The most important issue of 2011

This is my response to Anthony Painter's column on  Labour List today. In my opinion, 2011 will be the year that the NHS collapses and here I want to outline the political effect.

So far Lansley has been rather clever, and rather dim.

Take the "dim" first. The NHS is a very large organisation to run. It is particularly difficult to run when the money is short. Lansley has taken the attitude that he does not want to run it. He's refused to pay any attention to the financial issues in the service. What's worse is that his attitude is that it is nothing whatsoever to do with the government or the Department of Health. He takes the attitude that the financial problems are the problems of PCTs, NHS trusts, Foundation Trusts and GPs: he gives them money and if they generate a deficit that is their problem. (Of course, it is not their problem, it is our (patients') problem, but I don't think Lansley ever thinks about patients.)

The NHS will face a financial crisis later this year. It will be one of the worst crises the service has ever faced because the NHS has never before faced a 4% cut year-on-year while having to re-organise itself. A 4% cut is bad enough, but the re-org is the real problem. You simply cannot increase productivity and efficiency when there is the disruption of a large scale re-organisation. Do one or the other, but not both. Since the financial situation is the most important it is vital to minimise any other disruption. Lansley, however, has to go ahead with the re-organisation because it is his vanity project, he knows that it is the policy that will put his name in the history books.

The historical precedent from its 60 year history shows that in the four other times the NHS had a financial crisis the only way to get the NHS working again was to raise funding. In those four cases the funding raise was between 8% and 12%. [I will give the details in another post.] Can you imagine the effect on Lansley's reputation of pleading with Osborne for another £10bn to save the NHS from collapse?

This incompetence on Lansley's part has not gone unnoticed at No 10. This makes Lansley very vulnerable, and if there is a cabinet re-shuffle after the May elections Lansley will be top of the list. My prediction is that Dorrell will be the next Secretary of State. As the chair of the Health Select Committee he's made satisfying noises about the importance of focussing on the finances rather than Lansley's vanity re-organisation.

Where has Lansley been clever? Well, announcing in July last year that PCTs and SHAs will be abolished, and then telling PCTs that they must prepare immediately for that event. Without any legislation, without Parliamentary approval, Lansley has already implemented GP Commissioning. That's clever. PCTs are in meltdown and it is a one way process: you cannot revive them now. The first 52 GP Consortia pathfinders are already in place and are commissioning for one quarter of the people in England, this will rise to half of England by the summer.

GP Commissioning is here. Lansley's vanity project has been implemented, and it will be extremely disruptive to reverse it (see my comments above - disruption must be avoided). The problem is the cost: it has contributed to, rather than mitigated for the financial crisis later this year.

The NHS financial crisis will be a terrible thing, but it will be an opportunity for Labour. For a start, it will finally convince the public that the Tories can never be trusted with the NHS: never again will a Tory leader be able to tell the British public "the NHS is safe with me". The problem is whether there will be any NHS left for a future Labour government to protect. The other problem is that GP commissioning is here and it cannot be removed and Labour attacking GP commissioning will be a losing battle. I am not saying that Labour should not oppose the plan, just that it should not expend too much energy on it. Instead, Labour should concentrate on Lansley's plans for providers. The plans to take all NHS hospitals out of public ownership; the plans to mandate that a fixed proportion of NHS paid work must be provided by the private sector; the application of competition law; the whole "any willing provider" policy. These are the areas where Labour must attack Lansley. They must attack these policies because they are wrong, and because the majority of the public are against them.

And one final point. Ed Miliband must pledge that Labour believes that hospitals and community health services should be publicly owned. Drop the "mutuals" idea because this is too close to Lansley's "social enterprises" idea. NHS hospitals should be publicly owned, publicly run and publicly accountable. Is that a simple enough message for Ed to understand?