Deborah Orr: What's gone wrong with the NHS?

Patricia Hewitt and her chums are thought to make bean-counting look like a form of hedonism

So there I was at my GP's surgery, undergoing a bit of a mental struggle in deciding whether I needed a new tetanus jab for a trip to Africa. I remembered I'd had one before going to Mexico in 1996, which meant that my 10-year immunity was over. So I should have one. Definitely.

But then I recalled a tranche of jabs about five years ago, when I'd been dropped off at the local hospital by the police for an Aids test (alongside various other unwelcome attentions), because I'd found a junkie burglar in my home and she'd bitten my hands as I engaged her in woman-to-woman combat. Did I have a tetanus injection then? Or didn't I?

The nurse was unmoved by my excuses about unusual circumstances, events best forgotten for sanity's sake, and adrenaline-soaked trauma. Bedside manner be damned. She merely displayed immense irritation. "Well, I've opened the ampoule now," she cried in horror, "and they cost a lot of money!"

I have to admit I was impressed. Previous attempts to engage NHS practitioners in a spot of cost-benefit analysis have always been shut down with an airy dismissal of the concept that such matters should ever be considered. This appears to place me in something of a minority, as what seems like the entire nation bands together in the belief that all attempts to alter any aspect of the NHS can only be a sinister attempt at evil money-hoarding.

The latest example is widespread distrust of the idea that specialist A&E centres would be better at saving lives than general casualty units. It's hard to see how this sensible idea would actually save money at all, especially in the short-term. But it's the number one concern of most bodies who have commented on it.

It's bizarre, when you think about it, this overwhelming distrust of the Government's financial motives in dealing with any aspect of the NHS. Viewed as the most pettifogging cost-cutters to have hit the service in the 60 years of its life, Patricia Hewitt and her chums in the Department of Health are considered to make bean-counting look like a form of hedonism. Instead, it ought to be borne in mind, the opposite is true.

Labour has lavished cash on the NHS. Back in 2000, Alan Milburn announced a 10-year plan that promised 7,000 new beds, 100 new hospitals, 7,500 more consultants, 2,000 extra general medical practitioners, 20,000 extra nurses and much else besides. The really amazing thing about this bonanza? It hadn't been costed out in any meaningful way at all.

Little details like that weren't addressed at all for another couple of years, when the Treasury-commissioned Wanless Report recommended a £40bn increase in NHS spending. The Department of Health resource budget was £45bn in 2000-01. In 2004-05 it was £67bn, and next year it's expected to be £87bn. Interestingly, Wanless is presently conducting an independent inquiry into how the money has been spent. Whitehall showed no interest in conducting this rather important exercise, and it's being carried out instead under the auspices of health charity the King's Fund.

Until then, we all just have to scratch our heads and wonder in anti-awe how the hell this vast injection of cash has resulted in a gross overspend this year reckoned to be £1.3bn, while local services are being threatened with closure all over the place.

Some stuff we know about already. The Government admits it was caught out when the re-negotiation of GPs contracts has resulted in them earning salaries averaging £106,000. The Opposition likewise suffered a rare burst of honesty when it blurted out that its own Private Finance Initiatives were racking up vast and unnecessary costs to the taxpayer. And few deny that a lot of money has been spent on improving infrastructure and equipment that has rotted in the years of Conservative under-investment.

But it still doesn't add up. While the deficit figure comes down to £512m after surpluses are taken into account, this certainly does not tell the real, sad story. Budgets are being massaged in various ways. Strategic Health Authorities are contributing most in terms of surplus, and there are bitter accusations that this has been achieved through the withholding of cash essential to professional development training (ear-marked but not ring-fenced). It also seems certain that some Primary Care Trusts achieving surpluses are including non-recurrent income such as the selling of assets in their accounts.

But this is the least of it. Damaging cuts are being made as well, and the Department of Health does itself no favours by trying to flannel this fact. Recent graduates in important but non-essential disciplines - like physiotherapy - cannot find jobs, as it is in their professions that the first cuts are made. It is the clear evidence of decline in local services and quality of patient care in hospitals and trusts running deficits that creates the public distrust that is making Hewitt so worried about the Government's ability to "sell reform", even though in many ways the service has vastly improved under its watch.

It is certain major aspects of the "reform" itself that are at fault, and part of the Government's inability to realise this is embedded in its wounded feeling that it is being misunderstood. Labour is characterised by critics as being more in love with creating an NHS market than the Tories were. Yet the real problem is that in some important ways those limited efforts it has made to stick to the 1997 pledge that it would "abolish" the Thatcher-introduced internal market have simply backfired.

The 303 Primary Care Trusts that Labour introduced were envisaged as organisations that would command and control the new entrepreneurial freedoms many with management flair had seized, fostering their innovations and driving up standards among the providers that performed less well. It hasn't worked that way.

In an acknowledgement that the Trusts simply didn't have enough clout to achieve much leverage with the more financially aggressive health providers, or throw much influence over the less well-placed ones, the Government has reformed again, creating fewer, larger, more powerful Trusts.

Again, the propensity for creating policy on the hoof leaves people feeling that nothing is left to bed down. Demoralisation, and a diminishment of the public service ethos ensues among health-care workers, while those in NHS management who have developed a taste for the cut and thrust of political power-play (and easy money) find that any number of the private consultancies the Government turns to when deficits loom are more than willing to recruit them. It's privatisation, for sure, but the really mad thing is that one over-estimates the Government in suggesting that it is intentional.

d.orr@independent.co.uk