Mad rush to save the NHS from disaster

As the Health Bill lurched towards crisis, a police escort whisked Nick Clegg to a showdown with Andrew Lansley. But, as Nicholas Timmins reports in the second extract from his book published by the Institute for Government and The King's Fund, the Coalition’s troubles were far from over...

Andrew Lansley was left ‘wounded’ by a brutal meeting with Nick Clegg last year (Getty Images)

On 31 March last year, just as the Health and Social Care Bill was completing its committee stage in the Commons, David Cameron and Nick Clegg called Andrew Lansley to a meeting in No 10.

So urgent was it that Clegg, who had been a trip to Washington, was brought in from the airport with a "blue light" police escort. Downing Street was in a panic about the Bill.

Its publication had alerted Liberal Democrat activists to just how different Andrew Lansley's proposals had become from those in the Coalition's "Programme for Government". The Bill had also made clear just how far the Health Secretary wanted his new economic regulator actively to "promote competition" in the NHS.

The Liberal Democrat spring conference had revolted, demanding sweeping changes. The British Medical Association, which had seen none of its objections to the White Paper taken on board, had just held a special meeting demanding the withdrawal of the legislation. It was clear that, as it stood, the Bill stood no chance of getting through the Lords without a battering.

"The opposition was just overwhelming," one Government adviser says. "We had to do something."

A clutch of officials and advisers had been called to Downing Street, but were told they needed to wait outside for 10 minutes while Cameron and Clegg sorted something out with the Health Secretary.

Those 10 minutes became closer to an hour. When the officials were finally called in, Cameron read out a form of words about how the legislation was going to be "paused". Lansley objected that not everything could be stopped. Cameron slapped him down, according to people at the meeting.

Then Lansley started to argue with Clegg. "Clegg absolutely slapped him down and said 'Andrew, the reason we are here is that you have put the ideological cart before the political horse'." One Lansley sympathiser says: "He looked like a wounded animal. It was quite sad actually." Thus was the unprecedented "pause" in the legislation born.

If it was publication of the Bill that had really raised the temperature over the NHS reforms, the question still has to be answered why the White Paper, published two years ago tomorrow, came as such a bombshell. After all, Lansley had been shadow Health Secretary for six and a half years before he took office. He had made countless speeches, and published a string of Tory policy documents about his plans to involve GPs in the commissioning of NHS care, to set up a new economic regulator, and to create a national commissioning board "to take politicians out of the day to day management of the NHS".

It was, as one Health Department official puts it, "one of the most closely pre-advertised plans in history." Yet it still came as a shock. Why?

There are four reasons. One, as outlined yesterday, is that the nature of the Coalition Government changed those plans from merely a big shift of power and accountability into a huge structural upheaval – one that involved, as Sir David Nicholson, the NHS chief executive was later to put it, a change management programme so large "that you can actually see it from space".

Second, it was never crystal clear ahead of the election that GPs were going to be required to take on commissioning, whether they liked it or not, rather than the programme starting with willing volunteers. Even now, it is not clear precisely when that decision was finally taken. Lansley himself now says in late May or early June – after the election.

Third, for a variety of reasons, the NHS had barely featured during the 2010 election campaign. And fourth because the shadow Health Secretary was debarred by the Tory campaign team, led by George Osborne, from talking about the detail of his reform plan ahead of the election.

Party polling showed that talking about "the wiring" of the NHS went down badly. Lansley says: "I can remember it being said explicitly to me that 'Our presentation will be radical reform on education and reassurance on health'. And the reassurance was about spending" – the Tory promise of spending increases for the NHS when almost every other government programme was to be heavily cut.

When the shadow Health Secretary protested that he was not being allowed to set out his stall and that might lead to trouble later, he was overruled, according to his advisers.

Less and less of the detail was spelt out the closer it got to the election. So it is perhaps unsurprising that people were surprised. As Stephen Dorrell, the Conservative former Health Secretary and now chairman of the Commons Health Select Committee puts it, the message before the election had been clear. "No top-down reorganisation …a bit more engagement from GPs…some tweaking at the edges" but no expectation "…that there was going to be an attempt to write it all out on a clean sheet of paper".

Yet here it is crucial to understand what Lansley was trying to do, however poorly he explained it at the time.

The origins of these reforms, after all, go back 20 years to the original Conservative "internal market" in the NHS back in 1991. That created "self-governing" NHS Trusts and for the first time gave GPs budgets with which to buy patient care.

The idea was that hospitals would have to compete for patients. Those that treated more would be paid more. Those who treated fewer would be paid less, the hope being that they would respond to that competitive pressure by improving their performance.

Over the next two decades, however, the application of these market-like mechanisms to the NHS went through two steps forward, one step back, and often steps right off the road before being reinvented.

Labour in 1997 first abolished GP fundholding, only later to reinvent a weaker version of it in 2005 called practice-based commissioning. NHS Trusts over the years lost many of their nominal freedoms. In 2002, however, as he moved away from Labour's early attempt to run the NHS purely by "command and control", Alan Milburn announced the creation of NHS Foundation Trusts.

These enjoy a much stronger statutory underpinning of independence than ordinary NHS Trusts ever had. Milburn and his Blairite successors as Health Secretary re-introduced patient choice, commissioned more care from the private sector, and effectively reinstated a much more sophisticated version of the Tory market-like approaches – only for that to be put to be put largely on hold once Gordon Brown became Prime Minister.

Indeed, Andy Burnham, Labour's last Health Secretary, even declared that he wanted the NHS to be its own "preferred provider" – rather than the NHS using the private or voluntary sectors.

In Lansley's eyes these reforms, which he favoured, had all ended up being "literally half-backed" because an incoming Secretary of State could, often merely by ministerial direction, change them. His aim was to fix them "permanently" in legislation, creating what one Tory special adviser describes as a "perfectly incentivised, perpetual motion machine".

One in which patient choice, provider competition, and doctors' accountability for the way resources are used would produce what the Blairites used to call a "self-improving" NHS. A service that would get better because of the incentives and pressures in place without the need for ministerial involvement.

And all this had to put in legislation so that it could only be changed by fresh legislation, not a change of Health Secretary – producing, if you like, the final NHS reorganisation ever, or at least one that would last for many a year.

It is that which partly explains why the Bill to implement the White Paper was so vast – three times longer than the founding NHS Act in 1946. It had to set out the Health Secretary's new relationship to every bit of the NHS, while 80 clauses were needed just to set up the new economic regulator.

It was the Bill's publication that turned a growing storm of opposition into a tsunami that came close to overwhelming it. The changes that resulted from "the pause" did little in practice to satisfy the most vociferous critics.

They did not stop Baroness Shirley Williams and others seeking and indeed achieving further concessions in an attempt, that may or may not prove successful, to limit the application of competition law to the NHS.

Andy Burnham, when he returned as Labour's health spokesman in November 2011, came within an ace of persuading the medical Royal Colleges to declare no support for the Bill, something that might just have halted it. And opponents found ways of using the new media – notably Twitter and Facebook – to batter the Bill in a way that no previous piece of legislation has suffered.

Despite what appeared to be a "drum roll" of opposition in January and February this year the Bill eventually made it to the statute book, the Cabinet reportedly banging the table in relief. The act had been achieved, however, at enormous political cost. The lessons that might be learnt from that will be addressed tomorrow.

Extracted from 'Never Again?' by Nicholas Timmins (published by the Institute for Government and The King's Fund). Tomorrow: Political lessons from a policy drama that was troubled from the start

In numbers: The costs of reform and numbers affected

£3bn The expected cost of implementing the reforms.

£20bn The amount the Coalition is hoping the reforms will save by 2015.

88 The majority with which the Bill passed in the House of Commons.

£60bn The amount of the NHS budget to be controlled by GPs.

27,000 The number of NHS jobs that are said to be under threat in the shake-up.

1,431,557 The total number of staff employed by the NHS at the end of 2010.