Everything we hold dear is being cut to the bone. Weep for our country

Will Hutton in The Guardian


Last Thursday, my wife was readmitted to hospital nearly two years after her first admission for treatment for acute lymphoblastic leukemia. She is very ill, but the nursing, always humane and in sufficient numbers two years ago, is reduced to a heroic but hard-pressed minimum. She has been left untended for hours at a stretch, reduced to tearful desperation at her neglect. The NHS, allegedly a “protected” public service, is beginning to show the signs of five years of real spending cumulatively not matching the growth of health need. Between 2010 and 2015, health spending grew at the slowest (0.7% a year) over a five-year period since the NHS’s foundation. As the Health Foundation observed last week, continuation of these trends is impossible: health spending must rise, funded if necessary by raising the standard rate of income tax.

There will be tens of thousands of patients suffering in the same way this weekend. Yet my protest on their behalf is purposeless. It will cut no ice with either the chancellor or his vicar on earth, Nick Macpherson, permanent secretary at the Treasury. Their twin drive to reduce public spending to just over 36% of GDP in the last year of this parliament is because, as Macpherson declares more fervently than any Tory politician, the budget must be in surplus and raising tax rates is impossible. Necessarily there will be collateral damage. It is obviously regrettable that there are too few nurses on a ward, too few police, too few teachers and too little of every public service. but this is necessary to serve the greater cause of debt reduction.

To reduce the stock of the public debt to below 80% of GDP and not pay a penny more in income or property tax, let alone higher taxes on pollution, sugar, petrol or alcohol, is now our collective national purpose. Everything – from the courts to local authority swimming pools – is subordinate to that aim.

Not every judgment George Osborne makes is wrong. He is right to advocate the northern powerhouse, to spend on infrastructure, to stay in the EU, radically to devolve control of public spending to city regions in return for the creation of coherent city governance and to sustain spending on aid and development. It is hard to fault raising the minimum wage or to try to spare science spending from the worst of the cuts.

But the big call he is making is entirely misconceived. There is no economic or social argument to justify these arbitrary targets for spending and debt, especially when the cost of debt service, given low interest rates and the average 14-year term of our government debt, has rarely been lower over the past 300 years.

This is not to contest the need to balance current public spending and current revenues over the economic cycle. As I wrote in my first book, The Revolution That Never Was, completed 30 years ago this month, Keynes was no deficit denier. But governments have choices about how they arrive at this outcome.

The Conservatives’ choice is driven by a refusal to see any merit in public activity: in their worldview, the point of life and the purpose of civilisation is to celebrate and protect the private individual, the private firm and private property. The state should be as small as possible. It has no role, say, in owning Channel 4 to secure public service broadcasting; it will be privatised with scant care about its ultimate owner. Equally, there was no point in holding the 40% stake in Eurostar, forecast to generate more than £700m in dividends over the next decade and a good payback for £3bn of public investment. Thus it was sold for £757m in March, the government concerned to get the sale through before the general election. You could only proclaim a £2.25bn loss on the public balance sheet and the surrender of £700m of dividends as a “fantastic deal for UK taxpayers”, as Osborne did, if you see zero value in public activity.

It is this philosophy that will drive the choices to be laid out on Wednesday. The spending of the so-called protected departments – the £189bn spent this year on the NHS, schools for five- to 16-year-olds, aid and defence – will rise in cash terms in line with inflation, but only to buy the same in 2019-20 as it does today, an unprecedented decade-long freeze in real terms. The block grants to Scotland, Wales and Northern Ireland will be hit slightly harder, protected only in cash terms, implying, after adjusting for inflation, a small real fall. The axe therefore has to fall on what is left – £77bn of spending by 15 departments along with non-school spending.

So if we take the summer budget and Office of Budget Responsibility economic forecasts as the baseline (both may change) – and there are no new tax increases – to meet his target, the chancellor has to find £22bn of cuts from this £77bn, crucial areas of our national life that have already cumulatively been cut by 30% since 2010.

As the Resolution Trust points out, seven of the smaller departments have settled for 21% cuts, which leaves the big five – Business, Communities and Local Government, Justice, the Home Office and non-schools education – to bear the brunt. This can only mean the de facto wind-up of the Department for Business as a pro-active department, further shrinkage of the criminal justice system (mitigated by prison sell-offs), local government reduced to a husk and the knell of further education. Meanwhile, the cuts in welfare will hit the wellbeing of millions, including their children. Expect on top a firesale of government assets – from housing associations to Channel 4.

Is this wanted, necessary or appropriate for these profoundly troubled times? I think it’s a first-order category error and that in 2015 the need – whether protection from terrorism or the promotion of innovation and investment – is for complex collaborative action between a properly resourced, agile public sector and a private sector in desperate need of remoralising and repurposing. There is no magic in a 36% state. But as Osborne knows, he is politically free to do what he wants. The leadership of the Labour party offers no substantive intellectual or political opposition, nor represents a potential governing coalition, nor, wedded to a bankrupt simplistic top-down statism, understands the complexities of these new times. Rarely has the principal opposition party been so irrelevant at a time of national need. All that is left is noises off – the odd newspaper editorial or column and civil society and business beginning to stir as they experience the impact. Weep for our country.

Junior doctors are victims of an NHS that’s broken beyond repair

The rest of the world has more sensible healthcare funding – so the medical brain drain will get worse

Allister Heath in The Telegraph

Hospital doctors are right: they are not paid enough. This is one of the few issues on which I agree with Jeremy Corbyn and his socialist comrades. But the doctors are wrong to blame the Tories and must resist the urge to back a strike, a cruel and selfish act that would hurt our society’s most vulnerable in the run-up to Christmas.

What the Left and some of the younger doctors, sadly, do not grasp is that the problem is the National Health Service itself: it is broken beyond repair, short of cash and talent, an obsolete monopoly that works neither for its consumers (as yet another OECD report has confirmed) nor for its staff. It is unable to provide us with the level of personalised, responsive care we increasingly require and expect, and it is incapable of paying its staff enough.

The crisis is structural and inevitable with a “free” service. There is too much demand and too little supply; and no mechanism other than rationing, queuing, reduced quality and artifical cost suppression to reconcile the two. The UK’s hospital doctors have fallen victim of the latter force: they earn far less than the global rate, an unsustainable situation in an increasingly international medical marketplace.

Specialists in the UK make just over half what they do in America, and less than their counterparts in Australia, Canada, France and Germany, according to the seminal study on the subject by David M Cutler and Dan P Ly of Harvard University, published in the Journal of Economic Perspectives. The two academics conclude that “the one major country that appears to be paying its physicians too little is the United Kingdom”, a remarkable statement given the thoroughness of their research. One consequence of Britain’s excessively low medical wages, they argue, is that the UK is losing much of its homegrown talent and has had to import 28 per cent of its doctors from abroad to compensate.

Adams cartoon, 5 November

Other research backs this up. The most up to date figures from the OECD show that specialist doctors in the Netherlands, Ireland, Denmark, Luxembourg, Israel, Finland and even Turkey earn more than their British counterparts, once adjusting for the purchasing power of their wages. As to junior doctors, Canadian starting salaries are between 14 per cent (in Quebec) and 49 per cent (in Alberta) higher than those in the UK when adjusted in the same way. It costs much less to live in (say) Texas that it does anywhere in the UK, so even in those cases when cash salaries don’t look that much higher abroad they often generate a much better quality of life.

The Left, as ever, is gunning for the Tories. That is silly: the global pay gap was pretty much identical under Labour. Jeremy Hunt, the secretary of state for health, is being unfairly demonised for trying his best to paper over the NHS’s inherent contradictions: there’s not much more he can do given the dire state of the public finances, the need to improve its appalling out of hours service and the debilitating public and political consensus against any meaningful reform of the way healthcare is delivered and paid for.

Nothing will ever be enough when it comes to the NHS: it will always need more resources than any government can ever afford. The government is actually being disproportionately generous to health, forcing dramatically deeper cuts elsewhere. Forget also about the delusional Corbynite view that the rich or the corporate sector could easily be tapped to the tune of tens of billions of pounds, with no negative side-effect, to “save our NHS”: Britain's tax base is already being sucked dry. Nothing more of substance can be wrung out. The fiscal goose is bald and needs a good break, not another plucking.

The only way to spend more on health as a share of GDP - on fresh technologies and medicines for an ageing population, and to retain top talent - is to allow and encourage consumers to dip their hands into their own pockets, while making sure that the poor are protected, as happens in most other countries. Instead of relying exclusively on the state, we need to embrace a much greater use of insurance schemes and cash payments; most individuals must become co-payers. We also need to shake up the provision of healthcare: in Germany and France, a third of hospital beds are provided by the private (including not for profit) sectors, entirely uncontroversially. Until we are able to introduce these sorts of reforms, the gap between what we can afford to pay our medical professionals and what they would earn overseas in more sensible health systems is likely to grow - and our brain drain will intensify.

The number of UK-trained doctors working in the US shot up by 22 per cent over the most recent five years for which data is available, according to the OECD; numbers have risen by a similar percentage in New Zealand. At last count, 13 per cent of all GPs in Australia and 22 per cent of all specialists came from the UK, according to the Australian Bureau of Statistics. Doctors going to work abroad may need to show their future employers a Certificate of Good Standing from the General Medical Council; the number of British medics applying has risen every year since 2009.

Yes, the NHS’s deckchairs could be rearranged yet again, eking out the odd improvement and buying another couple of years before the next great crisis. Or we could simply accept that thousands more UK medics will up sticks, and launch another overseas medical recruitment drive. At some point, however, even physicians from poorer nations won’t want to come here: their own countries are becoming richer, and other medical systems will become ever more attractive.

The angst of Britain’s doctors is merely the latest reminder that Nye Bevan’s NHS, far from being the envy of the world, is slowly dying. We need to stop deluding ourselves, and begin to debate openly what a world-class British health system fit for the 21st century would look like. My own vote would be for a cross between the Swiss and Singaporean systems. What isn’t in doubt is that time is running out: when the public eventually realises that it has been misled, its lust for revenge on the political class will be unquenchable.

Nhs in NUMBERS

NHS deficits in England

£930 million

The combined deficit for NHS trusts in England for April-June 2015

4 in 5 NHS trusts

in England reported a deficit for April-June 2015

31 mental health trusts

were in deficit, as were 10 specialist trusts, nine community trusts and eight ambulance trusts

42% increase

The number of patients at foundation hospitals waiting longer than six weeks for diagnostic tests is up by almost a half (42%) on this time last year, to 10,800

56% of foundation trusts

The number of trusts not meeting the 62-day target for cancer referrals from GPs is up over a half (56%) on this time last year

29,000 people

at foundation hospitals waited on a trolley for more than four hours between the decision to admit them to A&E and their arrival on a ward. This was over a third (35%) higher than the same period last year