So what will the NHS have to do for this new money?

First let’s be clear that this money and the amount are not the result of rational calculation following lobbying from think tanks. This is a political settlement and a consequence of electoral politics. For the past year the politics of failing the NHS have driven deep into the heart of the government. They know that the main public narrative about the NHS has been a combination of the word ‘crisis’ with the phrase ‘lack of money’. Conservative governments understand that when the electorate’s mind forms these words into a sentence they have a real problem.

They know too that, even in the fag end of the age of austerity, electoral politics trumps calculated planning.

There is one very different aspect to this round of the politics of giving more money to the NHS, and that is the recent silence from the right wing of the Conservative Party. On every other occasion when increases have been mooted there has been a loud rejection of the argument from the Conservative right.  Over the last few weeks only the Daily Telegraph has maintained this lonely vigil with daily articles (example) pointing out the problem of waste in the NHS. But there has been no echo from the Conservative benches.

And we all know why. During the Brexit campaign leavers discovered the importance of the NHS to the public and pledged more money for it from the ‘Brexit dividend’. Most of the right of the Conservative Party, in a unique historical moment, is therefore desperate to spend more money on the NHS. This has dramatically changed the political terms of trade on this issue.

Given the sum of money involved there will need to be some sort of deal about what it is to be spent on. No one should ever be given tens of billions of pounds without there being some form of contract of what that money will buy. There will be those within the NHS, and within think tanks, that will feel that it is unreasonable to expect extra activity for these billions – they will go on maintenance, old debts, salary uplifts and the general need to get the system to meet the targets it has not been meeting in recent years..

But they are morally, as well as politically, wrong. The English people will expect something for this money and they will be right to do so. Libraries will close; teaching assistants will be sacked; neighbourhood police will be missing and we will still be waiting for aircraft for our aircraft carrier. The opportunity cost of this money for both individuals and families, and for other public services is considerable.

One of the reasons I think this form of public contract is important is that I was around and close to the centre of Government the last time there was a large long-term increase in money for the NHS. In February 2002 Tony Blair famously announced on the Marr programme that he felt NHS expenditure should rise to the average of European health expenditure as a percentage of GDP.

Gordon Brown was not best pleased to have had his budget stolen, but what I remember most about my following week in Alan Millburn’s room at the Department of Health was the very large annual sum of money over a long period that the NHS was going to get. Since Tony Blair had come to power in 1997 the NHS had had 4 difficult years in terms of money with an uplift in 2001 – and so the billions of pounds this announcement meant spending was staggering.

In 2002 the NHS Plan 2000 was available to base any expenditure on. This was a detailed plan for both outputs and structures and it had gained political weight by having been a part of the Labour Manifesto in the 2001 election. The House of Commons majority of 140+ was a big mandate for carrying this out.

So there was a lot of policy on the stocks – but between the Marr programme announcement in February and the budget, there needed to be a lot of negotiation about what that money would actually buy. OK we already had some tough targets for maximum waiting times as a major part of that contract – but what else?

During those weeks, I spent a lot of time across the road in the Treasury, as Alan Millburn’s special adviser, dealing with my equivalents to work out what the deal would be. Then as now the sum of money had been agreed – but what would it buy for the British people?

The whole point of these discussions was to make any contract public (after all, in 2002, the public were paying an extra penny on National Insurance and they needed to know what they were going to get for their money).

These negotiations became ‘Delivering the NHS Plan

At the time there were some in the NHS that felt it was odd to tie yourself to a contract which would make your life harder. Why not just take the money? But then, as now, it’s not the NHS’s money to spend – it’s the public’s and they want a clear idea of what they are going to get for their money.

This week I will be exploring what I think should go into that contract and how it needs to think about its delivery.

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