Policy, Organisation and Finance

• Policy developments
• Organisational Change
• Finance

Frank Dobson  1997 - October 1999	Hyperlinks below go to the documents The new NHS - Modern, Dependable, Cm 3807, London, 1997 A First Class Service, Quality in the New NHS 1998	Text link
		New NHS
Alan Milburn     October 1999  - June 2003	NHS Plan (2000)	NHS Plan
	Shifting the Balance of Power (2001)	Shifting
	Delivering the NHS Plan (2002)	Delivering
	The Wanless Report	Wanless
John Reid - June 2003- May 2005	Patient Choice	Patient Choice
	Payment by Results	Payment by Results
	A patient led NHS : Delivering the NHS improvement plan NHS Operating framework for 2006/7	A patient led NHS

Patricia Hewitt -  May 2005-June 2007	Health reform in England- Update and next steps December 2005 Our Health, Our Care, Our Say - Community Care  January 2006	Next steps Our Health, Our Care, Our Say
Alan Johnson June 2007-	A Framework for Action, (Lord Darzi) NHS Review - Our NHS - Our future Lord Darzi's interim report	Our NHS, Our Future

Labour came to power in 1997.  Its changes lacked consistency and each Secretary of State imposed (with the support of Downing Street, Tony Blair or Gordon Brown) their own approach.  There was a Dobson phase (1997-1999) and a Milburn phase (1999-2003).  There were U-turns on the private sector, the extent of power in the hands of primary health care and devolution of decision-making.  Labour's (initial) 10 year agenda was set out in The New NHS - Modern, Dependable.  When Alan Milburn replaced Frank Dobson. in 1999 small but steady increases in funding were replaced by major additions projected over many years ahead and his NHS Plan.  The most radical  changes yet in systems of organisation and funding took. place with expansion of medical schools and nurse education.  Surprisingly Labour that sought partnership with private health care for new capacity and to provide a challenge to complacency in the NHS and looked to the experience of other countries such as the USA and their expertise. Simon Stevens, the health advisor to the prime minister until 2004 and the intellectual driving force behind many of Labour's reforms (the NHS Plan and Payment by Results), had been influential in the importation of US models of health care. John Reid (2003) continued the 'modernisation' policies of his predecessor, including foundation hospitals, and placed increasing emphasis on patient choice.  Patricia Hewitt (2005) continued these policies, while Alan Johnson (2007) wanted to take a fresh look at things.  Successive Secretaries of State, though much influenced by No 10, therefore differed in the line they took

1. "Third way" collaboration, the legacy of Frank Dobson (1997-1999). The internal market was brought to an end, with the elimination of fundholding and the substitution of 'commissioning' for 'contracting'.

2. Central command and control, and later an attempt at devolution, the legacy of Alan Milburn (1999-2003)

3. The new market of financial flows and patient choice coming into effect under John Reid. (2003-2005) with increasing emphasis on chronic diseases and long term care.

4. Progressive introduction by Patricia Hewitt (2005-7) of private sector services, within the framework of a national service with its traditional values (see speech of 19 September 2006).

5. Some consolidation under Alan Johnson, (2007 -)

Alan Milburn followed Frnk Dobson in October 1999 with a new and sometimes disruptive dynamism and a desire for massive change across a broad front, epitomised by his NHS Plan. There was a rush for greater capacity and the recruitment of staff, an increase of 250,000 over the next 6 years. Yet the NHS was not seen to have been "saved" as Labour had promised.  Labour's honeymoon with the medical profession was over. At the annual conference of the BMA in 2001 its chairman, Ian Bogle, said Government had denigrated and abused the profession, driving the morale of doctors to new lows. On 22 March 2001 The Times said of Labour's first 4 years in power on the NHS that waiting lists and waiting times had then barely changed over.  Labour had assumed that if it reversed Tory reforms and smothered hospitals with affection, all would be fine.  It now discovered that many Conservative reforms had merit. 

The government, the professions and the public remained convinced that a centrally funded NHS was the British way and the best way.  Both parties had apparently accepted the view that  government involvement was essential but a Times editorial (February 21, 2001) said that political interference was inevitable in a monopolistic tax-funded service. Virtually no other western developed country had followed the precise path taken in the UK and yet their citizens did receive the new drugs and technologies as they were developed, and their health status might sometimes be better.  In most of these developed countries public spending was at least at the level of the UK, and higher levels of performance were the result of substantial private sector money.  Most countries had a public/private sector partnership, with the private sector playing a far larger part than in the UK.  This point was not lost on Alan Milburn.

The 2001 election gave Labour a second chance. Government faced a dilemma.   Its chosen tools were performance-related pay, private sector style employment contracts, statistical measurements and targets. Labour oversaw centralisation of power into the Department, authorities, the Healthcare Commission and many other bodies.  Yet in the NHS the crucial activities, the talent and the professionalism are on the shop floor, as in the universities, orchestras and organisations such as the BBC.   Here the managerial techniques of the private sector do not always deliver better public services. 

Milburn's legacy included

• recognition that the NHS was underfunded

• significantly more money for the NHS and expansion of staff training, for example new medical schools

• the start of a major building programme, particularly of hospitals under the Private Finance Initiative.

He argued for patient choice and alternative providers; NHS healthcare need not be delivered exclusively by line-managed NHS organisations.  He was willing to consider new ideas, particularly those from the US. The Department of Health came under closer control by 10 Downing Street and the Prime Minister was closely involved.  

Four features of the change were

• A patient-focussed service (patient choice, expanding the independent sector and providing extra capacity)
• Competitive providers, giving hospitals and GPs incentives to change (Payment by results, money following patients, the prospect of "failure")
• Active purchasers - giving PCTs purchasing power and practice-based commissioning)
• Cost effectiveness and affordability, (tariffs, legal contracts and commissioning)

 Speaking to the New Health Network,  Tony Blair, the Prime Minister, in April 2006, later provided an insight into government thinking.

"What is true, however, is that it is only within the last two to three years that incremental change has given way to what amounts to a revolution in the way the NHS works.  The NHS plan we published in the year 2000 – a 10-year plan it is worth reminding ourselves – set a new direction.  We would first build up capacity and introduce new pay and conditions for staff and set strong central targets for improvement.  However, the idea was then, over time, to move to a radically different type of service, abandoning the old monolithic NHS and replacing it with one devolved and decentralised with far greater power in the hands of the patient.  The idea was and is to make reform self-sustaining; so that instead of relying on the necessarily crude and blunt instruments of centralised performance management and targets, there is fundamental structural change with incentives for the system and those that work within it, to respond to changing patient demand. "

John Reid succeeded Alan Milburn in June 2003. Deeply committed to Bevan's vision of a national health service he eased the rapid pace set by Alan Milburn.  He focussed more narrowly on a few key things that might be delivered, e.g. admission waiting times and a four hour target of waiting time in A and E.   The 2003 report of the Chief Executive at last showed improvements in waiting lists and staffing.  Foundation Hospitals were a divisive issue but Reid continued to develop them. GPs and consultants fought against new contracts and then accepted them gaining far more money than the Department had predicted.  He opened consultation on public health and established a review of the many "arm's length bodies".

After Labour's election win in May 2005, Patricia Hewitt continued existing policies. A systemic change was now under way, moving to a more market based approach. The first major initiative of her own was the publication of a white paper in January 2006 on a shift of care from hospitals to the community services. 

By the 2006 Annual Conference of the BMA doctors made clear their opposition to a whole range of policies, f patient choice, payment by results and practice based commissioning.  Doctors lobbied Parliament to protest against the reforms to the NHS at a time of  financial crisis.  The BMA recommended an independent board of governors to run the NHS taking the NHS out of politics.

Alan Johnson (a former union general secretary) succeeded Patricia Hewitt in June 2007 when Gordon Brown took over as Prime Minister.  In supporting roles were a  high-profile surgeon Professor Lord Darzi and a former nurse Ann Keen.  Within a few days yet another  review of the NHS began to explore "the causes of dissatisfaction among staff and patients".  Health Service Journal said that the "to do" list included

• Re-engaging clinicians in reform,
• Addressing tensions over pay,
• Ensuring a successful recruitment process for junior doctors
• Boosting patients' perceptions of the service
• Implementing Gordon Brown's pledge to improve out-of-hours access to GPs
• Making sure all acute trusts reach  foundation status  by 2008
• Reducing hospital-acquired infections, including MRSA and Clostridium difficile
• Tackling health inequalities

Immediately afterwards, the Lord Darzi review of London was published and it seemed that the London and the NHS reviews would be closely linked..

Under Gordon Brown and Alan Johnson it seemed that the Brown government was much less ideologically committed than the Blair one to the use of the private sector as a challenge to the NHS.  Independent treatment centres were less likely to be a major provider to the NHS and the extent of the expansion of patient choice seemed uncertain.  In January 2008 Gordon Brown delivered a speech outlining his view of the future of the NHS.

Policy Developments

• The New NHS - Modern, Dependable

• The NHS Plan

• Implementing the NHS Plan

• The Modernisation Agency

• The NHS Improvement Plan

• Patient Choice

• Community Services

• A new Review of the NHS - Our NHS - Our Future

• An outline of policies affecting the NHS circa 2004

The New NHS - Modern, Dependable

When Labour came to power in 1997 Frank Dobson (and Alan Milburn his minister) found to their dismay that in opposition the party had developed no health service policy worthy of the name that was ready for implementation.  They were starting from scratch.  In that December Labour issued the The new NHS - Modern, Dependable,, which set out their initial vision for change to NHS structure, conceding that some of the features of the Conservatives' internal market were worth keeping.  Labour wished to rebuild public confidence in the NHS.  In fact they built on Conservative initiatives while denouncing them.  The Government wanted to get things done fast and without necessarily relying on local management bodies.  Watch-dogs, systems of audit, targets, and quantified, external and retrospective methods of control proliferated, as did "zones", initiatives and 'czars' with a responsibility for improving specific services.   

There were three main themes of The new NHS

• better communication within the service

• an accent upon quality with new national supervisory bodies 

• a revision of the NHS organizational structure

None was revolutionary, all building upon trends already current.  GP out-of-hours services had increasingly used nurses to assess emergency calls and the new nurse-led help line, NHS Direct  was a dramatic development of this, paralleling the call centres developed by private organisations.  Electronic communication had been developing for twenty years, and hospitals and GPs were already being progressively connected to the NHSnet. 

Second, the existing quality initiatives were disparate and it made sense to try to pull them together.  Labour established a National Institute for Clinical Excellence (NICE) to look at what should be done, and a Commission for Health Improvement (later the Healthcare Commission) to see what was in fact happening. 

Third, the harder edges of the internal market were softened.  Fundholding was to go, co-operation replacing more extreme forms of competition.  Health Action Zones would encourage cooperation between health and social services, an initiative that proved short-lived.  ‘Partnership’ and ‘integration’ would replace the internal market and the jargon of the market changed to that of New Labour. 'Seamless services’ became ‘joined-up thinking’. National guidance stressed the interdependence of health and social care, and joint programmes. It was a return to  the attempts by Barbara Castle and David Owen in 1974 to integrate health and social services planning.  The NHS Act (1998) gave legislative authority for these changes and also the basis of professional self regulation of the General Medical Council.  ^{See  BMJ 1999; 318: 317}

The run-up to the NHS Plan

By autumn 1999 it was clear that the NHS needed a lot more money urgently.  A Mori poll showed that public satisfaction with the NHS, normally buoyant, fell substantially between 1998 and 2000 from 72% to 58%. Alan Milburn, now Secretary of State,  reversed Frank Dobson's policy of discouraging cooperation between the NHS and the private sector.  He insisted that the economy was stable and growing and over ten years more resources would turn the NHS around. Tony Blair, worried by the continuing problems of the NHS, was interviewed at breakfast time by Sir David Frost on16 January 2000. In what was described as the most expensive breakfast in British history, the PM announced that spending on the health service in the UK should rise, over 5 years, to the European average. This public commitment had neither been costed by the Department of Health nor cleared with the Chancellor of the Exchequer. Over the next few hours on that Sunday the Department's Chief Economist, tried to work out with a calculator at home just what the cost would be.  In the March 2000 budget extra money was found for the NHS on condition that the service and the professions ‘modernised’ themselves.  Burdens on GPs might be reduced by NHS Direct and walk-in clinics; GPs, dentists, opticians, pharmacists and physiotherapists might group to take on more hospital work and old people might move out of big hospitals to convalesce in smaller ones freeing the main hospitals for acute care. 

The extra money was generous.  In May 2000 the government accepting that the ‘modern and dependable’ NHS was again in crisis, announced a new plan, issued millions of questionnaires to the public and established six service reviews.  Richard Branson of Virgin Airways was called in to advise on how to make NHS hospitals more consumer friendly. The result was a damning report that concluded that the NHS was being undermined by poor management and abysmal patient care. 

The response to problems.

Labour dumped on chief executives a flood of central initiatives, requests for returns, demands for reassurance, and circulars.  Centralization was in the ascendant.  Yet there was reason believe that the NHS could not be allowed total freedom.  Cost and  quality varied widely. Performance indicators had long showed that unit costs varied massively even for straightforward procedures such as appendicectomy (£470 - £2,100 per case). Why?

A seminal analysis had been published the previous year by Professor Alain Enthoven, whose ideas had crystallized thinking about the NHS in the mid-eighties, published an analysis of the results of the 1991 reforms (In pursuit of an improving National Health Service: the 1999 Rock Carling Fellowship. London: Nuffield Trust, 1999, see also BMJ). He saw advantages in the competition and innovation that had been introduced, and thought there had been a slight rise in productivity although there had been higher ‘transaction costs’. Fundholding tilted the balance of power from secondary to primary care, and in some trusts improvements had resulted from increased locally responsibility for performance. However he thought that the information about costs and quality was often not available, and incentives were sometimes perverse, with patients following the money allocated contractually, instead of money following patients to the hospital where they wished, or needed, to be treated. He argued for far greater attention to continuous quality improvement in the NHS, and Enthoven  (1999) doubted

Enthoven thought more money, fundamental reform and examination of performance variation was required. He cautioned against ‘quick fixes’ and Labour’s tendency to centralize management and policy making. He argued that consumer choice - to which the Conservatives had been moving - was essential. 

The NHS Plan

Labour's second set of proposals for the NHS were issued in July 2000 - the NHS Plan.  One of Mr. Milburn's closest advisers, said that the plan set out to achieve four things,

• a diagnosis of the problems - honest about under funding

• an identification of priorities - increasing capacity, improving responsiveness and dealing with major killing diseases

• mechanisms to achieve change

• and a broad coalition of interested parties

The Conservative reforms of ten years previously had stressed organisational change and incentives. In contrast Labour consulted the public, and the professions that became deeply and often enthusiastically involved. The doctors said that any Plan had to be long-term, if only because of the time it took to train staff.  They could understand the political need for short-term fixes but this should not detract from the longer view.  The BMA liked government's acceptance that the NHS was under funded and there were too few doctors and nurses.  Of more than 100 proposals, only one was unacceptable in principle (debarring young consultants from private practice) and only a handful were questioned, e.g. that the staffing problems of the NHS might be solved at the expense of the Third World.

The public wanted quicker access to a GP, an end to "trolley waits" in A and E, booking systems for appointments and treatment, shorter waits for inpatient surgery and better food in cleaner wards. The Times believed that it was a coherent strategy, focusing on enhancing the numbers and function of nurses, addressing the role played by consultants, and increasing the number of beds that had fallen remorselessly for two decades. There were details and targets aplenty within the four main themes of increasing capacity, setting standards and targets, supervision of the way the NHS delivered services, and 'partnership'.  Initiatives varied from "bringing back matron", to the improvement of hospital food by consulting celebrity chefs. There would be extra beds, cancelled operations would be carried out within a month - if necessary in the private sector, patients would be guaranteed access to an Accident Department consultation within four hours, and there would be a telephone and TV beside every hospital bed. There would be 20,000 more nurses, patients would not have to wait more than three months to see a specialist, or more than a further six to have an operation.  Central pressure was exerted upon local management, particularly to meet waiting-time targets.  In spite of initial cynicism, patient waiting times did decline, partly the result of trusts buying extra capacity, for example by paying their consultants a premium rate to handle additional cases in the evenings or weekends. 

The Plan's aspirations were not costed and in the event the same money was spent on several different things storing up a future crisis.  There was an assumption that there would be cash enough, or at the least if government was rough enough with the NHS and its management, aspirations would be somehow be delivered.  The books did not balance because of the cumulative effects of 

• pay awards above inflation and poorly negotiated contracts

• reducing the hours worked by junior doctors

• the recommendations of NICE

• the costs of National Service Frameworks for mental illness, cancer and heart disease

• the costs of establishing Primary Care Trusts

Few Trusts had any chance of achieving all the targets and put finance at the top of their priorities.  Chief Executives might be warned that it would be 'personally dangerous' to make a fuss.  The biggest threat to Plan's objectives was shortage of skilled staff.  In some hospitals the staffing level on wards was at crisis point and patients were not even being washed.

Some commentators thought that the NHS Plan raised expectations to an unsustainable level, and the Prime Minister risked being impaled by his own targets.  Alan Maynard, professor of health economics at York, wrote that the it contained lots of words and good intent, but that the pearls among the manure had to be teased out. The central problem was that even with enhanced budgets, the new agenda could not be afforded. The previous Secretary of State Frank Dobson said he feared that some failing hospitals might come to be managed by private-sector organisations. David Hunter wrote that the evidence from successive reorganizations since 1974 was that altering the structure and configuration of health agencies invariably resulted in

• unrealistic expectations : changing the culture - as opposed to the structure - of an organisation required stability.

• costs higher than forecast, financially and in human terms, with a loss of irreplaceable skills and expertise

• failure to save money

Managers were unhappy not because of the government's goals, or its diagnosis of the problems of the NHS, but because of the way policy was implemented, the obsession with organisational restructuring, micro-management, short term demands, 'must do' edicts, and a name and shame culture. 

Alan Milburn drove the high profile and politically important Plan.  In January 2002  he set out his vision of a health service providing comprehensive services within a common ethos, free at the point of use, based on patient need and informed choice and not the ability to pay. (Redefining the NHS)  Who provided the service became less important than the service provided.  Within a framework of common standards, subject to common independent inspection, power would be devolved to allow local freedom to innovate and improve services.   Hospitals earning more autonomy would be subject to less monitoring and inspection, have easier access to capital, and be able to establish joint venture companies.

Legislation

The detailed changes in the NHS Plan and Shifting the balance of Power (August 2001)  required legislation because of the alterations to the statutory nature and duties of health authorities in the new structures.  Within the hospitals patient advisory and liaison services (PALS) would be established to provide on-the-spot assistance to patients, resolving complaints where possible but helping patients when a formal complaint seemed appropriate. In September 2001 the government established a further body, a Commission for Patient and Public Involvement in Health to champion and promote the involvement of the public in decisions that affect their health.  The initial impetus owed much to Professor Kennedy who had chaired the Bristol report. Sharon Grant, who founded the Bernie Grant Trust after death of her husband, chaired it.  The Commission had the responsibility for establishing, funding, staffing and managing a network to take over the function of the Community Health Councils. It was a complex structure and in  2004, under the review of Arms Length Bodies, the Commission was closed in March 2008, to be replaced by  (LINks) coterminous with local authorities, 150 local involvement networks that would work with NHS bodies to involve and consult local communities about changes to services. The membership of these would include youth councils, individuals, foundation trust governors, tenants’ groups, minority ethnic groups, patients’ groups, faith groups, neighbourhood renewal networks, carers networks, patient transport groups, local business groups, Older People’s Forums, self-advocacy groups and support groups for specific services.

Delivering the NHS Plan (April 2002)

The day after the 2002 budget had increased the financial expectations,  Alan Milburn, published Delivering the NHS Plan - next steps on investment, next steps on reform.  This pulled previous policies into a single document and introduced important new ideas

• A change in the pattern of financial flows in the NHS moving to payment by results (PbR) using a  tariff system.  "Health Resource Groups" would establish a standard  tariff on regional basis for the same treatment regardless of provider.

• Foundation Hospital Trusts would be identified.  Subject to legislation they would be established as independent public interest companies, outside Whitehall control, and governed only by performance contracts and inspection by the Healthcare Commission.  They would have greater freedom of decision making. They would be dependent on local primary care trusts who would hold the money to pay for clinical services.

• Patient choice. Over the coming four years patients would be given information on alternative providers and would be able to switch hospitals to have shorter waits. Patients who had waited more than 6 months would be offered services at an alternative hospital - an improvement but less than the choice people had been offered for the first 40 years of the NHS.

• Primary Care Trusts would be free to purchase care from the most appropriate provider, public, private or voluntary

• A new Commission for Healthcare Audit and Inspection (the Healthcare Commission) would be created by legislation, taking over the responsibilities of the Commission for Health Improvement, health audit responsibilities of the Audit Commission and also those of the National Care Standards Commission, a body concerned with the private sector that had only been in operation for three weeks.  Spending increases would be linked to a strict routine of independent audits.

If patients were going to be able to exercise choice, and cash for treatment went with patients, the wheel had turned full circle within a decade and was returning to something like the Conservatives' market reforms.  Alain Enthoven described the plan as a bold wide-open market, more radical than the previous Tory version of an internal market system.  Kenneth Clarke agreed that it was the internal market re-written, and it was oriented to patient choice and devolution.  His reforms had faced a barrage of criticism from medical organisations; now there was little protest.

Modernisation and the Modernisation Agency

Modernisation became the mantra.  Many of its concepts had a transatlantic origin and the new NHS Modernisation Agency worked on projects with the Institute for Healthcare Improvement in Boston.  Changes in skill mix, including the use of nurses for triage and to replace medical staff, reflected the development in the USA of nurse practitioners in the eighties. Treatment centres were similar to US ambulatory care centres.  Health Resource Groups were akin to Diagnostic Related Groups. Even national service frameworks owed much to the US guideline and health care pathway movement.  The enthusiasm of those outside government who had been involved in the NHS Plan's construction was channeled into the Modernisation Agency and its task forces to encourage transformation, change, improvement and innovation. 

Modernisation, a concept to which doctors might be antagonistic partly because of the fear of the increasing power of management involved

• acceptance that all clinical decisions had resource consequences

• recognition of the need to balance clinical decisions with accountability

• support for the systematisation of clinical work

• acceptance of the power sharing implications of team work  (Degeling P et al, BMJ 2003; 326: 649-52)

The NHS Modernisation Board included several Trust chief executives, a professor of surgery (Professor Ara Darzi), a senior nurse, and board members of the Alzheimer's Society, the Citizens Advice Bureaux and the Commission for Racial Equality.  The Board's function - to monitor and advise -  resembled the NHS Management Board established in 1984 in the wake of the Griffiths Management Enquiry. The Modernisation Agency grew like Topsy, attracting quality staff from trusts and authorities.  Its chief executive, David Fillingham, said that  CHI was about performance assessment and the Modernisation Agency was about performance improvement.  The Agency became involved in helping failing trusts, running some 60 different programmes.  It brought together the National Patients' Access Team, the Clinical Governance Support Team, the National Primary Care Development Team, the Learning Network Team and the Leadership Programme.  All health authorities had to appoint their own "modernisation" teams, some 1,200. Chief executives were left in no doubt that failure to deliver on specific promises might cost them their jobs.

By 2004 the Modernisation Agency employed 760 people and had a budget of £230 million but the Department, engaged in a review of quangos (NHS bodies at arm's length from the centre) decided to reign it in.  The bulk of its work was devolved and the Modernisation Agency was closed in 2005, parts being integrated into a new NHS Institute for Improvement and Innovation.  Lessons learned were distilled into ten high impact changes

The NHS Improvement Plan

In 2004 John Reid published the NHS Improvement Plan, four years after the publication of the NHS Plan itself.  This drew attention to improvements and stressed the importance of the care of chronic diseases (responsible for so many hospital admissions) and of public health.  It described a vision for the future -

• Patients able to choose from four or five hospitals by 2006
• Unlimited choice of NHS provider by 2008 and choice of private providers who meet the NHS tariff
• 15% of operations and tests to be carried out in the private sector by 2008
• Waiting times to be cut to a maximum of 18 weeks by 2008
• Maximum wait of eight weeks for referral to treatment for cancer patients by 2005
• More support for patients with chronic conditions
• Every primary care trust to offer community matrons by 2008
• Electronic booking and prescribing by 2005
• Fewer national targets

 The Improvement Plan, like the NHS Plan before it, set out a multitude of initiatives.  Reid summarized the strategic direction as

• Delivering more care, more quickly through investment and reform

• Offering people more personalized care and a greater degree of choice

• Greater concentration on prevention rather than cure

There would be a combination of national and local target setting with fewer national ones, which would be largely about health outcomes and outputs - not inputs. Trusts would set their own targets covering service gaps, the needs of the local population, and audit the equity of services paying particular attention to the needs of black and minority ethnic groups. 

A progress report in October 2006 discussed demonstration projects, GPs who were trained surgeons operating on hernias in upgraded surgery facilities, specialist nurses from hospital following up women who had been discharged early after mastectomy, and GPs with specialist interest seeing outpatients in place of consultants.  The projects were worthwhile, but many required investment in premises or staff training, and did not seem likely to revolutionise health care or save much money.   Indeed, within a  year the £500 million suggested for a community hospital programme seemed to be disappearing.

A new Review - Our NHS - Our future.

Within days of taking office in 2007 the new Secretary of State, Alan Johnson, set in hand a further review of the NHS.  This review shared some of the characteristics of its predecessors, for example that the centre "would listen to staff and people, the experts on what was wanted and what could be done".  However this review would be clinically centred, on health care, rather than on organisational structure.  The immediate elevation of Sir Ara Darzi (who had just completed a review of London services for the SHA) to Lord Darzi, and his appointment to lead the review confirmed its clinical slant.  It was clear that the timescale would be rapid, less than a year.  Clinical issues would be considered within a framework already set out by Lord Darzi in his London review e.g. mental illness, maternity, acute care).  The discussions at a national or regional level were at a general level. A tour of "engagement sessions" set out the centre's ideas.  Local discussions followed but there was no sense that these discussions modified anything. A national document would be published in the 60th anniversary year of the NHS.  Some cynicism greeted the commitment of yet a further review "to listen".  In October 2007, at a time when the possibility of a snap election was being discussed, Lord Darzi published an interim report.  He seemed to be moving into a role as a Minister rather than as a clinician.

Organisational Change

• Legislation

• "Delivering the NHS Plan"

• Devolution Day

• Foundation Trusts

• Structural reorganisation (2006)

Structural change was continuous throughout the decade 1998-2007 with major change in 2002 and 2006.  New organisations were formed, functions were redistributed, and within a few years they might be merged with others or abolished.  The New NHS - Modern, Dependable began this process.  The eight regional offices of the Department of Health’s Management Executive, recently declared to be central to the system, were said now said to be redundant. In April 1999 the eight were maintained although adjustments took place, as a result of which a single region was temporarily established for London. Within their new boundaries continuing mergers and reorganisations took place.

The nature of the authorities and their responsibilities were changing

The decision by Labour to abolish GP fundholding led to a search for other methods of giving primary care power and influence over the use of money in the hospital sector.  From this flowed the Primary Care Groups and later Primary Care Trusts.  Like a pack of cards, other organisations had to change to fit in.  As PCTs were given substantial control over expenditure, the function of health authorities diminished and they were abolished.  The organisational structure began to unwind and the functions of the regional offices and the Department of Health came under scrutiny.  Ultimately organisational change affected every level from the GP to the Secretary of State. 

Subsequently the NHS Plan (2000) set in train the largest reorganisation of the NHS for many years.  Mr. Milburn said that the NHS seemed top heavy, with the NHS Executive, eight regional offices, 99 health authorities and confused lines of reporting.  Power would instead move to the front-line.  The regional offices were reduced in number to four; with a regional director for health and social care and a small core of staff, part of the Department of Health and co-located with other government regional functions.

The Health and Social Care Act (2001) gave Government new powers, which amongst others allowed the Secretary of State to form or give grants to companies to provide services formerly provided by the NHS, and to employ doctors, nurses and other clinical staff.  It also made possible a new form of Trust.   Care Trusts would provide closer integration of health and social services, have local authority members on their boards, and might have pooled budgets, commissioning arrangements spanning both health and social services and the ability to delegate functions.   They would be based either on a PCT or an NHS Trust and encourage partnership and integrated provision.  Areas that already had well-developed integrated services, for example Wiltshire, planned to introduce such trusts.  Broadening the range of options for health and social services  to deliver integrated care, they would be able to levy charges, in particular for 'personal care'.  The first such trust to be approved was Northumberland, where the Northumbria Healthcare Trust would be associated with social care services, have a budget of £330m, and over 1000 staff. Three other new care trusts, in Bradford, Manchester and Camden & Islington, united mental health trusts and social care.

The Department of Health

From 1985, when the Department of Health accepted the Griffiths Letter and created a management cadre within the NHS, it began to change its own structure.  Internally the Department was divided into an NHS Management Executive, while "wider" Departmental functions e.g. international health, remained within the remit of the Permanent Secretary.  Increasingly the Management Executive was staffed by people with managerial skills from the NHS or outside it, as opposed to career civil servants.  The relocation of the Management Executive to Leeds in 1992/3 increased this, and progressively the running of the NHS came to seem the most important function of the Department - and one requiring great and continuing political influence._{(Greer SL, Nuffield Trust 2007)} In 2000 the top jobs of permanent secretary and chief executive of the NHS Executive were re-combined. The Department was now far smaller than previously, for example at the time of the 1974 NHS reorganisation, focussed on delivering political objectives, and perhaps weaker on policy research capacity.  The latter role would often be filled by political advisers, often brilliant but with a particular agenda.

The Department would

• set strategic direction, distribute resources and determine standards

• ensure integrity of the system through information systems, staff training and support for development

• develop values for the NHS through education, training and policy development

• secure accountability for funding and performance, including reports to Parliament.

Four new Regional Directorates of Health and Social Care (DsHSCs) with a small staff replaced the 8 regional offices and oversaw the NHS and the link between NHS organisations and the central department.   The new directorates, North, South, Midlands and East, and London did not map the boundaries of the previous eight regional offices.  They

• Oversaw the development of the NHS and social care
• Assessed Performance of the whole health and social care system and, in particular the new health authorities.
• Managed senior NHS staff
  This includes the appointment and development of senior NHS staff.
• Public health
• Supported Ministers and troubleshoot

When they had only been in existence for 9 months, the Department of Health reviewed its functions yet again to shrink its staff  and move jobs away from London. Some of the regional directorates' work was redistributed to the 28 SHAs (see below) and to new organisations such as CHAI and the Health Protection Agency that were being established.  From 2000 onwards the Department began to appreciate the problems that centralism and micromanagement would produce, and began to disengage increasingly from the front line.  Devolution, and Foundation Trusts, were one result of this. 

Strategic Health Authorities (SHAs).  

SHAs would