Intended for healthcare professionals

Analysis And Comment Health service reform

Seven years of feast, seven years of famine: boom to bust in the NHS?

BMJ 2006; 332 doi: (Published 13 April 2006) Cite this as: BMJ 2006;332:906
  1. Alan Maynard, professor of health economics (,
  2. Andrew Street, senior research fellow2
  1. 1 Department of Health Sciences, University of York, YO10 5DD
  2. 2 Centre for Health Economics, University of York
  1. Correspondence to: A Maynard
  • Accepted 3 April 2006

Service improvements in the NHS have not kept pace with the dramatic increase in expenditure. As expenditure growth slows, attention must focus on reforming the incentives faced by NHS staff and institutions rather than on indulging in yet another reorganisation

The Labour government was elected in 1997, trading on the popular belief that the National Health Service was “safe in their hands.”1 In office the government initially adhered to expenditure levels inherited from the Conservatives and chose to focus on structural and process reforms, including reorganisation of purchasing bodies, the introduction of national service frameworks, and the creation of regulatory bodies such as the National Institute for Clinical Excellence (NICE) and Commission for Health Improvement (CHI).

In 2000, breaking from the Conservative's expenditure plans, the government decided to initiate a programme of NHS investment at a level (annual budget increases of 7%) and for a period (seven years) unequalled in any other healthcare system.2 The Wanless report was used to provide some intellectual support for this bold policy.3

Enjoying the feast

Almost seven years on, it is clear that the spending has improved services. More patients are being treated and cared for—in acute and community hospitals and primary care, and by newly established service providers such as walk-in centres and NHS Direct.4 Waiting times for elective surgery have been driven down, by targeting people who have been waiting a long time, so that no one waits more than six months for an inpatient admission.57 The national service frameworks have significantly improved the quality and timeliness of service delivery and there has been investment in new facilities and some reduction in the awesome maintenance backlogs inherited in 1997.7 8 But these improvements have not kept pace with the spending increases. From 1998-9 to 2003-4 NHS productivity …

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