Health spending – less is more – by Edward Leigh MP

portrait-edwardleigh.jpgToday’s news on waiting times for hospital treatment is a headache for the Government. The average wait has increased under Labour from 41 days when they came to power to 49 days now.

This report should inform the Conservative Party’s debate on how much to spend on health when in government.

The figures – from the NHS information centre – even apply to some people with cancer. This is in spite of health spending increasing massively over Labour’s time in office.

The health budget is projected to reach over £105 billion [sic] this year. Jack Straw boasts that they’ve tripled the NHS budget since they came to office. Big is beautiful, it seems.

But ONS figures show that in spite of this splurge, NHS productivity has declined in the last five years. From 2001 to 2005 it has fallen by 2 per cent a year on average. People are beginning to realise this. Taxpayers are getting increasingly little bang for a huge amount of their bucks.

On top of this, the National Audit Office last week stated that GPs are now only seeing an average of 88 patients a week – 34 fewer than in the early 1990s.

That’s a drop of nearly 40 per cent.

This clearly raises questions as to whether you can see your GP when you want to.

Dr James Le Fanu, writing in the Sunday Telegraph reckons that if they spend 7 minutes per consultation, a family doctor working a four-day week is actually seeing patients for just two hours a day. Even if his estimate of 7 minutes is somewhat less than the 11.7 average reported by the National Audit Office, the point holds good; in fact it means even fewer patients are being seen than he implies.

The rest of a doctor’s time is spent filling in the endless shower of forms created by the Government.

And on the new contracts for GPs, the Government ‘only’ meant to spend £18.74 billion. But, says the NAO, spending over the three years from 2003-04, ran to £1.76 billion more than that.

Meanwhile the rate of overspend increased every year.

In another area of the health budget, it is officially estimated that the much-vaunted IT programme could cost as much as £20bn.  

But that’s by no means the only case of wasted money. They’ve overrun on their pharmacy contracts by £811 million.

So where is all the money going?                                                                               

Some of it went on paying GP partners – those who own and operate their practices, as opposed to their salaried GP employees (who have ended up working longer hours for only 3 per cent more pay) – more to do less work.

Over three years since the GPs’ contract was fully implemented (April 2004), the partners’ average earnings swelled from £72,011 to £113,614. Or 21 per cent a year.

And between 1996 and 2006 the number of managers in the NHS grew by almost 73 per cent, while the number of qualified clinical staff only increased by 31 per cent.

And from the start of this decade to 2005, the NHS employed an extra 40,000 administrative staff.

Does anyone really believe that this is an efficient use of resources?

In polls taken last summer it was clear that over two thirds of voters thought the Government was making poor use of the money it spent on public services. 65 per cent thought the Government had spent it ‘badly’. Just 29 per cent – less than a third – thought it had spent it ‘well’.

Even most Labour voters agreed with this assessment, 46 per cent saying the money had been badly spent, as against 38 well.

[Yougov: poll of 2,000 adults, Aug 2007 for Taxpayers’ Alliance]

So, knowing all this, it’s good to have a debate on our pledge to match Labour’s spending for the next three years. Hopefully the Prime Minister’s likely instinct to delay an election to the last possible moment will mean that this doesn’t hurt us much in terms of actual tax-and-spend – but what message does it send out to the country at large, and to those we wish to convince?

And why did Shadow Health Secretary, Andrew Lansley, feel it necessary to echo the Government’s former advisor, Derek Wanless in saying that, due largely to an ever-ageing population, we would actually have to make the equivalent of an increase in NHS spending by £28 billion?

Of course we all understand the need not to give Labour ammunition for their usual game of crying ‘Tory cuts’, but statements like this have already backfired.

Now they are coming at us from the other direction.

Already Health Minister Ann Keen has said it is ‘irresponsible’ for us to make ‘unfunded and uncosted spending promises on maternity services that [we] cannot deliver.’ And from another department, David Hanson, the Prisons Minister, has just reacted to our latest announcement on building 5,000 more jail places than Labour by accusing us of ‘yet another uncosted spending commitment.’

A Conservative opposition is being attacked by a profligate Labour Government for planning to be profligate with public funds.

Is that what we were secretly yearning for, to finally lose the taint of being seen as ruthless slashers of services?

If so, it seems to me we are in danger of paying too high a political price for a goal which is dubious, to say the least.

Particularly as Mr Lansley conceded that we would have to pay for this with reductions in spending on other departments – ‘Tory cuts again’.

The worst of both worlds.

The solution

I believe the solution for the next Conservative Government is to do what the last Conservative Government did. When we were in power (1979-1997), our average annual increase in health spending was 3.4 per cent above inflation, to account for such factors as the ageing population and the rising cost of medical equipment and supplies.

So if Andrew Lansley was promoting relatively modest increases such as this, that’s fine by me. Clearly it worked before; what we don’t want is to go back to the days of 6 per cent above inflation, as Labour has been doing in the ten years they have been in power

By any realistic reckoning, their investment has not paid off.

But anyway, I don’t actually believe that health was such a damaging issue for us at the last election. Of course, people often tell pollsters they want both tax cuts and increased health spending. Contrary to some commentators’ allegations, this is not a contradiction.

As I have said once or twice before, you can have better public services if you are prepared to make real efficiency gains.

We seem to have been stung a few times already by not grasping this particular nettle firmly enough.

Let’s uproot it once and for all.


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