Speech by Nick Clegg MP to the King's Fund on health

1.31.13pm UTC (GMT +0000) Wed 11th Jun 2008

Speech by Nick Clegg MP to the King's Fund, Tuesday 10th June 2008

Introduction - the strengths and weaknesses of the NHS

Thank you for being here. And thanks also to the King's Fund. Your analysis, ideas and research do much to stimulate debate about the future of health services in Britain. And as the NHS celebrates its sixtieth birthday next month, the state of those services will be as hotly debated as ever.

After all, there is no other institution that commands the degree of public pride and respect as the National Health Service.

Established with the noblest of intentions, and owned by the British people themselves, it is understandable and right that the NHS enjoys such affection. Throughout the past six decades NHS services have benefited each and every British citizen. And they continue to do so.

The advancing frontiers of knowledge, science and technology have led to extraordinary medical breakthroughs in the relatively short post-war era.

From the vastly improved survival rates for premature births, through cures for multiple strains of cancer, to drugs slowing down the onset of Parkinson's Disease - our NHS has pioneered Britain's assault on ill health. And we are right to celebrate it.

Ironically, the British media tends both to stoke this sense of pride while simultaneously talking up the apparent failures in the health care system itself. Pride and cynicism - a confusing message.

But it is fair and right to highlight genuine shortcomings in any institution. And the NHS is no exception

If we don't do that, we succeed only in limiting our capacity for improving the services that it provides. Honesty is most definitely the best policy.

The Failure of Labour and the Conservatives to Grasp the Challenge

And the honest truth is that there are still improvements - big improvements - that we can and should make to health services in this country. The NHS - like other public services - has benefited from increased investment over the past decade.

The sharp recession of the early 90s - coupled with a Conservative government that was indifferent to the public sector - left Britain's schools, hospitals and police force in urgent need of more money. And since 2000, they have had it - lots of it.

The NHS itself has had an average 7% increase in its budget for each of the past six years.

But neither the public nor a growing number of health economists believe that those resources have been spent as efficiently as they should.

The reason is that increases in public spending have been accompanied by the politics of big government. More money has been given on the condition that central government decides how to spend it.

Central directions, onerous inspections and a myriad of bureaucratic targets. These have been the hallmark of New Labour governance. Micromanagement, waste and skewed priorities have been its by-products.

The NHS is a prime example - extra money but effectiveness damaged by central control. Gordon Brown likes to talk about record levels of investment in the NHS on Labour's watch. And the Government's success in reducing waiting times.

Shorter waiting times and improved recovery rates for heart disease and other illnesses are indeed a testament to extra resources, as are improved technology and, of course, increased numbers of NHS staff.

These are real achievements. But as the economy tightens Gordon Brown is finding that it is no longer possible to prime the pump with more money directed towards his priorities.

And last year's Wanless Report brought into sharp focus Labour's failure to get value for money from the sum of money that has been poured into it. A grandiose IT project running years behind schedule and billions over budget. GP and consultant contracts poorly negotiated with no clear benefit for patients. And an endless cycle of botched reorganisations that have seen PCTs established, then merged - Community Health Councils and their successors abolished.

And now the Healthcare Commission, the Commission for Social Care Inspection and the Mental Health Act Commission all merging after just a few years of existence.

Terrified by the prospect of genuine local control Labour has dictated health policy from the centre.

Local spending priorities and enormous bureaucratic reforms have been planned in Whitehall and controlled from the desk of the Secretary of State.

The result is stark mismanagement of the NHS. And a failure to play its part in tackling the multiple causes of Britain's health inequalities.

Ten years ago the infant mortality rate among the poorest families was 13% higher than that for the wealthiest. Today, it is 17% higher.

The great experiment in Big Government Solutions has failed.

But recent instructions from the government that Primary Care Trusts must implant a GP-led health centre or polyclinic in every community suggest that government policy is still heading in the same failed direction. The desire to control from the centre remains at the heart of government policy.

So the question facing politicians today is this: how can we move beyond the centralising agenda?

How can we deliver quality public services - with better, fairer outcomes - without repeating the statist errors of the past decade?

In my view, that is the greatest dilemma for progressive politicians of all parties in Britain today - how to achieve social progress through a new, decentralised state.

The Conservative Approach

The Conservatives claim they understand the failings of over-centralisation and want to do something about it. But where's the beef?

Haunted by their record in government they are frightened to take any concrete steps necessary to truly decentralise our public services. Today, they offer only cosmetic solutions to the challenges facing our public services.

Trumpeting the merits of Victorian-era charity and volunteerism in education and welfare. And hiding behind the mantra that doctors should take charge of the NHS.

Certainly clinicians should be involved in planning effective healthcare. But the plea from doctors and nurses is that they be freed up to exercise their clinical judgment - not that they should be responsible for shaping local health services.

And the establishment of a national independent board to direct the NHS is no solution. Central control would remain, and the opportunity for democratic accountability would be squandered.

In health - like so many other areas - the Cameron approach amounts to little more than a slick PR campaign intended to decontaminate the Tory brand. But that is not a series programme for government. People deserve to know what a party will do with the power it seeks. Power should be earned, not inherited.

The Liberal Democrat Approach

But there is another way. A liberal and progressive way to deliver real improvements in our public services. And it has three principles at its core.

First, that the role of the central state should be pruned back. So that Whitehall is able to concentrate and deliver on its three key functions:

Ensuring fair distribution of resources, high professional standards, and universal access to public services.

Second, the radical devolution of power and responsibility to those communities that it affects and who understand how best to use it.

And third, the empowerment of individual service users to make their own choices and chart their own path in a way that suits their individual needs.

I have already spelled out what this would mean for education.

Free schools, whereby parents and outside organisations are enabled to create, shape and manage dynamic new schools with high ambitions - under the strategic oversight of Local Authorities. And a Pupil Premium that will ensure added investment into the education of each and every child from a deprived background.

Today, I want to apply those same principles to health:

The pruning back of the central state; the devolution of power to local communities; and the empowerment of individual service users - these principles would transform a much loved but over-centralised and insufficiently accountable NHS into a devolved, responsive and accountable NHS - in short, I want to see the NHS transformed into a true People's Health Service.

Pruning Back Whitehall

So, how do we ensure that central government fulfils its responsibility to provide universal access to quality care, without micromanaging Britain's health services?

This will involve a quantum shift in thinking at the Department of Health. Whitehall must stop seeing itself as a hands on manager, and start behaving as the enabler of change. There are two key steps that I want to outline.

First, the government must move from a system of central targets towards a small number of key entitlements.

It's true that national waiting times have come down. But targets have become excessive and contradictory. They have become a political tool rather than a real means to improve patient care.

All too often, central targets actually distort clinical priorities, and undermine patient care. And often they are impossible to meet.

For example, the government has had a long-standing target of ensuring GP appointments within forty eight hours of a request. But today we are releasing figures which show that more than three in ten surgeries in England still can't meet it.

That's the same proportion as 2005 when Labour was campaigning - again - on that pledge. Furthermore, more than one in twenty can only guarantee an appointment within one or two weeks.

Instead of a myriad of targets, what I want to see is a set of entitlements for every citizen, guaranteed at the local level. These entitlements will spell out the maximum waiting time for treatments.

Where a health service provider fails to deliver those entitlements they will be legally obliged to pay for that treatment in whichever facility can provide it: public or private.

The result is guaranteed treatment for the individual patient. We know this can work. Because we've seen it work in Denmark.

Their entitlement system has driven up efficiency standards as state hospitals do everything within their power to avoid paying for treatment in the private sector.

So, for example, if we want to shorten the horrifyingly long waiting times for mental health treatment in this country without resorting to more bureaucratic targets - this is the way to do it.

Second, I want central government to close the stark gap in access to healthcare that it has allowed. Last December, the Healthcare Commission's State of Healthcare report looked at the impact of deprivation on primary care.

It found that the most deprived areas in England had almost a fifth fewer GPs per head of the population than the wealthiest areas.

While that yawning gap exists the Government neglects its central obligation to provide universal access to healthcare. And they have neglected it.

The Government's response has been a small increase in the number of GPs in poorer areas, and the creation of new GP-led health centres or polyclinics.

This is a small sticking plaster to cover a significant wound. Working in those deprived areas continues to be more challenging for the GPs who do it.

The GP payment system does not take enough account of the extra work associated with high rates of chronic disease.

And the Qualities and Outcomes Framework - which determines a third of GP income - continues to reward doctors who work in more affluent areas.

In effect, we are paying GPs less to look after patients in poorer areas. So there is little motive for GPs to stay there in the long term.

The NHS Confederation has itself drawn attention to the way in which the GP contract discriminates against GPs working in deprived communities.

This is a perverse state of affairs. And it's got to change. I want greater incentives to ensure that more GPs choose to work in deprived areas. And to encourage them to stay there.

So I want to look at ways of rewarding GPs for treating patients suffering from the greatest need. And who are at the raw end of increased health inequalities. And we can do that through a Patient Premium.

By altering the criteria of the Qualities or Outcomes Framework or attaching a greater financial premium to poorer patients we can invest more in the health of those who are most in need.

And help to close the scandalous health inequalities which shame our society. Because the state must intervene to allocate money on a fair basis.

It must intervene to guarantee equality of access in our hospitals. And it must oversee core standards and individual patient entitlements.

Then, once those building blocks are in place, the state must back off and allow the genius of grassroots innovation, diversity and experimentation to take off in providing an array of top-class public services.

Community Control

To do that, we must devolve real power and real responsibility to communities. Because a People's Health Service is one that delivers on the needs and priorities of the communities it serves.

So I want to turn remote PCTs that answer to the Secretary of State, into accountable Local Health Boards directly elected by and answerable to service users.

This isn't yet another reorganisation of the structure. It is the democratisation of the current framework. Because health policies should respond to local needs and priorities.

And health spending will be transparent and open to local democratic scrutiny. I believe that we will see real benefit from those changes.

Firstly, it will allow local priorities to be met. The Government's plan for GP-led health centres is a prime example.

It will see the central imposition of a polyclinic on every PCT, regardless of the geography, demographics and clinical needs of the area.

There is no doubt that GP-led health centres may be a good thing for many people in some communities. But the case is less clear for others - particularly in rural areas.

So the decision to have one should be made by those who know best whether it is required, how it should be coordinated and what services it should provide.

People who can assess whether one of these centres would improve access to GP care or detract from it.

Whether they would reach out to disadvantaged communities or be distant from them.

And whether they would deliver value for money or would cost more than the previous arrangements.

Today, local consultations are being rushed through and there is a clear sense that GP-led health centres will be introduced irrespective of what local people say.

Under our proposals these decisions would be made by Local Health Boards, in accordance with local opinion.

Devolution to local areas will also help to cut back on the waste that central policy-making by central government can generate.

A failure to understand local circumstances results in large-scale projects and overweening bureaucracy that are inefficient and ultimately squander resources.

When there is a lack of accountability for those misjudgements it becomes easier to make them.

So I want to do things differently. In a tighter fiscal environment, pursuing efficiency should be a top priority. By devolving power we can eliminate much of the inefficiency brought by centralisation.

Some health economists believe that savings of up to 10% of the current NHS budget could be released.

And if they are, that's money that could be reinvested in other priorities, including a transformation in Britain's mental health services by the health boards which commission them. This is a plan to create accountable, responsive and efficient health services.

To realign the needs of patients with the priorities of service providers. And to ensure that the needs of the patient take priority over the function of the system.

Individual Empowerment

But it's not enough to stop the devolution of power to the health board level.

It should go further still. We need to empower individuals too with truly personalised health services. That's what people expect. The baby boomer generation is now heading for retirement.

And their expectations of the health service will be more demanding than the generations that went before them.

Many of them have had access to more money, more opportunity and more choice. And they expect to exercise control in decision-making about their own health care too.

That's a good thing. People should have as much power over their own lives as possible.

So we must let patients navigate their own path through the health care system, not rob them of their personal choice, as much as we can.

I want to see movement towards direct payments and individual budgets for people with chronic, long-term conditions and in mental health services.

That means allowing health service users the opportunity to select their own forms of treatment anywhere within the health service - or potentially from outside it as already happens in some parts of the social care system.

By giving real choice to the individual, we can empower that patient and allow them to shape a care package for themselves - a package that suits their individual wants and needs.

So I am glad that the government has indicated that it too wants to move in this direction.

But I want it to go further. By introducing an independent network of trained Patient Advocates we can ensure that patients have access to the right information and impartial advice.

Patient Advocates would be provided via the rich network of existing voluntary advice givers, including Age Concern and the Citizens Advice Bureau. This will help patients to take informed decisions about their own care.

There's not much point being empowered to take a decision if you're not empowered with the information to make the right choices.

This is especially important given that the sheer complexity of the NHS today indirectly benefits the affluent and the educated who have the self-confidence to navigate their way through what often appears to be a labyrinthine system.

Patients Advocates would be a first step in spreading access to those who are presently confused and voiceless in the system

Conclusion

So as the NHS turns 60, there is every reason to believe that it will not just survive - but that it can adapt, evolve and deepen the esteem in which it is held by the British people.

That will require the courage to bring real change to the NHS. To prepare it for the growing demands and expectations of the people its serves.

As a Liberal Democrat my real passion - what I am about - is giving power to those who have none. So that they are empowered to flourish and fulfil their individual potential in our country. That holds true for healthcare as much as anything else.

So this is my liberal vision for the future of Britain's health service: A People's Health Service.

Where communities not governments are in the driving seat in the delivery of local health services. Where patients are empowered to take control of their own care wherever possible. Where fast and efficient treatment is guaranteed through clear individual entitlements. Where individuals come before institutions.

This is how we build our health service for the next 60 years.