By Richard S. Grayson
This article was originally published in Reinventing the State: Social Liberalism for the 21st Century. We are grateful to Richard for allowing us to reproduce this article. Visit the Methuen website to purchase the latest edition of this book for the discount price of £10.
The democratic deficit in the NHS
Of all issues in public policy, health care is the one in which the public is consistently most committed to a major role for the state. The basic principle of the National Health Service – a tax-funded state-run system free to all citizens at the point of use – is a hugely popular one. Even the most pro-market politicians are reluctant to challenge it. Of course, the principle of tax funding was undermined as early as 1951 when the Labour government introduced prescription charges for false teeth and spectacles, and charges were then expanded further under the Conservatives in 1952. However, charges make up a tiny percentage of the NHS budget today, and the core of the tax-funded system remains unchallenged in party programmes.
Is that a problem? Some believe that funding through taxation has meant that the level of financing the NHS has been too low compared to other European countries. Michael Portillo made that case in 1998, saying that the necessary money could not be found through taxation: ‘The gap between what we spend on health care today and what we ‘ought’ to spend is large, and no party is going to make it up from taxation.’1 However, the record of the Labour government since 1997 has suggested that this analysis is wrong. They have put billions more into the NHS; one of Labour’s proudest claims is that ‘Investment into the NHS has doubled since 1997 and is set to treble by 2008 to over £90 billion.’2 The funding of health care in the UK now compares favourably with other European health systems, whether publicly or privately funded.
This suggests that it is possible to fund the NHS through general taxation at levels which compare with other countries, and that Liberal Democrats should not be seduced by arguments that more funding means private funding. Moreover, Liberal Democrats should recognise that tax-funding is the surest way to ensure socially just funding. Such funding is socially just on two grounds. First, it is redistributive, in that the wealthiest in society pay the highest share of the costs. Second, and most important, access to health care is not limited (at least in principle) by an individual’s ability to pay charges, whether on a one-off basis or through an insurance premium. For these reasons, this chapter does not propose any alteration to the basic funding regime of the NHS.
In contrast, decision-making within the NHS needs radical change. Despite the increased levels of funding under the Blair government, if only from 1999, there is no sense in which the public believes that all is well with the NHS. In particular, despite the extra money, the cumulative deficit of NHS trusts has risen past £1 billion. Consequently, some hospitals are faced with losing services or even closing altogether. The case has been particularly marked in the author’s own constituency, Hemel Hempstead. In July 2006, Liberal Democrat research found that sixteen hospital trusts, running twenty-seven hospitals in England providing acute services, were under strong pressure due to their deficits. The research identified the West Hertfordshire NHS Trust, which runs St Albans City Hospital, Hemel Hempstead General Hospital and Watford General Hospital, as being under the most pressure. Others at high risk included West Middlesex University Hospital NHS Trust, and Surrey and Sussex Health Care NHS Trust. The list suggests that deficits appear to be greatest in the south-east of England.3 The deficit means that trusts are obliged by the rules to make cuts, albeit after going through public ‘consultation’ exercises. Despite the huge public support for keeping all hospital services, trusts find they cannot do that because they do not have the money. But because they have little real meaningful independence from central government, and no power to raise extra public funds locally, they are unable to have a meaningful debate with local people about how local aspirations can be met. The end result is that after nearly a decade of increases in NHS funding, all that some local people see is the closure of wards. They understandably fear for the future of entire hospitals. Continue reading
- Michael Portillo, ‘The Bevan Legacy’, Kathleen A Raven Lecture given at the Royal College of Surgeons on 10 June 1998; available at: http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1113449. [↩]
- http://www.betterwithlabour.co.uk/nhs/Made_by_Labour#top10. [↩]
- Liberal Democrat press release, ‘Lib Dems highlight English hospital trusts most under pressure’, 25 July 2006; available at: http://www.libdems.org.uk/news/story.html?id=10674&navPage=news.html. [↩]
