Can Ed Miliband reform the NHS, and not just save it?

Labour’s health policy should focus on patient empowerment and obtaining the best value for money fo

Ed Miliband's primary task today was to turn the screw on Andrew Lansley. In this, he has been largely successful, but his speech was also revealing for what it says about his future approach to public-service reform.

During the Labour leadership campaign, none of the candidates had an incentive to raise difficult reform arguments, for fear of alienating union and grass-roots votes. This might have been tolerable if Labour had renewed its pitch on public services in its last years in office. But despite repeated attempts, it only came close to a new, post-Blairite paradigm with its manifesto pledges on citizen guarantees or entitlements and public-sector takeovers of weak providers by strong ones. It is fair to say that Labour thinking on public services has not advanced much since about 2004.

The coalition government has made much running dismantling the worst elements of New Labour's statecraft: its indicators and targets, anaemic localism and a latter-day preference for stakeholder management over bold reform. But it has said very little about the big strategic choices. There is no sense in the coalition's programme of which public services best support full employment and an affordable welfare state; of the challenges that an ageing society poses for reform of the NHS and social care; or how real innovation and productivity can be secured in universal services that face enormous cost pressures.

Miliband devoted a substantial section of today's speech to outlining the main long-term challenges facing the NHS, including far higher levels of chronic disease, growing levels of mental illness and the rising social care needs of the elderly. Each of these challenges requires services that are more joined up (integrating NHS care with social care provision, for example) and at the same time more preventative, to take pressure off the acute services.

But they will also entail rising costs. This is why making public services more productive and efficient needs to be a key task for the centre left and why Miliband is right to say that he will be "a reformer of the state as well as the market". If we are to defend high-quality universal public services, at a time when voices on the right are calling for services to be cut back and targeted just at the most disadvantaged, then we need to set out how these can be afforded, given rising cost pressures and the public's reluctance to pay higher levels of tax.

Miliband emphasised that to make services responsive to their users requires strong forms of accountability. Here he needs to learn the lessons of the last Labour government, which generally favoured the use of central targets in order to hold professionals to account. These targets did lead to significant improvements – waiting times fell and the number of failing schools was radically reduced. Nevertheless, there were too many targets that made doctors and teachers the slaves of a tick-box culture. Professionals on the front line need the flexibility to do what is right for individual patients and children, rather than simply follow Whitehall guidelines.

A chance to pull ahead

But if Miliband wants to reduce central targets, how does he ensure accountability to patients and parents? In the health service, the proposed health and well-being boards need to be strengthened by giving them the power to sign off the strategic plans of GP consortiums.

In education, it is crazy for the secretary of state to be directly funding an ever-growing number of free schools and academies from Whitehall. Instead, we should look at the idea of our big cities having an appointed schools commissioner, whose role would be to raise educational standards in their area, allocate funding to each school and provide shared support services to local schools. Having a single individual to perform this role would provide for greater focus and accountability to parents.

In policing, Labour should accept the government's plans for elected police and crime commissioners, but in the long term look at shifting responsibilities for policing in the large cities to elected mayors.

Miliband is absolutely right to point to the lack of patient empowerment in the coalition's NHS reforms: the agenda is all about bureaucratic change or market disciplines. Very little is said about passing power to patients. This is a golden opportunity for Labour to get ahead of the debate, by advocating the devolution of funding to "personal budgets" for those with chronic long-term conditions.

But Miliband is relatively silent on the role of competition in public services. Oppositions always default to woolly talk of "collaboration" and partnership. But competition has its place. In the NHS Blair's 2006 reforms – which gave patients the right to choose from a list of five hospitals and which led to competition for patients between NHS trusts – successfully improved outcomes (PDF) measured by length of hospital stay and deaths from heart attacks.

Labour should oppose the government's proposal to make the promotion of competition the overriding objective of the health regulator Monitor. This is putting the cart before the horse. Instead, its objective should be ensuring the best value for money for the taxpayer: competition may or may not be the best means of achieving that.

Ed Miliband criticised the Health Bill on the grounds that it would undermine the sense of "national mission" underpinning the NHS. He should be careful that talk of the public-service ethos is not used simply to defend vested interests. But his defence of the NHS as a national institution resonates with the "Blue Labour" approach.

The NHS is a popular public institution, which embodies values of solidarity, public interestedness and fairness. It is a British tradition. Any decent society should defend institutions that are run by and large in the public interest and not simply for profit. There is a very real danger that these institutions could be lost in the government's rush to expose every public service to market competition.

Miliband may save the NHS, but can he reform it?

Nick Pearce is director of the Institute for Public Policy Research (IPPR).

Nick Pearce is Professor of Public Policy & Director of the Institute for Policy Research, University of Bath.

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The 5 things the Tories aren't telling you about their manifesto

Turns out the NHS is something you really have to pay for after all. 

When Theresa May launched the Conservative 2017 manifesto, she borrowed the most popular policies from across the political spectrum. Some anti-immigrant rhetoric? Some strong action on rip-off energy firms? The message is clear - you can have it all if you vote Tory.

But can you? The respected thinktank the Institute for Fiscal Studies has now been through the manifesto with a fine tooth comb, and it turns out there are some things the Tory manifesto just doesn't mention...

1. How budgeting works

They say: "a balanced budget by the middle of the next decade"

What they don't say: The Conservatives don't talk very much about new taxes or spending commitments in the manifesto. But the IFS argues that balancing the budget "would likely require more spending cuts or tax rises even beyond the end of the next parliament."

2. How this isn't the end of austerity

They say: "We will always be guided by what matters to the ordinary, working families of this nation."

What they don't say: The manifesto does not backtrack on existing planned cuts to working-age welfare benefits. According to the IFS, these cuts will "reduce the incomes of the lowest income working age households significantly – and by more than the cuts seen since 2010".

3. Why some policies don't make a difference

They say: "The Triple Lock has worked: it is now time to set pensions on an even course."

What they don't say: The argument behind scrapping the "triple lock" on pensions is that it provides an unneccessarily generous subsidy to pensioners (including superbly wealthy ones) at the expense of the taxpayer.

However, the IFS found that the Conservatives' proposed solution - a "double lock" which rises with earnings or inflation - will cost the taxpayer just as much over the coming Parliament. After all, Brexit has caused a drop in the value of sterling, which is now causing price inflation...

4. That healthcare can't be done cheap

They say: "The next Conservative government will give the NHS the resources it needs."

What they don't say: The £8bn more promised for the NHS over the next five years is a continuation of underinvestment in the NHS. The IFS says: "Conservative plans for NHS spending look very tight indeed and may well be undeliverable."

5. Cutting immigration costs us

They say: "We will therefore establish an immigration policy that allows us to reduce and control the number of people who come to Britain from the European Union, while still allowing us to attract the skilled workers our economy needs." 

What they don't say: The Office for Budget Responsibility has already calculated that lower immigration as a result of the Brexit vote could reduce tax revenues by £6bn a year in four years' time. The IFS calculates that getting net immigration down to the tens of thousands, as the Tories pledge, could double that loss.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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