Editor’s blog: Time to cut the £120bn NHS budget?

With the Government now in the capable hands of Peter Mandelson, the reformed Prince of Darkness, the news this morning that there will be no major review of public spending before a general election comes as no surprise. It would hardly be a vote-winner in Labour heartlands to announce that government spending is heading for a squeeze. But it’s a squeeze that is inevitable, given that next year the Government is planning to spend 4 for every 3 it takes in tax. The alternative is us all winding up in the IMF poorhouse.

There’s no doubt that this tightening is going to hurt. Just how moribund the private sector has become in parts of the UK is revealed today by the Centre for Economics and Business Research. Around two out of every three pounds spent in the North East and Wales will come from the taxpayer next year. The continuing basket case that is Northern Ireland expects 69.2% of its GDP to come from government in 2010/11. No doubt there’ll be a few extra million for more Youth Workers to help explain to those Belfast charmers from last week that stoning and burning Romanian gypsies from their homes isn’t a very nice way to behave.

I’ve just interviewed David Nicholson, the CEO of the NHS
and the boss of the largest organisation in Europe by a mile; it has 1.3m employees and is the biggest spender of our money. Understandably, Nicholson acknowledges there are going to be some tough times ahead, although no Government minister has the spine to admit as much. The BMA (the doctor’s union) is already spreading panic by issuing a poll this morning saying that 77% of the public believes that cuts should be made in other government departments to protect NHS funding. They even go as far as to state that four out of ten members of Joe Public believe taxes should be increased to maintain the growth of NHS spending, which has been running at an extraordinary 11% per annum.

When it comes to a mixture of craftiness and emotional blackmail to support its members’ interests, the BMA has no equal. Not even Bob Crow or Scargill at his most strident come anywhere close. The pay deal with which it managed to blindside Patricia Hewitt, the then Health minister, was breathtaking in what it got away with – but you’ll find no talk of clawback.

It’s been said that coming in on budget for the NHS is akin to trying to land a 747 on a postage stamp. Indeed, after the overspend disaster of 2006 which claimed Nicholson’s predecessor, Nigel Crisp, the NHS has run a surplus. It’s true that there are colossal amounts of waste in less vital parts of government activity than health. But it’s also true that within an organisation that burns its way through 120bn a year, it must be possible to make savings when times turn very nasty, as they have done now. In 90 seconds of browsing NHS jobs this morning, I found a Deputy Director of Performance and Informatics for Bournemouth and Poole PCT, for which Nicholson is willing to shell out 79,000 a year. Who’d notice if this went unfilled for 18 months?

In today’s bulletin:
MT’s ’35 Women Under 35′ 2009
Vodafone sniffing around T-Mobile’s UK arm
Government bail on Royal Mail sale
Editor’s blog: Time to cut the 120bn NHS budget?
MT Expert’s Ten Top Tips: How leaders should communicate in a recession

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    A potential saving of £1,000.00 in around 1.1 seconds – in the words of a song – what a difference a day makes! Or could, if anyone wanted to try.

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    You are so right about Patricial Hewitt and the BMA. How someone could misplay the hand she was dealt is beggars belief. Labour were so popular, and the medical profession was completely on the backfoot – in the wake of PR disasters like the Alder Hey organ storage scandal and the very charming Dr Harold Shipman, not to mention the syringe happy nurse whose name escapes me but who took it on herself to shorten old people’s lives with morphene.

    Instead of standing up for investment in patient care, Hewitt let way too much go on salaries. Spineless, incompetent, or both?