The nature and outcome of the 1974 reorganisation of the National Health Service can only be touched upon briefly here. It was planned by a Conservative administration as part of the government’s wider programme of administrative reform, which aimed to make it easier to plan and develop services across authority boundaries and to give scope for changing the balance of resource allocation between them. Just before the date of reorganisation a general election brought Labour to power. Mrs Barbara Castle became Secretary of State for Social Services in March 1974 and Dr David Owen, Minister of State for Health. Some features of the reorganisation did not appeal to the new administration but the central aim of unifying community and hospital services was accepted as sound.

Reorganisation had a number of objectives. First was the unification of the three parts of the NHS, hospital services, family practitioner services and the health services provided by local authorities, into a single structure. Second, the new structure was expected to make easier a ‘clear definition and allocation of responsibilities, with maximum delegation downwards matched by accountability upwards’. Third, there was to be a comprehensive planning system to ensure that policies were translated into action^.2 Though the changes in 1974 can now be viewed as no more than a single stage in the evolution of the health service system, it seemed a vast step to those working in London hospitals. With the exception of the postgraduates, the teaching hospitals lost their boards of governors, and hospital management committees disappeared. Newly created area health authorities and health districts served a defined population. They advertised for staff and many familiar faces disappeared from the hospitals, either by success in the competition for the new jobs or by early retirement.

The ‘Grey Book’ on management arrangements for the reorganised health service was the outcome of a study supervised by a committee whose members were drawn from the three branches of the service and the Department, chaired by its permanent secretary, with the assistance of McKinsey and Co and the Health Services Organisation Research Unit of Brunel University.³ Roles and responsibilities were defined with a precision not to everybody’s liking. The concept of management by consensus among chief officers of different disciplines was in­troduced. With few exceptions the officers of the regional health authorities were those of the old regional hospital boards; they had many new things to learn. Health authorities now had a wider span of responsibilities, ranging from community health services to the regional specialties and the high technology of teaching hospitals. Authority meetings were now to be held in public and the member­ship of area health authorities included four nominees of local authorities. Each health district related to a new consumer organisation, the community health council, which had a right to be consulted on changes in service and to oppose significant alterations at ministerial level.

These organisational changes were carried out against a background of increasing stringency and the new structure was sometimes blamed for problems which were really caused by a shortage of money, particularly in London. There was widespread if spasmodic industrial action by many groups of staff. The teaching hospitals had difficulty in adjusting to the new order, and regretted the now distant relationships with the Department of Health and Social Security. Two were in the process of relocation, Charing Cross in Fulham and the Royal Free in Hampstead. Neither believed that the cost of running the new and larger facilities had been estimated correctly.

Medicine was not standing still. Diagnostic imaging was being revolutionised, ultrasound was developing and the first computer assisted scanners were being introduced into London hospitals. New methods of treatment were developed, often pioneered in the teaching hospitals but sometimes being introduced into the practice of district general hospitals. Coronary artery surgery and pacemaker insertion was expanding rapidly; oncology, bone marrow transplantation and joint replacement also had to find their place amongst the services offered, and had to be financed. Services for the elderly, the mentally ill and mentally handicaped also needed improvement. These ‘Cinderella services’ were now unambiguously the responsibility of the same district authorities as were the teaching hospitals. They therefore came into direct conflict with new initiatives in acute treatment, within the same budget.

The introduction of a comprehensive planning system involving the Department of Health, the regions, the areas and the districts, was intended to be an essential component of the 1974 reorganisation. Nowhere was it more important than in London with its legacy of problems. The deficiencies in primary care and long stay services, the concentration on acute services, and the problem of reconciling London’s role in medical education with the level of acute facilities likely to be available in the future remained unresolved.

The financial pressures upon teaching districts were now clear but the speed with which they could react was reduced by the need for public consultation, and local opposition to any reduction in health services. Some of the districts with the greatest financial problems were matched by local authorities which were left-wing in complexion. Their nominees on the area health authorities made it clear that any reductions were anathema to them. One teaching area, Lambeth, Southwark and Lewisham, passed a resolution in 1979 that in effect limited the extent to which it was prepared to cut clinical services. This action would inevitably have led the authority to exceed the cash limit it received. Mr Patrick Jenkin, the Secretary of State, appointed commissioners under section 86 of the NHS Act 1977, which permitted him to give directions for a specific period to ensure, in an emergency, that services would continue to be available. This decision was subsequently challenged successfully, but not before a measure of financial control had been re­established. The court ruled that Mr Jenkin had acted outside the power of the section by failing to specify the duration of the crisis. Instead, the court said, he might have acted under section 17, directing the authority to economise in specific terms.⁶

Acute beds available in the same hospitals in 1931 and 1971

*To this figure one might add beds in hospitals which provided fever services in 1931, but had become general hospitals in 1973. It is impossible to estimate the proportions of elderly/long stay patients in hospitals which were, in the main, acute hospitals.

Meanwhile regional authorities, unimpressed by the potential of the London Coordinating Committee, were coming to believe that their own planning activities might provide more substantial and achievable economies. The committee gradually lost favour and held its last meeting in July 1976. For some time afterwards the members received briefing about London developments, but few regretted the committee’s passing. Its ineffectiveness highlighted the problem of developing London-wide strategies which would achieve general acceptance. Yet the planning of the Thames regions was proceeding at widely differing rates, and it was clear that there would be a variation in comprehensive­ness and quality. Nor would the four plans necessarily be compatible with each other. Elsewhere in the country this might not have mattered, but in London, where major reductions in services were likely to prove necessary and cross-boundary flows were significant, a measure of coordination was essential.

The London Health Planning Consortium

Dame Albertine Winner had retired from the civil service before becoming the chairman of the Joint Working Group in 1967. The Consortium, on the other hand, was chaired by a serving departmental officer, Mr J C C Smith, and received considerable support in the analytic work required from the Department of Health. The membership included officers and representatives of the four Thames regions, the University of London and the University Grants Committee, the postgraduate hospitals and the Department itself. It was not an executive body and decisions continued to lie with the statutory health and academic bodies, and where necessary with Ministers.⁶ Concurrently the University of London was under increasing financial pressure. To begin with it had not believed that it would experience financial cuts, although prepared to consider how best to maintain the quality of its medical and dental education with so many clouds upon the horizon. The position worsened and the principal of the university had to ask the deans how they were not going to spend the money they were not going to get.

The Flowers working party

In 1977, at the request of the University’s Joint Medical Advisory Committee, the Conference of Metropolitan Deans set up a working party to consider rationalisation. However this group was unable to produce definitive recommendations even though there was an accept­ance of the need for change, and that the number of medical schools might need to be reduced. As a result the vice-chancellor established a major review of the resources for medical and dental education in February 1979. It was chaired by Lord Flowers, rector of the Imperial College of Science and Technology. Lord Flowers’ working party started to meet some time after the London Health Planning Consor­tium, and it had to work to a tight timescale. Basic assumptions were that the current intake of students and the existing level of funding would be maintained, but that regard should be paid to demographic trends and the Department of Health’s resource allocation policy. 

The Consortium’s reports 

The London Health Planning Consortium faced two main problems. It was widely accepted that there were many small and medium sized units in specialties like cardiac surgery and radiotherapy, and a degree of rationalisation was desirable. The second problem was the need to reduce the level of acute hospital services in central London, to bring it into line with population and with the money likely to be available in the future. Regional specialties were studied by groups with an independent chairman, specialist expertise being supplied by people who worked outside London, whilst local knowledge of the London hospitals was available from consultants working in fields other than the one under examination. Between 1979—1980 a series of reports were published for consultation.

Amongst the most controversial recommendations were the closure of the pre-clinical school at King’s College, Strand, and Westminster Medical School.⁹ Both were bitterly and effectively opposed. Faced with such opposition the University could not come to immediate decisions, even though financial cuts were inevitable. The conflict spread wider than the medical faculty, for there were consequences affecting other institutions. In any case some recommendations did not seem viable and the University’s joint medical advisory committee produced a revised plan for restructuring London medical and dental education which was likely to achieve wider support. The modifications were accepted by the university joint planning committee, but the Senate was divided and referred them back. There was to be further delay. A new working party was established chaired by the deputy vice-chancellor, Professor Leslie Le Quesne, to examine the costs and savings which would result from different patterns of closure and amalgamation.12 The University employed management accountants to assist with this costing exercise and in the meanwhile it encouraged those schools wishing to proceed with closer association to do so.

The costing study necessarily made a number of assumptions, some of which were open to challenge. In general the high cost of running the newly built medical schools was confirmed. Merging medical schools appeared to be more cost-effective than merely phasing out a pre­clinical school. It was also clear that agreement would not be achieved purely by demonstrating that some solutions were cheaper than others. 

The structure now envisaged would place the managing authorities, the districts, close to the point of service delivery, while maintaining regional authorities for the purposes of strategic planning and resource allocation. Patients First stated that in London the government did not contemplate major changes in regional boundaries in the next few years - in other words the starfish arrangement would persist and a central London health authority was not under consideration. It was also suggested that there would be advantages in the establishment of an advisory group, representative of major interests, to assist the govern­ment in considering major issues in London.

In May 1980 the Secretary of State established this as the London Advisory Group, chaired by Sir John Habakkuk (Principal of Jesus College, Oxford; vice-chancellor of Oxford University, 1973—7) to report to him and advise on the development of London’s health services, and the restructuring of health authorities.¹⁵ Its first task was to suggest guidelines for determination of boundaries in London, a problem recognised as more complex than elsewhere in the country. These appeared as an appendix to a departmental circular on structure and management (HC(80)8). Two further reports published early in 1981 proposed a strategy for the future organisation of acute hospital services in London.¹⁵ They recommended a reduction in the number of acute beds to free resources for the elderly, the mentally ill and handicapped, and for a variety of community services. The London Advisory Group accepted the conclusions of the London Health Planning Consortium, after examining its assumptions.

The consortium had pointed to over-provision in relation to future needs and had predicted that because of shortening length of stay the same number of people could be treated in fewer beds. The group reported that in two years that had elapsed since the consortium’s calculations there had already been a reduction of 1,950 acute beds, nearly seven per cent, a more rapid rate of decline than the consortium had projected. 

In contrast to this fall the number of beds in private hospitals in inner London was rising, more than doubling between 1977 and 1983 to over 1,300. Some of the private hospitals were themselves specialising,providing particular facilities like radiotherapy or maternity and child care.

One of the most significant statements made by the London Advisory Group was that full use should be made of major hospitals, reductions when necessary being made elsewhere, presumably in smaller institutions. One region, North East Thames, had already been pursuing this strategy, rationalising smaller hospitals and building larger district general hospitals at Newham and Homerton. This approach, which promised to free resources for other uses, received the general endorsement of the Secretary of State. 

Major hospitals of which full use should be made¹⁵

The regions were asked to submit proposals for the boundaries of the new district health authorities to be established, taking the guidance of the London Advisory Group into account. Because of the tendency to propose a district to match every viable district general hospital, the number of authorities created proved to be considerable. At the Secretary of State’s request the London Advisory Group considered the submissions. Work was hampered by the fact that the University of London had not come to final conclusions on the Flowers report. This was particularly significant in the centre of London where hospital catchments seldom matched local authority boundaries, and the main academic institutions were sited. No ideal arrangement was possible in inner London, whereas in outer London there were few problems and in the main the regions’ proposals were accepted.¹⁵

The university was considering the association of the medical schools of Charing Cross and the Westminster Hospitals, which led the North West Thames region to propose the establishment of a single district to be known as ‘Riverside’ to be responsible for both teaching hospitals. The university also suggested that the medical schools of the Royal Free Hospital, University College Hospital and St Mary’s should be grouped together. This commanded little support in the committee established to consider the proposition, all three medical schools preferring a pairing which excluded St Mary’s. This opened another possibility, a joint district to be known as Bloomsbury, to manage the Middlesex and University College Hospitals. The two teaching hospitals were close to each other, but lay on opposite sides of a regional boundary and the idea was initially opposed by the hospitals, the regions and the university.

The Secretary of State was concerned to find a balance between the conflicting requirements of coterminosity and practicability in health service terms. His decisions differed in some respects from the recommendations of the London Advisory Group.¹⁵ In only one case was a district established which contained more than one teaching hospital, Bloomsbury. Once the decision was announced it was accepted with good grace and an evident desire to take advantage of the consolidation of two undergraduate teaching hospitals and three postgraduate groups, St Peter’s, the Royal National Orthopaedic and the Royal National Throat, Nose and Ear hospitals. The grouping gave the district authority a worthwhile management task, and avoided the risk of separate authorities each bent on the defence of its own institutions. In London as a whole coterminosity remained a major feature. 27 out of 33 London boroughs related to only one district and 18 were coterminus with the matching health authority.

With the publication of the London Advisory Group’s last report its work was complete, and it was disbanded in 1981 at the same time as the London Health Planning Consortium. 

The decisions of the University of London

In December 1981, a year in which the University Grants Committee announced a reduction in grant in each of the next three years, the University of London finally reached conclusions on the pattern of undergraduate medical education in London.¹⁷ It was decided to reduce the number of separate schools, only four remaining independent; the Royal Free, St Mary’s, St George’s and King’s College Hospital Medical School which was in any case uniting with King’s College Strand. Charing Cross and the Westminster Medical Schools would be strengthened by merger; the proposal by the medical schools of Guy’s and St Thomas’s to form the United Medical Schools under a single governing body was supported; the medical colleges of St Barth­olomew’s and The London should cooperate; and a joint school would be established between the Middlesex and the Faculty of Clinical Sciences of University College. The last would mirror Bloomsbury, creating an academic organisation of considerable size and prestige. The newly constructed medical school buildings at St George’s and Charing Cross had proved expensive to run, largely because they provided a much higher standard of accommodation. But they were sited further from central London in the midst of large residential areas, and it seemed only sensible to exploit this advantage. 

The governance of the postgraduate hospitals

The governance of the specialist postgraduate hospitals had been put to one side in 1974. It was difficult to see where they might best fit in to the reorganised health service. The 1972 reorganisation White Paper suggested that they should become closely associated with other services in their vicinity, in line with the recommendations of the Royal Commission on Medical Education in 1968.18 The existing boards of governors were preserved and continued to function under earlier health service acts.

The old antipathies between the specialist hospitals, which often formed the focal point of a specialty unable to claim many beds within a general hospital, and the undergraduate hospitals, persisted in the form of a mutual wariness. The association suggested in the White Paper had little appeal for the postgraduate hospitals, which had branches in several parts of London and seldom related clearly to a single region. To become too closely involved with a general hospital carried the risk of merger and ultimate extinction. Nevertheless, their future role required examination and in 1976 the university established a working party under the chairmanship of Professor Norman Morris to review the academic institutes with which the postgraduate hospitals were associ­ated.

In March 1976, Dr David Owen suggested that a single authority might integrate the planning and management, and rationalise the services of three hospitals which lay next to each other: the Hospital for Sick Children, Great Ormond Street, the National Hospital for Nervous Diseases, and the Royal London Homeopathic Hospital. A steering committee accepted the possibility of such an arrangement, while pointing out the difficulties and complexities which would be involved. Incorporation of postgraduate hospital groups into area health au­thorities was another possibility. The postgraduate hospitals made it clear that the onus of justifying change lay upon those proposing it. Led by Sir Reginald Wilson, the boards pointed out that their activities spread far wider than the boundaries of any one district, and some groups managed hospitals in two or three different regions. They denied that planning arrangements with the regions were inadequate, were well satisfied with the status quo, and preferred to maintain their direct link with the Department of Health and Social Security.

In September 1978 after several meetings and conferences, the Department issued a discussion document which proposed the estab­lishment of a London postgraduate health authority.¹⁹ This would take over the Department’s role in planning and resource allocation, but would remain directly responsible to the Secretary of State. The existing boards of governors would remain in place for the time being. Other options were also canvassed which involved the early disappearance of the boards, but in the absence of consensus the DHSS preferred to temporise. The proposal for an ‘overlord’ postgraduate health authority was regarded by the hospitals as very much second best; they preferred the status quo. The idea was criticised in the House by Mr. Patrick Jenkin as the insertion of a further tier of management when simpler structures were in fact required. Shortly afterwards, in May 1979, a Conservative government was elected and Mr. Jenkin became Secretary of State for Social Services. It was then decided to take no action until reports of the Flowers working party⁹ and the Royal Commission on the National Health Service¹³ were available.

The London Advisory Group considered the management arrange­ments of the postgraduate hospitals in 1980 and visited all of them. The university was considering the possibility of merging some institutes with medical schools, but where it proposed to maintain a separate university institute this argued for the maintenance of an independent authority. The presence of university representatives on the London Advisory Group was therefore important, so that all could be made aware of the way university thinking was developing. In its report, the London Advisory Group distinguished between hospitals which were to be rehoused in close association with general hospitals, or where the matching institute was likely to be merged with a general medical school as a result of the decisions following the Flowers report; and those which were unlikely to move from their existing sites and where the institute was likely to continue in its present form for the foreseeable future.¹⁵ It recommended that the first group should be managed by the appropriate district health authority from 1 April 1982. Hospitals in the second category, in general the larger ones with more viable institutes, should be managed by newly established special health authorities in place of the existing boards of governors. Following consultation, the Secretary of State established special health authorities for six groups, and for the Hammersmith Hospital. The Hospitals for Sick Children, the Royal Marsden, the National Hospitals for Nervous Diseases, Moorfields, Bethlem Royal and Maudsley, and the National Heart and Chest Hospitals, remained independent of the regional health authority structure. The Hammersmith, associated with the Royal Postgraduate Medical School, while wishing to remain accountable to the North West Thames region, found to its surprise that it was reconstituted as a special health authority. Four groups came under the management of a district authority: the Royal National Orthopaedic Hospitals, the Royal National Throat, Nose and Ear Hospitals, the St Peter’s group and St John’s Hospital for Diseases of the Skin. The first three came under Bloomsbury, and St John’s under West Lambeth where it was likely to be relocated (within St. Thomas' Hospital).¹⁶ Decisions on the Eastman Dental Hospital and Queen Charlotte’s were postponed.

During the months preceding the restructuring of the health service on 1 April 1982, chairmen and members were selected for the new district authorities and new officer teams were appointed. Once again management was to operate by consensus. Certain teaching districts were designated: those deeply involved in medical education because they managed the main university hospital used by a medical school.²⁰ Some of the medical schools prepared the private legislation needed to unite independent institutions, in line with the university’s proposals.

The pattern of the acute services was changing; small hospitals were closing, small accident and emergency departments were disappearing. Evolution was assisted in some places, like Bloomsbury, by the way in which restructuring changed the responsibilities of authorities. Amalgamation and rationalisation, the chosen tools of the King’s Fund in earlier years, were once more the order of the day. Health authorities now, for financial if for no other reasons, had to grasp the nettle of reshaping the hospital services in central London more closely to national priorities. The pace of change was increasing.

References

1     Machiavelli N. Il Principe. Rome, Antonio Blado, 1532.