Will Labour’s lofty NHS plans fall down a cash black hole?

Labour’s NHS plans sound interesting at first view. But can they survive the pressures on the health service?

Labour’s NHS plans sound interesting at first view. But can they survive the pressures on the health service?

With the final party conference season before next May’s general election underway, the main political parties are treating their gatherings as a pitch to the voters.

At its jamboree in Manchester, Labour is especially keen to flaunt its government-in-waiting credentials, with a slew of announcements designed to appeal to key voter groups while simultaneously showing it has learnt from the ‘mistakes’ of the Blair and Brown years.

So we’ve seen shadow chancellor Ed Balls promising a new £8 minimum wage for the low-paid at the same time as a real-terms cut to Child Benefit, with the £400m savings going to plug a (tiny) part of Britain’s £75bn budget deficit.

But we’ll have to wait until tomorrow [Wednesday] for shadow health secretary Andy Burnham’s proposals for the NHS. Not that the overall plan is exactly a secret: Burnham has been banging on for ages about his plan for an integrated ‘National Health and Care Service’. What this will do to the familiar acronym only time will tell, but NHCS doesn’t quite have the same ring.

Speaking through the unlikely mouthpiece of the Sunday Express, Burnham gave us a glimpse of his vision last weekend:

“We are going to set out the basis of a 10-year plan for the NHS,” he said. “It is a plan to bring social care into the NHS and create an NHS that is ready for the ageing society in the 21st century.”

The reasoning goes that the NHS is steadily being overwhelmed by the growing tide of octo and nonagenarians coming into hospital and staying there for want of anywhere else to be discharged to.

This is having a knock-on effect in all sorts of other areas, from A&E waits to cancer operations.

At the same time, families are confronted with walls of bureaucracy from both the NHS and local councils as they try desperately to get their loved-ones into an appropriate care setting following a hospital stay.

No-one could doubt that Burnham’s aspirations are sincere and that the need for better integration is acute and growing. The aim to have families guided through the process by a single coordinator under an NHS umbrella would seem to have much merit. It could certainly save a heck of a lot of stress and worry.

But, as ever, the best-laid plans may run into that perennial stumbling block – cash. Or, more precisely, the lack therof.

Last week we learnt that NHS England has run up a £500million deficit in the first few months of this year.

Hospitals up and down the country are in the red – including a majority (86 out of 147) of the much-vaunted foundation trusts, which have greater autonomy from official control.

The parlous state of the health service’s finances led the National Health Action Party (NHA), a doctors’ lobby group, to call on Labour to inject extra emergency funding into the NHS to avert ‘total crisis’ if it wins next year.

Ed Milliband has responded by saying that the proceeds of a planned ‘mansion tax’ on homes worth more than £2million will be ploughed back into the NHS. Quoting the Institute of Fiscal Studies (IFS), Labour claims this could raise £1.7bn per year – a figure which is likely to be disputed by opponents.

In any case, that is but a drop in the ocean next to the feared £30bn black hole in its finances NHS England has said will emerge by 2020 “if services continue to be delivered in the same way as now”.

There is another problem with the Burnham plan. NHS staff are still smarting from the wholesale reorganisation brought about by the Coalition government, which was opposed by many.

Burnham’s scheme entails a possibly even greater re-jigging of the system, as health and social care budgets, currently split across health and local government, are spliced together. Will this mean unified health and care departments? Where will they sit – within CCGs, acute trusts, or council offices? Currently there is a distinct lack of detail.

Nonetheless, Burnham claims that the move would in fact save money – about £4.5bn (over what timeframe is not clear) – but presumably not in the short-term.

Added to all of this is Burnham’s intention to make the NHS the ‘preferred provider’ for health service tenders once more, in a bid to shut out the private sector. While this may play well with the floor in Manchester – and possibly among large swathes of the NHS – the deliverability of this pledge is fraught with difficulty.

Simon Stevens, the Chief Executive of NHS England, has already expressed his doubts that this could be implemented due to European procurement regulations. Labour has rejected this, saying it could act simply by repealing regulations enacted by the current coalition government.

But there’s also the question of efficiency. If NHS England believes that the bulk of its problem is the way services are delivered now in response to demographic changes, how will shutting out potentially cost-saving innovation help? One would hope that Labour would carry out a full and proper audit of whether private providers are helping to deliver high-quality NHS services in a more cost-effective way, before introducing an effective ban.

Labour’s NHS plans certainly sound interesting at first view. But whether they can survive the pressures on the health service remains to be seen.

Of course, it may all be hypothetical – there is still the small matter of an election to win…

James Tout works for Journalista

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