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BMJ No 7126 Volume 316
Education and debate Saturday 17 January 1998
The New NHS: commentaries on the white paper
Financing the NHS
Chris HamThe white paper sets out a bold and imaginative vision for the organisation and provision of health care. The unanswered question is whether the money will be available to turn this vision into reality.
| Taking the optimistic view - the view set out in the white paper - there is no reason to believe those who argue that the NHS will be unable to cope with the demands of increasing public expectations, medical advances, and an aging population. On this reading, the proposals for improving clinical effectiveness and reducing unnecessary bureaucracy will enable the NHS to accommodate future pressures without sacrificing its commitment to universality and comprehensiveness. Moreover, by aligning clinical and financial responsibility, the government's plans will empower doctors and other health care professionals to improve services from the patient's perspective, particularly by reducing variations in performance. |  | |
| The white paper may commit the government to a health service
available to all on the basis of need, not ability to pay, but many
trusts are still struggling to deal with emergency admissions and to
balance their budgets Photo: BMJ/PRUESS/S'OTON UNIV TRUST |
Taking the pessimistic view, there is nothing tangible in the white paper to show that the NHS will be adequately funded to deal with the pressures under which health authorities and trusts are currently working, let alone enable them to respond to increasing demands in future. In this respect, there is a remarkable similarity with Service with Ambitions,the white paper issued by the former Conservative government,(1) which also promised to increase the NHS budget in real terms but did not specify the size of the increase. Those holding this view would argue that handing over control of resources to primary care groups is less a means of empowering professionals than a way of devolving responsibility and blame for unpopular rationing decisions.
Which of these views becomes reality depends on the outcome of the comprehensive spending review being undertaken by the Treasury and on the realism of the white paper's estimate that cuts in administration will save £1bn over the lifetime of the current parliament. Justifying the latter estimate, the government hopes that the move to long term service agreements, the ending of extracontractual referrals, and reductions in management costs will deliver savings of around £250m a year. Although this figure is much lower than the claims made by Labour spokespeople in opposition, it will not be easy to release these sums unless there is a major programme of trust mergers and continuing action by the NHS Executive to bring high spending health authorities and trusts (in terms of management costs) closer to the average. Even if the government's figures are taken at face value, the additional resources available for patient care will be modest (less than 1% of the NHS budget per year) and will only partly help to fill the funding gap.
Of greater importance is the comprehensive spending review. The white paper effectively pre-empts the review by committing the government to maintain a health service available to all on the basis of need, not ability to pay, and funded through general taxation. It also explicitly rejects the argument that rationing or charging for treatment will be necessary. This suggests that the review will focus on other issues, like the control of pharmaceutical costs and measures to increase NHS efficiency, rather than the principle of health service funding. Many in the NHS will also hope that it creates greater certainty by sketching out a funding path for health care which removes some of the instability of current arrangements.
Notwithstanding the additional funds made available to deal with
this winter's pressures, health authorities and trusts are struggling
to balance their budgets, deal with emergency admissions, and achieve
the targets for waiting times. While the white paper was never intended
to examine the adequacy of NHS funding, these financial pressures seem
certain to preoccupy ministers in the coming months. It would be a
tragedy if implementation of a vision for the organisation and
provision of care that has attracted widespread support were to be
frustrated by an approach to NHS spending that owes more to electoral
expediency than the current state of the p
Health Services Management Centre,
References
1 Secretary of State for Health. The National Health
Service. A service with ambitions. London: HMSO,
1996.
University of Birmingham,
Birmingham B15 2RT
Chris
Ham, director
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