David Owen: Our NHS is heading for a train crash

When Shirley Williams and Norman Tebbit are united against them, the coalition's 'reforms' must be fundamentally flawed

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Like the sailor returning to the sea, so as a doctor writing about the NHS I feel that is where "my heart will always be". Yet the NHS needs our heads not just our hearts if it is to be saved from the fatal flaws within the 353 pages of the Health and Social Care Bill.

The Conservative/Liberal Democrat coalition has no mandate for this legislation. If it were to go on the statute book in anything like its present form, over one, or at most two, decades, in England the NHS would be unrecognisable. During the general election, David Cameron defused the NHS as a vote loser for the Conservatives. He not only promised no more top-down reorganisations, but he convinced people that his heart was with the NHS after the care given to his late son.

Suddenly all that changed and, surprisingly, the Liberal Democrats too abandoned the evolutionary reforms of the past 30 years of an internal market, and instead embraced Andrew Lansley's external one – a market of price competition, with the EU's competition policy progressively poking its nose into every nook and cranny of our NHS. Furthermore, the proven democratic control of a rationed health service that maintained record levels of satisfaction among the public was to be abandoned.

Is it any wonder that nurses, doctors and health workers are up in arms? Protests are coming from politicians as diverse as Shirley Williams, a Liberal Democrat, and Norman Tebbit, a Conservative.

Shirley is trying to bash some sense into the Liberal Democrats, who should never have allowed themselves to get into the absurd position of supporting this legislation. Norman, whose wife, Margaret, was confined to a wheelchair by the Brighton IRA bomb in 1984, became chairman of a charitable fund, which helped the Nuffield Orthopaedic Centre NHS Trust. He saw the problems when a local private hospital was contracted by the NHS to help shorten waiting lists and how "unfair competition" enabled private firms to cherry-pick.

"The damage it did to the finances of Nuffield and its ability to carry out training... was quite considerable. The private sector hospital had neither any obligation nor wish to take on the more difficult and complex surgery. It had no obligation to teach the next generation of surgeons the skills they would need to deal with such work. That was all left to be done by the NHS hospital. But the NHS hospital lost income from that bread-and-butter work. It no longer had enough of the routine work for young surgeons to gain the experience needed to take on difficult and complex work, and it ran into real financial difficulties."

The strongest reason why David Cameron should change the pace and direction of these reforms is that they run completely counter to the financial demands he has placed on the NHS. These four years will represent a unique period of financial constraint for the NHS from a historic trend of real annual budget growth averaging 3.8 per cent per year, one which doubled between 2000 and 2005. We have already seen the adverse consequences for an NHS budget expected to grow by just 0.1 per cent per annum from 2010. That is the lowest rate since the 1950s.

This is also before an allowance is made to ring-fence and transfer around £1bn a year to local authorities for their new public health responsibilities. There will also be no end-of-year flexibilities transferring money to cover overspend. Additionally, the NHS is also expected to achieve £20bn of efficiency savings over the current spending review period from 2011-2014.

It is all very well for politicians to go on talking about more choice and greater decentralisation – a direction of travel that I strongly support. But there is no escaping the fact that providing choice is expensive, and it is no surprise therefore that primary care trusts (PCTs) have, in practice, been doing their utmost to limit patient choice. The interim report of the Department of Health's Cooperation and Competition Panel (CCP) has highlighted some of the strategies being pursued by PCTs in order to balance their books as the financial crunch begins to take effect. This is just a taste of what is to come.

The report found that almost half of all PCTs were taking steps to frustrate policy on competition and patient choice using "directions to GPs, activity caps, waiting list requirements, and triage and referral management systems which direct patients to particular providers; and seeking to insert provisions into contracts with providers that restrict patient choice including, for example, activity caps and reductions in the types of procedures that providers can offer...".

Health ministers are now clearly on the run, trying to introduce new wording into the Bill. "GP commissioning" is now being called "clinical commissioning", as health ministers have woken up to the reality that hospital consultants and public health doctors, not just GPs, need to be involved.

But there is still far too much fragmentation and discontinuity of care in this legislation. The other wording of "any willing provider" that would compete with the NHS is now to be called "any qualified provider". I asked the Health Minister in the House of Lords whether that wording would prevent the EU competition law being involved in the challenging of commissioning decisions. All he could say is: "We envisage it, initially, will not be subject to the EU competition law, although, of course, the situation can change over time." His words speak for themselves. They do not know what they are doing nor have they any idea of the consequences of their action.

It is a tragedy that the NHS is being subjected to this inept, ill-conceived and damaging legislation. It has to be drastically amended and given much greater scrutiny. When it comes to the House of Lords the Crossbenchers will, I believe, only give the Bill a second reading if it is referred immediately to a select committee which can sit for six months – if necessary over part of the summer – and ensure that the Bill returns to the House of Lords with detailed recommendations to transform it.

Without such sustained scrutiny and a deliberate slowing down of the procedures, the NHS is heading for a train crash and David Cameron, as the train driver, and Nick Clegg, as his guard, will forever be held responsible.

Lord Owen was leader of the SDP, 1983-90, and is a former minister of health and foreign secretary. He sits as an independent crossbencher. For Fatally Flawed, a pamphlet on NHS reforms, go to lorddavidowen.co.uk