INTRODUCTION
I would like to thank CIPFA for giving me the opportunity to speak to you today.
CIPFA’s members play a crucial role in maintaining this country’s high standards in local government, and in spreading best practice and delivering services.
But ultimately, it is the politicians who have to take responsibility for the state of our public services today.
As important as international issues like terrorism and Iraq have been recently, I remain convinced that the state of Britain’s public services will be at the top of people’s minds come the next general election.
Why? Because the public services touch us most directly. Seeing at first hand, the success and failures of our services is an everyday occurrence for most people.
It may well be that people’s personal experience of services like the NHS, is often better than their perception of the state of the service as a whole. But greater travel opportunities have allowed people to see at first hand how services are delivered in other countries.
It has become clear to many that over the decades, central government has failed to provide the long-term strategic climate for first class public services to flourish in Britain. In comparison with the services in many of our European neighbours, this country is not delivering the high standards of service that people expect and deserve.
This afternoon I hope to be able to address the central themes of this conference –
How should the process of reform be best structured?
Who should control the public services?
How can high quality staff be recruited and retained?
And how can people’s trust in our public services be reinvigorated?
By way of illustration, I would like to focus my remarks on the public service that traditionally is at the top of people’s priorities – the NHS – and, in doing so, to outline some of the new thinking that is taking place in the Liberal Democrats.
For the last half century, the NHS has been a magnificent emergency injury and sickness service. But the ways we live our lives in the 21st century, and the demands on budgets, mean that we must also concentrate on improving the standards of public health in general. In the long run preventative action saves money, and saves lives
I will flesh out the detail of these later. But first we should outline the challenges facing us?
FUNDING
Over the last decade, the Liberal Democrats have consistently argued that our public services were suffering from the failure of central government to provide long-term, guaranteed funding.
Having now won the argument for greater investment - with the latest Government spending review showing an injection of £200bn a year extra by 2005, compared with 1997 - the Liberal Democrats have now set out robust fiscal plans.
These not only maintain the extra investment, but by opposing Labour’s proposals for unnecessary Government schemes, like the Child Trust Fund, and by scrapping unnecessary central Government departments and functions– we have shown how an extra £5bn a year can be freed up for priority investment – without the need for tax rises.
Instead of the Child Trust fund, which will cost more than a billion pounds over a parliament, we should be investing that money where it is needed here and now to give children the best start in life - into early years education.
And by slimming down Whitehall, scrapping departments like the DTI and reallocating only the essential functions, we can generate an extra £5bn a year for priority investment. Moving the whole of the Treasury to Liverpool for instance would save £500m over a parliament in office rents alone.
So we have shown, it is no longer a question of taxing more to deliver investment, but of taxing differently and more fairly, delivering real power to local communities to address the specific problems in the services in their area.
The scrapping of the Council Tax and its replacement with a fair local income tax based on ability to pay would significantly contribute to local authority accountability and address the fundamental flaws in the Council Tax system. It would stop the poor paying more for their local services, as is the case under the Council Tax.
CIPFA’s contribution to the Government’s Balance of Funding review has been both constructive and progressive. I was disappointed therefore that Nick Raynsford’s address to your conference did little more than run through the options for changes in the Council Tax. The sticking plaster approach adopted by this Government to fundamental issues of reform will leave no-one satisfied.
If Labour thinks that after 7 years of Council Tax rises, that they can prevaricate over reform, they are sorely mistaken. The campaign to scrap the Council Tax will only gather pace, and Labour will be punished at the ballot box. People know the Council Tax is unfair and they won’t wear it much longer.
For the public services as a whole, the boom and bust that the Government claims has been eradicated from our economy, has not been matched by a commitment to sustained long-term investment in our public services which is so vital for planning. The NHS in particular has suffered badly from a finding cycle of boom and bust under successive Governments.
What is required is a clear commitment to a sustainable and secure funding stream. The Liberal Democrats have proposed an earmarked ‘National Health Contribution’ - replacing National Insurance - dedicated to health spending
For the NHS, the linking of revenue to service provision makes perfect sense. A single tax for the single service. It increases accountability and transparency. And it adds to honesty in taxation – by making it clear exactly how much each person is contributing to the health service.
This is a tax change not a tax rise. It does not require any increase in national insurance contributions to meet the current plans to fund the NHS, which we believe are sufficient to drive through the improvements required.
Of course funding in itself will not guarantee delivery, but stability of revenue will encourage the long-term planning and investment that is needed if standards are to rise and be maintained.
DELIVERY
With the three main political parties pledging to maintain the current investment in education and health, at first glance, the mantra would appear similar – investment plus reform equals better services.
But beneath the rhetoric, stark differences have emerged between the political parties, especially in the approach to the delivery of health services.
Labour pays lip service to localism but remains wedded to the straightjacket of central government control and targets. For them, the man in Whitehall still knows best.
The Conservative’s big idea – the ‘passport’ – has turned out to be little more than a public service exit visa for the well-off – those who can already afford it will be subsidised by taxpayers to go private. For the NHS, the main effect of ‘passporting’ will be to transfer much needed NHS money into the private sector.
There is no dogmatic view in my party against a robust and profitable private sector delivering local services, but for all Michael Howard rhetoric of ‘the right to choose’, the Conservatives have missed the point that flexibility and choice are only worth delivering if it means an opportunity for all – not just for the well-off.
Liberal Democrats have a deep commitment to the NHS. The core values of the NHS are as relevant today as ever. A service based on a person’s needs not on their means, a service free at the point of delivery regardless of age, sex or race. A common good funded by progressive taxation.
The NHS has successes every minute of every day, lives saved, and lives changed. The dedication and deep knowledge of the staff, doctors, nurses and managers is one of the greatest assets the NHS possesses.
Yet the current Government’s addiction to political target setting sends a powerful signal that Ministers distrust frontline NHS staff.
The culture of targets and tick boxes, which has become the hallmark of Labour, stifles innovation and undermines the ability of staff to use their own judgement.
Health trusts in Eastbourne may need to spend more on services for older people. In London, more funds might be needed for infectious disease.
But for Labour, reform is driven in Whitehall, with the Health Secretary micromanaging how local hospitals and GP surgeries are run.
The net result is money being wasted on unrequired services in one area, while they are desperately needed in another.
Again, the mantra ‘power to the frontline’ has been widely adopted. But letting go is proving difficult for this administration.
The temptation for politicians, who are judged by the public’s perception of the state of our public services, is to maintain tight control of the services against which they will be judged at the ballot box. That is natural.
But what Labour has missed is an appreciation of the level at which that control can be exercised in order to give local people a direct say in the quality of their local services.
Two things are required. First, liberating public service staff to get on with their jobs. And second, to make local services responsive to local priorities.
Firstly, freeing the professionals. Few doubt the quality of our health service staff. But chasing politically driven and centrally set targets has added significantly to their workload, and it distorts priorities that should be responsive to local needs.
The Health Department’s current role in defining national targets should be ended. Of course it should retain responsibility for performance measures, collecting data, auditing and minimum standards of care. But in order to allow public service professionals not only to employ their judgement but to concentrate on treating patients, the maximum scope for design and delivery of services should be at local or regional discretion, to which I will come shortly.
And in freeing our doctors and nurses, we need to restructure the professions so that they deliver an attractive package for recruitment, retention and career development. Last year, the NHS spent £1.4bn on temporary staff to plug chronic workforce shortages. We have to ask ourselves why so many qualified health workers prefer the flexibility, and in most cases, greater financial rewards of agency work, to the permanency of an NHS contract.
For non-medical staff, if successfully implemented, the Agenda for Change settlement negotiated by the Government will go some way to delivering flexibility of role expansion and local recruitment and retention. But we also need to redesign the career and care pathways of both medical and non-medical staff - widening the role of nursing and therapeutic practitioners; improving workforce planning and reducing the work load itself.
Why? Not only because the staff deserve it, but because the NHS now competes for staff internationally. Currently 28% of nurses in London are from overseas. The globalisation of the market for skilled staff is only just beginning. With greater mobility in an enlarged Europe, and with the United States struggling to fill a million strong nursing deficit, we can expect this global market to become more competitive.
One of the key tests for reform will be how far the public services are responsive to local priorities. That means paying more than lip service to devolution and making the NHS accountable to local people through local elections. The responsibility for the commissioning of healthcare should be transferred to local authorities for planning in local communities.
A HEALTH SERVICE FOR THE 21ST CENTURY
As I said earlier, I would like now to detail some of the new thinking taking place in the Liberal Democrats about the structure of our health services.
I have talked about the tax and funding reforms we would make to guarantee long-term stability for NHS funding. And I have outlined the way in which the delivery of real localism is possible.
But today I also want to outline a new approach to improving the health of the nation – one that addresses the changing demographics in our society – and also the role of Government in not only providing healthcare, but in tackling the causes of sickness.
Our approach starts from the basic position that it is best to prevent people falling ill in the first place. The health problems facing us in the future are more likely to be long-term conditions which require community support rather than acute illnesses which need one-off medical treatments.
The NHS will always be one of our foremost emergency services. Tackling injuries and acute illness, effectively and efficiently.
But with those aged over 50 in our society set to increase to around 40% of the population by 2020, compared to 32% now - and with the increasing pressures on our health services coming from life choices such as smoking, lack of exercise and unhealthy eating – we need to bring about a shift in emphasis.
And it is not only demographics and lifestyles that are contributing to ill health, but also poverty, poor housing and environmental degradation. This isn’t only about the Department of Health, but action across Government.
The NHS itself should not only be an emergency sickness service, but also a true sickness prevention service - promoting good health and providing health and social care in the community as well as in the hospital and surgery.
Health needs do not stop at the door of the doctor’s surgery. Social care and the NHS are two sides of the same coin. That is why it makes sense to bring these services together at a local level. Patients deserve a seamless service. It makes sense to merge the NHS with social services for the local community. This would allow agencies to work together to fit the services to the needs of the individual.
Our proposals would also give councils the freedom to link up health services with public health initiatives. For example, a doctor could prescribe exercise at the local leisure centre. Councils could team up with the local football club, as is already happening with Arsenal in Islington, to provide community health or leisure services. We would harness the power of local authorities to improve the health of local communities.
Investment through local communities and initiatives to promote health and prevent illness will reap financial, as well as health benefits. For example, improving screening and education to prevent sexual infections could save millions on drugs and fertility treatment.
This September we will be putting forward a package of measures to tackle the root causes of ill health not just treat the symptoms. Education can play a vital role in increasing ‘health literacy’, giving people the knowledge and power to control their own health. This means strengthen teaching in schools and information for adults on health issues and on how the health service works.
With obesity rapidly catching up with smoking as the number one preventable cause of disease and death in this country, it means that we need to look at the way food is packaged and sold. For instance, I would favour clear food labelling for salt, sugar and fat.
But Government cannot, and should not, do everything. In a liberal society, everyone, not just the educated, should have the freedom and opportunity to improve their own health.
But Government can make it much easier to allow people to track their health and adjust their lifestyles, especially as they grow older. This means expanding screening to catch diseases early and preventing them becoming acute and costing the NHS dearly.
The time has come for targeted ‘health MOTs’ for individuals, delivered through our public services. The National Institute for Clinical Excellence should develop health MOTs, with appropriate screening tests based on a persons’ age and risk factors. This could be delivered locally through partnerships with other organisations, providing outreach into the community, for example in pharmacies or supermarkets.
Ill health can only be tackled early if local health services have the capacity to deal with them early. Most peoples’ experiences of the NHS will not be of hospitals. It will be of the GP surgery, or the visit from the district nurse. This is especially true for the millions of people in Britain today who are living with chronic diseases, like diabetes. The NHS needs to be much better at caring for the needs of these people. And that means helping people to stay out of hospital, helping them to improve their quality of life and to manage their own condition.
For instance many operations nowadays do not need someone to stay overnight in hospital. An increase in day surgery would free up hospital beds for people who really need to stay in hospital. Community health services and day surgery should be prioritised so that people can get healthcare closer to home.
CONCLUSION
So with the health service, as with the Liberal Democrat’s general approach to governance, it is about putting power into the hands of local people.
Our brand - fairer taxation for investment; a commitment to the integrity of our public services; and a true commitment to localism – sets us apart from the other parties in the debate that will decide the outcome of the next election.
CIPFA has an important role to play in this debate. And I hope today, that my contribution to this successful conference will encourage a greater interaction between my party and those of you here, the experts, policy makers, and the people who actually deliver the services, who have the best interests of our country at heart.
Thank you
ENDS
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