The leading health management journal, the Health Service Journal, has now seen a draft of Labour’s long-awaited 10-year Plan for the NHS, and pronounced it “a mess.” We might have guessed as much from the shambolic changes of direction and contradictory announcements in the last few months.
But what is especially troubling is that despite all their talk about “reform” Labour seems to have come up with no really new ideas during the last 15 years: instead almost everything they are doing or trying to do is a repeat of past policies from 2000-2010.
The Urgent and Emergency Care Plan, published early in June, commits to publish ‘league tables’ on performance, supposedly “to drive improved transparency and public accountability and also to encourage less effective systems to work more closely with high performing systems to accelerate improvement.”
League tables, coupled with macho phrases such as “zero tolerance for failure” were first brought back out from cold storage last November in a speech to NHS Providers by Health and Social Care secretary Wes Streeting.
Identifying and rewarding star performers while pillorying failing trusts was indeed tried by New Labour. A controversial “star ratings” system was one of a raft of market-style ‘reforms’ driven on by Alan Milburn in his spell as Health Secretary from 1999 to 2003, and picked up and continued by several of his successors. The star ratings were published from 2000 to 2005.
Other New Labour “reforms” driven by Milburn included the creation of semi-autonomous Foundation Trusts, the development of privately-run “Diagnostic and Treatment Centres” (later expanded and rebranded as Independent Sector Treatment Centres), and the replacement of block contracts for paying NHS hospitals with “payment by results,” which opened up an increasing flow of NHS funds out of the NHS and in to the private sector.
All of these are linked by the irrational conviction – again linking back to the 2000s – that a competitive market, rather than planning, and increased private provision rather than an expanded NHS were the way to improve health care. And although we are a long way from the extremes of New Labour’s market mania from 2005 onwards, the recently published “Model Integrated Care Board Blueprint” explicitly discusses the steps to “shape the local market”.
We should also remember Labour’s far-reaching “partnership” agreement with the private sector signed in January. It goes much further than the Tory government’s 2022 Health and Care Act by committing to include the private sector in local NHS planning and decision-making – something Tory ministers were willing to rule out.
Many of these old ideas are now being revived by Wes Streeting, who has surrounded himself with a Blairite team of advisors, seems to have no new ideas of his own, and seems locked in to repeating past failures.
Back in 2003 the star ratings system was used to decide which trusts could apply for Foundation Trust status: only the top-rated, 3-star trusts – already the wealthiest and best-performing – were eligible.
Streeting now claims that the introduction of foundation trusts was “one of the most successful NHS reforms in the last 25 years,” and argues that earned autonomy, greater responsibility for boards and the freedom to innovate is “still the best way to drive up standards.”
He has promised the 10-Year Plan will reintroduce “incentives, flexibilities, and freedom from central control” for local providers delivering a quality service, restoring powers to the best-performing foundation trusts.
But are FTs the success Streeting claims? Research published in 2011 by York University academics, found NO evidence of any substantial positive “FT effect”:
“the issue perhaps is … whether the extra costs involved in setting up and regulating FTs are justified. […] although there are … examples of FTs introducing novel treatment paths and service arrangements, … it is difficult to know whether the Trusts would have been able to make such changes anyway. There is also limited robust research evidence to date on the degree to which the broader aims of “social ownership” as expressed by the government at the launch of FTs have been achieved, especially in terms of accountability to local communities.”
In 2015, the Health Foundation came to a similar conclusion, emphasising how similar was the performance of NHS trusts and foundations:
“… across a number of quality measures, Foundation Trusts and NHS trusts perform similarly. For the proportion of patients receiving harm free care NHS trusts seem to outperform FTs.”
Tory Health Secretary Andrew Lansley was an enthusiastic supporter of FTs. The controversial Health and Social Care Act which formed the basis of his massive NHS reorganisation in 2012 gave FTs a new freedom: to grow their private patient income to almost half their total income. According to the HSJ’s leaked draft of the 10-year Plan that freedom would remain in place.
Indeed FTs would be freer still: they would no longer be required to have governors, or representatives for staff and the local public: and they would be able to manage the entire healthcare budget for a local population, becoming “integrated health organisations” or “IHOs”.
Despite Lansley’s enthusiasm the austerity policies of the Cameron government began to squeeze FTs as well as NHS trusts. A King’s Fund blog in 2016 noted the continued dependence of FTs on government and NHS support, and argued the FTs were: “independent corporations on paper, yet entirely dependent on the state in reality – for funding, capital investment and bailouts when things went wrong.” And as the financial situation got worse:
“Cash-strapped commissioners withheld funding. And large swathes of the foundation trust sector found themselves in breach of Monitor’s [the regulator] financial rules and subject to intervention, not through any fault of their own in many cases, but because of the gap between funding and the real cost of services.”
Milburn had wanted FT “freedoms” to include freedom from any accountability to the NHS or to ministers; freedom to borrow on the money markets, freedom to set pay levels for all of their staff, and freedom to retain surpluses even if the rest of the surrounding NHS was drowning in deficits. But he could not win support for these ideas from his own party, which voted decisively to reject foundation trusts at its 2003 conference.
Gordon Brown as Chancellor had in any case immediately vetoed the freedom to borrow.
The theoretical freedom of FTs to set local pay for their staff meant potentially overriding the new national Agenda for Change pay reforms then being put in place to cover all staff except doctors and very senior managers. That freedom was eventually largely discarded as impractical by most foundation trusts after a few experiments consumed huge amounts of management time and brought conflict with the unions.
In the end none of the proposed freedoms survived the ups and downs of political and financial pressures after the first foundation trusts were established in 2004. Some key freedoms had already been sacrificed in the hard fought battle to get Milburn’s legislation establishing foundations through parliament, in the teeth of strong opposition from organisations representing almost all sections of health workers, from non-health trade unions, patients’ groups and many of the Labour back bench MPs who were not on the ministerial payroll.
The star ratings were little more than a fig leaf to disguise the funnelling of extra cash to the trusts which were already the best equipped and the strongest financially, leaving the weaker trusts to struggle by, or face heavy-handed intervention.
The star ratings were criticised by the Royal Statistical Society (which warned that they “demoralise and antagonise” staff and damage the health service as a whole”), and by Dr Foster, an organisation which compared the levels of staffing and other aspects of hospitals: Dr Foster pointed out that none of the key targets for achieving 3-star status was clinical.
Instead the star rating focus was on waiting times, cleanliness and financial balance sheets. Hospitals which fell foul of these measures would receive no stars, irrespective of the quality of care provided by their doctors and professional staff.
Trusts which passed this hurdle were then compared with others on another 28 performance indicators, only eight of which took clinical care into account, and only one measured levels of mortality: most were concerned with waiting times, patient satisfaction surveys and management targets on sickness absence.
Dr Foster’s investigation revealed that mortality rates in some three star hospitals were worse than in some with no stars: 13 apparently top flight hospitals had above average mortality, the worst being Walsall Hospitals (26 per cent above average), Essex Rivers (15 per cent above) and Basildon and Thurrock (12 percent above).
Another major flaw with the star ratings and with establishing Foundation Trusts as an elite, privileged group amongst NHS providers was that it could encourage trusts – most notably Mid Staffordshire Hospitals – to make swift and massive cutbacks in staffing to wipe out long-standing deficits and win FT status.
The Mid Staffordshire trust bosses decided the quickest way to cut £10m from annual spending was to sack more highly-paid clinical staff. So they axed nursing and medical staff, with disastrous impact on patient care, creating a scandal that was eventually later exposed by local journalist Shaun Lintern, culminating in the Francis Report in 2013.
It seems likely that a return of League Tables as a means to compare acute trusts in very different circumstances in 2025 will run into similar problems.
In his June 12 speech to the NHS Confed Expo conference Streeting insisted trusts which fail to balance the books may be “placed into administration,” with the Department of Health and Social Care stepping in to replace the leadership, offering bonuses to attract successful bosses to take over.
But the numbers of trusts facing severe financial problems is so great it’s unlikely there will be enough suitable people to take over.
Streeting also seems quite oblivious to the wretched record of such policies, especially the ‘failure regime’, installing a Trust Special Administrator, which was passed in to law by New Labour in 2009 and amended in 2012, but proved a costly failure on both occasions it has been used (to deal with the Mid Staffordshire Hospitals Foundation Trust, and to break up the South London Hospitals Trust, which had been bankrupted by two disastrous PFI contracts ).
Alan Milburn has now, as widely expected, been given an official role by Streeting after months of operating as a back room advisor. After two decades of lucrative work in the private sector he has become the non-executive lead at the DHSC (Department of Health and Social Care).
Most of Milburn’s same old policies are being brought back, too – but in very different circumstances. Tony Blair’s decision in 2000 to increase NHS spending as a share of GDP over ten years to move closer to the European average level of spending meant that there was some leeway for New Labour to waste money but still deliver improved performance. Increased numbers of staff and an overall halt to front line bed closures delivered results.
Now Wes Streeting is trying to replicate some of the same ‘reform’ ideas. But the context is completely different: frozen or falling NHS budgets after 14 years of austerity and the build-up of a £13.8 billion backlog in maintenance. This has left too many hospitals struggling on with crumbling buildings and clapped out equipment. Without tackling this problem Wes cannot hope to come close to the levels of performance New Labour achieved.
Milburn, as health minister and then Health Secretary, was also a leading protagonist defending the costly use of the Private Finance Initiative (PFI) to build new hospitals, originating the famous phrase that PFI was “the only game in town,” and the pithy summary “If it’s new hospitals you want, it’s PFI or bust.”
But after 20 years of PFI projects in the NHS, plans for any further schemes ground to a halt after the abrupt financial collapse of one of the major companies in PFI, Carillion, in January 2018. This left two major PFI-funded hospitals, Royal Liverpool and Midland Metropolitan in Smethwick partially built, but with serious construction flaws. Tory Chancellor Philip Hammond stated there would be no further PFI deals – and that has remained the case.
Labour’s manifesto surprisingly committed to take up Boris Johnson’s cynical 2019 promise to build 40 new hospitals. Given the lack of NHS finance to do anything of the sort, there were increased suspicions that Labour might change course and contemplate another round of PFI, generating profits for construction firms and financiers.
On June 11 speculation was increased as NHS England CEO Sir Jim Mackey effectively called for a revival of PFI, in suggesting a mechanism to allow private finance investment into health service infrastructure within months. He actually argued for the government to “introduce an off–balance sheet capital investment mechanism”.
Campaigners and MPs were on edge waiting to see whether this was an indication of renewed government interest in PFI: but it seems Mackey is the odd one out.
A new Treasury report has squashed any thought of a revival of PFI for any major NHS projects.
It accepts that the government might explore the feasibility of using new PPP [Public-Private Partnership] models for taxpayer-funded projects “in very limited circumstances where they could represent value for money.” The only NHS arena where this might be considered is “In certain types of primary and community health infrastructure.”
However the Treasury stresses that “The design and development of future PPP models will move on from the failures of PFI and PF2,” and points out the scale of the problems still lingering:
“There are currently 665 PFI and PF2 projects with remaining payments to the private sector of £136 billion, of which c.50% are set to expire in the next decade.”
As a result: “The government will not reintroduce PFI or PF2. Significant lessons have been learned from the past and any new PPP model would reflect several improvements and be developed in consultation with industry.”
So amid all of the debris of the past, it seems we may be spared another bout of PFI, thanks not to Wes Streeting, but to the tight-fisted Treasury. Of course given recent form the 10-year plan could yet be redrafted again – or even postponed – before the HSJ’s expected publication date of July 3.
Dear Reader,
If you like our content please support our campaigning journalism to protect health care for all.
Our goal is to inform people, hold our politicians to account and help to build change through evidence based ideas.
Everyone should have access to comprehensive healthcare, but our NHS needs support. You can help us to continue to counter bad policy, battle neglect of the NHS and correct dangerous mis-infomation.
Supporters of the NHS are crucial in sustaining our health service and with your help we will be able to engage more people in securing its future.
Please donate to help support our campaigning NHS research and journalism.
The leading health management journal, the Health Service Journal, has now seen a draft of Labour’s long-awaited 10-year Plan for the NHS, and pronounced it “a mess.” We might have guessed as much from the shambolic changes of direction and contradictory announcements in the last few months.
But what is especially troubling is that despite all their talk about “reform” Labour seems to have come up with no really new ideas during the last 15 years: instead almost everything they are doing or trying to do is a repeat of past policies from 2000-2010.
The Urgent and Emergency Care Plan, published early in June, commits to publish ‘league tables’ on performance, supposedly “to drive improved transparency and public accountability and also to encourage less effective systems to work more closely with high performing systems to accelerate improvement.”
League tables, coupled with macho phrases such as “zero tolerance for failure” were first brought back out from cold storage last November in a speech to NHS Providers by Health and Social Care secretary Wes Streeting.
Identifying and rewarding star performers while pillorying failing trusts was indeed tried by New Labour. A controversial “star ratings” system was one of a raft of market-style ‘reforms’ driven on by Alan Milburn in his spell as Health Secretary from 1999 to 2003, and picked up and continued by several of his successors. The star ratings were published from 2000 to 2005.
Other New Labour “reforms” driven by Milburn included the creation of semi-autonomous Foundation Trusts, the development of privately-run “Diagnostic and Treatment Centres” (later expanded and rebranded as Independent Sector Treatment Centres), and the replacement of block contracts for paying NHS hospitals with “payment by results,” which opened up an increasing flow of NHS funds out of the NHS and in to the private sector.
All of these are linked by the irrational conviction – again linking back to the 2000s – that a competitive market, rather than planning, and increased private provision rather than an expanded NHS were the way to improve health care. And although we are a long way from the extremes of New Labour’s market mania from 2005 onwards, the recently published “Model Integrated Care Board Blueprint” explicitly discusses the steps to “shape the local market”.
We should also remember Labour’s far-reaching “partnership” agreement with the private sector signed in January. It goes much further than the Tory government’s 2022 Health and Care Act by committing to include the private sector in local NHS planning and decision-making – something Tory ministers were willing to rule out.
Many of these old ideas are now being revived by Wes Streeting, who has surrounded himself with a Blairite team of advisors, seems to have no new ideas of his own, and seems locked in to repeating past failures.
Back in 2003 the star ratings system was used to decide which trusts could apply for Foundation Trust status: only the top-rated, 3-star trusts – already the wealthiest and best-performing – were eligible.
Streeting now claims that the introduction of foundation trusts was “one of the most successful NHS reforms in the last 25 years,” and argues that earned autonomy, greater responsibility for boards and the freedom to innovate is “still the best way to drive up standards.”
He has promised the 10-Year Plan will reintroduce “incentives, flexibilities, and freedom from central control” for local providers delivering a quality service, restoring powers to the best-performing foundation trusts.
But are FTs the success Streeting claims? Research published in 2011 by York University academics, found NO evidence of any substantial positive “FT effect”:
“the issue perhaps is … whether the extra costs involved in setting up and regulating FTs are justified. […] although there are … examples of FTs introducing novel treatment paths and service arrangements, … it is difficult to know whether the Trusts would have been able to make such changes anyway. There is also limited robust research evidence to date on the degree to which the broader aims of “social ownership” as expressed by the government at the launch of FTs have been achieved, especially in terms of accountability to local communities.”
In 2015, the Health Foundation came to a similar conclusion, emphasising how similar was the performance of NHS trusts and foundations:
“… across a number of quality measures, Foundation Trusts and NHS trusts perform similarly. For the proportion of patients receiving harm free care NHS trusts seem to outperform FTs.”
Tory Health Secretary Andrew Lansley was an enthusiastic supporter of FTs. The controversial Health and Social Care Act which formed the basis of his massive NHS reorganisation in 2012 gave FTs a new freedom: to grow their private patient income to almost half their total income. According to the HSJ’s leaked draft of the 10-year Plan that freedom would remain in place.
Indeed FTs would be freer still: they would no longer be required to have governors, or representatives for staff and the local public: and they would be able to manage the entire healthcare budget for a local population, becoming “integrated health organisations” or “IHOs”.
Despite Lansley’s enthusiasm the austerity policies of the Cameron government began to squeeze FTs as well as NHS trusts. A King’s Fund blog in 2016 noted the continued dependence of FTs on government and NHS support, and argued the FTs were: “independent corporations on paper, yet entirely dependent on the state in reality – for funding, capital investment and bailouts when things went wrong.” And as the financial situation got worse:
“Cash-strapped commissioners withheld funding. And large swathes of the foundation trust sector found themselves in breach of Monitor’s [the regulator] financial rules and subject to intervention, not through any fault of their own in many cases, but because of the gap between funding and the real cost of services.”
Milburn had wanted FT “freedoms” to include freedom from any accountability to the NHS or to ministers; freedom to borrow on the money markets, freedom to set pay levels for all of their staff, and freedom to retain surpluses even if the rest of the surrounding NHS was drowning in deficits. But he could not win support for these ideas from his own party, which voted decisively to reject foundation trusts at its 2003 conference.
Gordon Brown as Chancellor had in any case immediately vetoed the freedom to borrow.
The theoretical freedom of FTs to set local pay for their staff meant potentially overriding the new national Agenda for Change pay reforms then being put in place to cover all staff except doctors and very senior managers. That freedom was eventually largely discarded as impractical by most foundation trusts after a few experiments consumed huge amounts of management time and brought conflict with the unions.
In the end none of the proposed freedoms survived the ups and downs of political and financial pressures after the first foundation trusts were established in 2004. Some key freedoms had already been sacrificed in the hard fought battle to get Milburn’s legislation establishing foundations through parliament, in the teeth of strong opposition from organisations representing almost all sections of health workers, from non-health trade unions, patients’ groups and many of the Labour back bench MPs who were not on the ministerial payroll.
The star ratings were little more than a fig leaf to disguise the funnelling of extra cash to the trusts which were already the best equipped and the strongest financially, leaving the weaker trusts to struggle by, or face heavy-handed intervention.
The star ratings were criticised by the Royal Statistical Society (which warned that they “demoralise and antagonise” staff and damage the health service as a whole”), and by Dr Foster, an organisation which compared the levels of staffing and other aspects of hospitals: Dr Foster pointed out that none of the key targets for achieving 3-star status was clinical.
Instead the star rating focus was on waiting times, cleanliness and financial balance sheets. Hospitals which fell foul of these measures would receive no stars, irrespective of the quality of care provided by their doctors and professional staff.
Trusts which passed this hurdle were then compared with others on another 28 performance indicators, only eight of which took clinical care into account, and only one measured levels of mortality: most were concerned with waiting times, patient satisfaction surveys and management targets on sickness absence.
Dr Foster’s investigation revealed that mortality rates in some three star hospitals were worse than in some with no stars: 13 apparently top flight hospitals had above average mortality, the worst being Walsall Hospitals (26 per cent above average), Essex Rivers (15 per cent above) and Basildon and Thurrock (12 percent above).
Another major flaw with the star ratings and with establishing Foundation Trusts as an elite, privileged group amongst NHS providers was that it could encourage trusts – most notably Mid Staffordshire Hospitals – to make swift and massive cutbacks in staffing to wipe out long-standing deficits and win FT status.
The Mid Staffordshire trust bosses decided the quickest way to cut £10m from annual spending was to sack more highly-paid clinical staff. So they axed nursing and medical staff, with disastrous impact on patient care, creating a scandal that was eventually later exposed by local journalist Shaun Lintern, culminating in the Francis Report in 2013.
It seems likely that a return of League Tables as a means to compare acute trusts in very different circumstances in 2025 will run into similar problems.
In his June 12 speech to the NHS Confed Expo conference Streeting insisted trusts which fail to balance the books may be “placed into administration,” with the Department of Health and Social Care stepping in to replace the leadership, offering bonuses to attract successful bosses to take over.
But the numbers of trusts facing severe financial problems is so great it’s unlikely there will be enough suitable people to take over.
Streeting also seems quite oblivious to the wretched record of such policies, especially the ‘failure regime’, installing a Trust Special Administrator, which was passed in to law by New Labour in 2009 and amended in 2012, but proved a costly failure on both occasions it has been used (to deal with the Mid Staffordshire Hospitals Foundation Trust, and to break up the South London Hospitals Trust, which had been bankrupted by two disastrous PFI contracts ).
Alan Milburn has now, as widely expected, been given an official role by Streeting after months of operating as a back room advisor. After two decades of lucrative work in the private sector he has become the non-executive lead at the DHSC (Department of Health and Social Care).
Most of Milburn’s same old policies are being brought back, too – but in very different circumstances. Tony Blair’s decision in 2000 to increase NHS spending as a share of GDP over ten years to move closer to the European average level of spending meant that there was some leeway for New Labour to waste money but still deliver improved performance. Increased numbers of staff and an overall halt to front line bed closures delivered results.
Now Wes Streeting is trying to replicate some of the same ‘reform’ ideas. But the context is completely different: frozen or falling NHS budgets after 14 years of austerity and the build-up of a £13.8 billion backlog in maintenance. This has left too many hospitals struggling on with crumbling buildings and clapped out equipment. Without tackling this problem Wes cannot hope to come close to the levels of performance New Labour achieved.
Milburn, as health minister and then Health Secretary, was also a leading protagonist defending the costly use of the Private Finance Initiative (PFI) to build new hospitals, originating the famous phrase that PFI was “the only game in town,” and the pithy summary “If it’s new hospitals you want, it’s PFI or bust.”
But after 20 years of PFI projects in the NHS, plans for any further schemes ground to a halt after the abrupt financial collapse of one of the major companies in PFI, Carillion, in January 2018. This left two major PFI-funded hospitals, Royal Liverpool and Midland Metropolitan in Smethwick partially built, but with serious construction flaws. Tory Chancellor Philip Hammond stated there would be no further PFI deals – and that has remained the case.
Labour’s manifesto surprisingly committed to take up Boris Johnson’s cynical 2019 promise to build 40 new hospitals. Given the lack of NHS finance to do anything of the sort, there were increased suspicions that Labour might change course and contemplate another round of PFI, generating profits for construction firms and financiers.
On June 11 speculation was increased as NHS England CEO Sir Jim Mackey effectively called for a revival of PFI, in suggesting a mechanism to allow private finance investment into health service infrastructure within months. He actually argued for the government to “introduce an off–balance sheet capital investment mechanism”.
Campaigners and MPs were on edge waiting to see whether this was an indication of renewed government interest in PFI: but it seems Mackey is the odd one out.
A new Treasury report has squashed any thought of a revival of PFI for any major NHS projects.
It accepts that the government might explore the feasibility of using new PPP [Public-Private Partnership] models for taxpayer-funded projects “in very limited circumstances where they could represent value for money.” The only NHS arena where this might be considered is “In certain types of primary and community health infrastructure.”
However the Treasury stresses that “The design and development of future PPP models will move on from the failures of PFI and PF2,” and points out the scale of the problems still lingering:
“There are currently 665 PFI and PF2 projects with remaining payments to the private sector of £136 billion, of which c.50% are set to expire in the next decade.”
As a result: “The government will not reintroduce PFI or PF2. Significant lessons have been learned from the past and any new PPP model would reflect several improvements and be developed in consultation with industry.”
So amid all of the debris of the past, it seems we may be spared another bout of PFI, thanks not to Wes Streeting, but to the tight-fisted Treasury. Of course given recent form the 10-year plan could yet be redrafted again – or even postponed – before the HSJ’s expected publication date of July 3.
Dear Reader,
If you like our content please support our campaigning journalism to protect health care for all.
Our goal is to inform people, hold our politicians to account and help to build change through evidence based ideas.
Everyone should have access to comprehensive healthcare, but our NHS needs support. You can help us to continue to counter bad policy, battle neglect of the NHS and correct dangerous mis-infomation.
Supporters of the NHS are crucial in sustaining our health service and with your help we will be able to engage more people in securing its future.
Please donate to help support our campaigning NHS research and journalism.
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