More MS news articles for April 2002

NHS to receive an extra £40bn over next five years

BMJ 2002;324:993 ( 27 April )
Wendy Moore, London

Healthcare leaders have enthusiastically welcomed the unprecedented £40bn ($58bn; 65bn), five year investment plan for the NHS announced in the Budget last week, while also sounding notes of caution over elements of the reforms that are tied to the money.

Chancellor Gordon Brown's Budget outlined annual rises of 7.4% above inflation for the NHS over the next five years, taking total UK healthcare spending from £65.4bn in 2002-3 to £105.6bn in 2007-8. The total 61% boost, which will be paid for by a 1% rise in national insurance, is in line with increases recommended by the report on health resources by Derek Wanless (see p 998).

The extra investment will increase the UK health bill from 7.7% to 9.4% of gross domestic product by 2008matching the EU average that Prime Minister Tony Blair pledged two years ago that the UK would meet (BMJ 2000;320:205).

The health secretary, Alan Milburn, immediately translated the money into plans for an extra 80000 staff, 40 new hospitals, 10000 more beds, and 500 primary care centres. The Treasury made clear, however, that the NHS cash lifeline is conditional on radical reforms in working practices, patients' freedoms, and changes to the money flow that hark back to the Thatcherite internal market. Involvement of the private sector will continue to expand.

Mr Milburn said the extra funds would pay for 15000 more GPs and consultants, 35000 more nurses, and 30000 more therapists by 2008. Waiting times for operations would fall from the current maximum, 15 months, to six months by 2005 and three months by 2008, with an average wait of just six weeks.

The maximum wait for an outpatient's appointment would be three months by 2005, while waits in casualty would be cut to a maximum four hourswith an average of 75 minutesby 2004.

But Mr Milburn emphasised: "Investment in the NHS must be accompanied by changes in the way the NHS works. Ours is not an unconditional offer."

Bold reforms, outlined in a Department of Health paper, Delivering the NHS Plan, include a new independent inspectorate, the Commission for Healthcare Audit and Inspection, which will check that extra investment leads to genuine improvements in patient care.

The new body will combine the role of the Commission for Health Improvement, the role of the Audit Commission in its NHS related work, and the private health sector inspection role of the new National Care Standards Commission. The new body, effectively a strengthened and expanded Commission for Health Improvement, will inspect all hospitals, license private health provision, conduct value for money audits, publish star ratings for hospitals, and recommend special measures when it isolates problems. Headed by a new chief inspector of health care, it will report direct to parliament.

More devolution of power is promised, with a slimmed down Department of Health. Instead of top-down targets, hospitals will have to work for their money through a new system of "payment by results." This regimenot unlike the internal marketwill mean block contracts being replaced by payment linked to activity, with providers losing money if they fail to deliver and gaining bonuses if they treat more patients. Contracts will be set according to a fixed tariff of prices.

Patient choice will be extended, with people being offered a choice of where and when they are treated. Private operators from abroad will be invited to set up shop in the United Kingdom, either on NHS or freestanding premises.

The paper also promises "fundamental" changes to end "1940s employment practices." This will involve new pay systems with incentives for breaking traditional demarcation lines between jobs; new contracts for doctors, with higher pay rates for those contributing most; and more flexibility between professions to free up doctors' and nurses' time.

Legislation is promised to make local authorities liable for hospital bed blocking costs.

The Conservatives immediately condemned the budget as "more talk and more taxes, with no change and no difference." Tory leader Iain Duncan Smith accused Labour of breaking its promise not to raise taxes. He added that despite the government already increasing NHS funds, waiting lists had risen, and cancer survival rates were among the worst in Europe.

Initial euphoria in the NHS over the dramatic funding boost has been tinged with concern at some of the detail in the reforms.

The King's Fund welcomed the extra cash but warned that introducing bed blocking penalties for local councils might lead to reduced consumer choice of social care.

Leader of the BMA, Dr Ian Bogle, described the new funds as a "historic watershed" for the NHS. He welcomed the new inspectorate, which would streamline the currently confusing system. But he too raised worries that the threat of penalties on councils could sour relations between doctors and social workers.

Delivering the NHS Plan is available at