The NHS and institutional reform
There was perpetual revolution in the late 1990s and 2000s and its effect has left a mark, but politicians and officials should remember that change can be good or bad
Last week, the conclusions of the independent investigation of NHS England by Professor Lord Darzi of Denham were published. Darzi, an internationally renowned surgeon, academic and former Labour health minister, had been commissioned by the incoming health and social care secretary, Wes Streeting, to examine the state of the health service within a week of taking office: Streeting asked for a “raw and honest assessment” which would inform the government’s 10-year plan for NHS reform. Darzi was to report in September, making the review a short one designed for diagnosis rather than prescription of cure, and this was reflected in the relatively narrow terms of reference.
As has been extensively reported, Darzi’s report was clear, explicit and devastating. He said starkly that “the National Health Service is in serious trouble”, describing burgeoning waiting lists and times, appalling standards of cancer care, low productivity, long-term capital under-investment in health infrastructure, disempowered patients and disengaged staff.
[The NHS] continues to struggle with the aftershocks of the pandemic. Its managerial capacity and capability have been degraded, and the trust and goodwill of many frontline staff has been lost. The service has been chronically weakened by a lack of capital investment which has lagged other similar countries by tens of billions of pounds. All of this has occurred while the demands placed upon the health service have grown as the nation’s health has deteriorated.
The government was quick to seize on the gravity of the situation which Darzi reported, and pointed the finger of blame firmly at the previous government. The prime minister, Sir Keir Starmer, made a speech at the health and social care think tank the King’s Fund the same day, accusing the Conservatives of presiding over “a lost decade for our NHS”. One of the main messages the prime minister delivered was that there had to be reform of the health service hand-in-hand with any additional investment. “It’s reform or die,” he said bluntly, and the government is clearly laying the groundwork for a potential conflict for vested interests in the NHS, especially trade unions.
Of course to an extent Starmer is right. Setting aside the historic under-investment, which he valued at £37 billion, Darzi was careful to point out that the problems in the NHS would not be resolved simply by spending more money. He noted that “the NHS accounted for 43 per cent of all-departmental government spending in 2023, up from 26 per cent in 1998-99”. Overall health spending in England as a share of gross domestic product has been roughly in line with peer countries, at 10.9 per cent compared with the OECD average of 9.1 per cent in 2023. In other words, we are spending comparable amounts of money to other countries but producing worse outcomes, which indicates there is something else wrong.
One of the most frequent arguments in NHS reform is that there should not be major institutional change. Lord Darzi’s review concluded that “a top-down reorganisation of NHS England and Integrated Care Boards is neither necessary nor desirable”, though he qualified this:
There is more work to be done to clarify roles and accountabilities, ensure the right balance of management resources in different parts of the structure, and strengthen key processes such as capital approvals.
This caution was enthusiastically endorsed by Professor Rich Withnall, chief executive officer of the Faculty of Medical Leadership and Management, noting that “while the report is damning in its assessment of previous reorganisations, it calls for no further tinkering—which will be welcomed at the clinical front line”. Similarly, Andy Bell, chief executive of the Centre for Mental Health, argued that “the NHS itself is going to have to change” but “not with another structural reorganisation but with real change in the way it works for and with people”.
A week after Lord Darzi’s investigation was published, the conservative think tank Policy Exchange issued a report entitled Just About Managing: The Role of Effective Management and Leadership in Improving NHS Performance and Productivity. Written by John Power, Dr Sean Phillips and Stuart Carroll, it recommended extensive changes to the way in which the health service is managed, and on that basis generated instant pushback. Matthew Taylor, CEO of the NHS Confederation, a membership organisation for healthcare providers of all kinds, said “the last thing the NHS needs right now is the kind of top-down reorganisation that it recommends”.
There is, then, a sense of reorganisation as a spectre, a dreaded imposition to which politicians too often resort. This stems from solid and understandable experiential reasons which go back nearly 30 years. From the mid-1990s through most of the 2000s—essentially the last days of John Major’s Conservative government and then most of the Labour administration which followed it—there was a grinding and unsettling sense of permanent revolution. In the 15 years between 1995 and 2010, there were seven different health secretaries, of whom Andy Burnham (2009-10) served only 11 months while the longest tenure was nearly four years for Alan Milburn (1999-2003).
In truth, most of them were indifferent or ineffectual. Stephen Dorrell (1995-97) arrived with a degree of goodwill, having replaced the unpopular Virginia Bottomley, and won respect for his willingness to engage with medical professionals and listen to their concerns. He also resolved problems facing out-of-hours services in general practice. Frank Dobson (1997-99) was committed and could be likeable but lacked political weight and was wedded to an increasingly old-fashioned sense of what the NHS should look like. I’ve said many times before and will continue to say that Alan Milburn was by the far the most effective and capable health secretary of the last 30 years: he could be difficult and demanding, but he had a passionate vision of a health service focused on patient choice and empowerment and was determined to deliver it. He was the only secretary of state to grasp how fundamentally the NHS could and should change and had both the ability and the heft in Whitehall to move the needle, being largely responsible for the radical NHS Plan of 2000.
In many ways, these are regarded as some of the NHS’s golden years: health spending rose from £79 billion in 1996-97 to £167 billion in 2009-10, and from 4.6 per cent of GDP to 7.5 per cent. But this period is also haunted both for clinicians who have long memories and for the NHS’s collective unconscious. There was new legislation, major restructuring or substantial managerial reform in 1995, 1997, 1998, 2000, 2001, 2002, 2003, 2004, 2006 and 2007 (and then in 2012 and 2013). Regional health authorities became health authorities and regional offices of the NHS Executive then strategic health authorities until they were replaced by clinical commissioning groups and Public Health England. Primary care groups became primary care trusts and were also folded into CCGs. In addition there were eight major pieces of legislation dealing with the way the NHS worked:
The Health Authorities Act 1995
The Health and Social Care Act 2001
The National Health Service Reform and Health Care Professions Act 2002
The Health and Social Care (Community Health and Standards) Act 2003
The National Health Service Act 2006
The Mental Health Act 2007
The Health and Social Care Act 2008
The Health and Social Care Act 2012
In retrospect, this torrent of legislation and structural reform was insanity, but in part it reflected politicians struggling to reconceptualise the provision of healthcare against a background of an ageing population, more expensive and elaborate treatment and increasing technology. For anyone who worked in the NHS, however, let alone for patients, it was a merry-go-round which made solid, incremental improvement almost impossible and forever risked advances which had been made.
The only point I want to make here is this one. The pace of change and constant shifts of emphasis of the late 1990s and 2000s were poorly planned and disruptive to a degree that was counter-productive, and to that extent they should serve as a cautionary tale for aspirant radicals who want to shake up the NHS. Lord Darzi is right to warn against a “top-down reorganisation”, though how far the government will follow that advice is uncertain: Streeting sent a clear message on his appointment that he expected the Department of Health and Social Care and NHS England to work together more closely, while former health secretary Jeremy Hunt (currently shadow chancellor of the Exchequer) has endorsed the Policy Exchange report above and wants to see NHS England scrapped as a commissioning body and replaced by a management and oversight board within the department.
As the government works on its 10-year plan for the NHS, which it expects to publish in the spring of 2025, it should learn all of these lessons from the past and absorb the findings of the Darzi review. But it must not fall into the trap of thinking that, because structural changes in the past have been too frequent, ineffective or poorly managed, necessarily all structural change is bad. Whether a radical overhaul of the organisation of healthcare is needed or not is uncertain. The government at least seems to understand how profound changes will have to be, though, as I wrote last week in The Spectator, I am by no means convinced that either Sir Keir Starmer or Wes Streeting has the ability to undertake the kind of service transformation that will be necessary, and they are both too easily dazzled by the word “reform” and the way that drawing the battle lines for conflict with the trade unions makes them feel radical and pioneering.
There is good change and bad change, and it is sometimes hard to tell them apart until some time has elapsed. But the existence of bad change doesn’t mean that the good is unnecessary or impossible. Streeting and his fellow ministers and advisers should be cautious, and look carefully at institutional change, but it should not be off the table simply because it did not work last time.