Britain: Why New Labour is losing the health war

Want to really know how well - or not - the Government is doing? Ask a senior minister. No, really: an outbreak of candour has descended upon those reaches of the Cabinet who generally prefer to tell us that everything is going marvellously.

But today the Health Secretary Patricia Hewitt tells this paper that she wishes NHS reforms had been begun earlier and gone faster. Hazel Blears told us the same thing last week on state schools. In the no-man's land between the Blair-Brown leaderships, ministers are anxious to defend their record and stake their claim to a place in the next phase of the New Labour story.

Mrs Hewitt is to be commended for her openness, but even she does not reflect the degree of political concern inside the party that it could "lose health". A splenetic memo from Mr Blair's favourite pollster Philip Gould reflects that fear and recommends health as the first area of policy which needs to be addressed to get the party on course for a fourth term.

"Just tell me," asks one young minister, "How did we contrive to lose our way quite so badly in the one area Labour has a cast-iron, in-built advantage as the party which founded and defended the NHS?" The voters are confused - a hitherto impregnable poll lead over the Tories on competence to run the NHS has entirely disappeared.

A wave of "reconfigurations" - the newspeak for unpopular hospital closures to create bigger treatment centres is underway, the NHS is struggling with massive deficits - five hospital trusts in London alone are in the red.

Between now and the next election, Labour has to get the budget back into balance, close hospitals and reorganise services accordingly - and deliver the promised maximum waiting time of 18 weeks. It is a very tall order indeed. No wonder David Cameron is starting to enjoy himself with a "campaign" against Labour's "cuts" - serving up the same jibes that used to be turned on the Tories as a preliminary salvo.

Tony Blair began his NHS reforms seven years ago, with a barnstorming speech about dragging the service "out of the Forties and making it fit for the new century". What has been lacking is not good intentions - as always, he saw more clearly than many around him that the NHS needed to change to satisfy the demands of modern users.

What has been lacking is consistency of implementation. "The trouble with Tony," says a civil servant who worked closely with him, "is that he thinks that just because he says he wants something to happen, it is going to happen." Delivery tsars have come and gone, but implementing reform has always been the Achilles heel of the Blair years.

To which the PM might well respond that it might have happened a bit faster had healthcare reforms not become a football kicked between Number 10 and the Treasury, with the Chancellor intervening to stymie some of the plans for autonomy developed by Alan Milburn as health secretary and then approving large pay increases across the board with too few guarantees of value for money in return. Either way Mr Brown is set to inherit a lot of unfinished business at an inconvenient time in the electoral cycle.

Consultants' restrictive practices still go unchallenged, managers become mere administrators tied to clipboards and computers and we have acquired some of the most expensive GPs outside Europe thanks to the 2004 Treasury pay deal, without securing reliable out-of-hours cover that does not rely on jobbing locums of variable quality.

To add to the good news, a Department of Health leak reveals that the Government will miss its MRSA target and the BMA claims today that waiting lists are being routinely fiddled. (The BMA, we should remind ourselves, is a trade union with a posher name: it is good at producing Jeremiads but is not exactly putting its shoulder to the wheel to make things work either.) The most well-argued account of what isn't working I have come across recently comes from Ian Smith - a near-miss form the job of NHS Chief Executive - in the Health Service Journal.

"There is no doubt, " he writes, " that health outcomes have increased over the last 10 years," he writes. "The Government deserves credit for acting to change historic weaknesses in healthcare - under-provision of resources and inadequacy of policy design ... (but) pouring money into an unreformed, poorly managed system has inevitably created waste and will continue to do so."

Mr Smith cannot see how this can be remedied without giving managers far greater freedoms to be accountable and responsible for what they produce and allowing the Health Service to be radically decentralised. Nor can I. The people presently appointed to lead change, he points out, are senior NHS managers and officials. "It s not possible for someone brought up within the system to have the inclination, derive experience and perspective to change it."

Mr Blair once told me that he has nothing in principle against the private sector managing parts of the NHS if that yielded the best results. But NHS management has not really crossed this Rubicon. Private sector management thrives on risk and reward: yet whoever loses their job at senior level in the health service for failing to deliver?

Mrs Hewitt, or a successor, cannot be expected to control everything from her perch in Whitehall. A complex, modern health service has to give responsibility to managers to ensure that agreed changes are driven through from the top to the bottom as efficiently as possible, and allow a market in incentives to make it happen. I suspect that will mean acquiring the very best managers, many from the private sector with experience of this sort of process, paying them accordingly to deliver results and toughing out the reaction from the vested interests. Most importantly, they should be left by the politicians to get on with it.

Mr Brown is no slouch on political strategy. He knows that rescuing New Labour's reputation as the party which enjoys most public trust on health is a key defence against the Tories and he will focus his efforts here. Yet it remains mysterious to me what mechanism he believes will transform the service into a more consistently excellent one.

On past practice, he looks an unlikely figure to embrace Mr Smith's nostrum of more independence from Whitehall and the Treasury and expansion of private sector management. One of his keynote speeches in the last parliament outlined his vision of the "limits of the market" in health. But without some more radical prospect, all he has to fall back on, seven years after the Big Bang on NHS reform started, are the old remedies of targets (yep again) for three per cent efficiency savings and exhortations, patchily implemented in the wards and surgeries.

New Labour rallied voters in 1997 with the promise to "save" the NHS. It had time to do so and patience is running out. Mr Brown can deliver a political surprise and seek to show he is a real healthcare reformer: or he can trust a continuation of the present in-between solutions will convince the voters next time. That would be quite a gamble, and one he might lose.

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