patient choice that we announced in Delivering the NHS Plan.

19. There will of course need to be appropriate safeguards in place. NHS Foundation Trusts will operate according to NHS principles. They are there to serve NHS patients by providing high quality care that is free and delivered according to need not ability to pay. They will be subject to inspection by the new Commission for Healthcare Audit and Inspection (CHAI). The Commission will play a key role in assessing performance and in reassuring patients and the public that national standards of service and quality have been met wherever care is provided. Strengthening arrangements for audit and inspection through CHAI are an essential complement to increased provider plurality, including the setting up of NHS Foundation Trusts.

20. CHAI – rather than the Department of Health – will therefore take on the function of regulating NHS Foundation Trusts and stepping in to take necessary action to protect patients and the public.

21. Secondly, we intend to establish NHS Foundation Trusts as free-standing legal entities which are indeed free from direction by the Secretary of State. We are currently exploring a number of options about how best to establish NHS Foundation Trusts in law. In particular there has been growing interest in recent years in developing the concept of the public interest company – a middle ground within public services between state-run public and shareholder-led private structures. Organisations as diverse as the Co-operative Movement and the Institute of Directors have made the case for such organisations on the basis that they have a clear public service ethos and are not for profit. These organisations are based firmly within the public service with their assets remaining within public ownership and being protected against takeover by the private sector. They are toughly regulated but not externally controlled. They open up more potential for both staff and public involvement.

22. We are continuing to actively explore the best option here based on a firm principle that should guide us. As national control over day to day management of these NHS hospitals ceases so local community input will need to be strengthened. NHS Foundation Trusts will have the ability to develop governance arrangements that enable patients and the public to play a more effective part in the running of the NHS at a local level. The NHS is a national service but it is delivered locally. The relationships that count most are those between the local patient and the local clinician, the local community and the local hospital. 1948 silenced the voice of the local community in the NHS. It is time it was heard again.

23. We are exploring how best this could be done. One potential model would involve local members of the community sitting alongside other key stakeholders such as hospital staff, local businesses, local authorities and, where appropriate, universities as lay governors. In this model day to day management of the NHS Foundation Trust would rest in a separate board including the chief executive and other senior staff such as clinical leaders. However they are constituted NHS Foundation Trusts will remain part of the NHS family but with local freedom from national control.

24. Thirdly, then, NHS Foundation Trusts will be freed up from having to respond to an excessive number of prescriptive central demands, guidance and reporting arrangements. As free-standing organisations they will be held to account through the commissioning process rather than through day to day line management from Whitehall. They will have the freedom to retain proceeds from land sales to invest in new services for patients. We are exploring how we can increase their freedom to access finance for capital investment under a prudential borrowing regime modelled on similar principles to that being developed for local government. The intention is that they will have greater freedom to decide what they can afford to borrow and they will be able to make their own decisions about future capital investment. They will be able to use the flexibilities of the new pay system we are currently negotiating to modernise the workforce including developing additional rewards for those staff who are contributing most. Exercising these freedoms will give NHS Foundation Trusts precisely the sort of autonomy that is commonplace for hospitals elsewhere in Europe.

25. Some say this is a form of backdoor privatisation. That is utter nonsense. There will be a lock on the assets of NHS Foundation Trusts so that they work for NHS patients. Their purpose will be to provide NHS services to NHS patients according to NHS principles. They will be governed by people from the local community instead of by the state or by shareholders. They will be part of the wider NHS family. They are all about unleashing the spirit of public service enterprise that exists within the NHS but for too long has been stifled.

26. NHS Foundation Trusts will help create a radically different health service. One that is true to its values but is changed in its structures. One that learns the lessons from what has worked elsewhere in Europe. I want to thank our international speakers who are here today to share their experience and their insights with us. I know that there is more we can learn from them as we develop our approach. I would also like to thank people from the NHS who have been working with us to develop our thinking on NHS Foundation Trusts. The development of policy in this area I believe exemplifies a new way of doing business between the Department and the NHS. It is one that I hope we can build on for the future.