Conservatives created the NHS ‘bureaucracy’ they are now attacking
11:13 am - February 25th 2011
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contribution by Jon Taylor
The Tories talk a lot about how the public sector has become bloated, according to them, it has become ‘weighed down by bureaucracy’.
But is Tory policy not responsible, at least in part, for creating the bureaucratic system we see before us today? I think it’s about time the left started to challenge the notion that bureaucracy is solely a left-wing phenomenon. It’s not.
Ironically, in terms of the NHS, much of the bureaucracy at which Lansely directs his venom was borne out of the purchaser-provider split. A policy initiated by the Tories in 1990, and regrettably not reversed by Labour in 1997.
This move, for the first time, established the internal market in the NHS. The idea being that competition would drive up quality, productivity, and efficiency.
There is no evidence that this has happened. There is evidence, however, that the purchaser-provider split has led to a huge increase in transaction costs, notably management and administration costs.
Currently it is predominantly Primary Care Trusts (PCTs) that are responsible for commissioning or purchasing services on behalf of us: taxpayers and patients. Within PCTs sit many of these bureaucrats whom the Tories like to blame for the various failings of the NHS.
These ‘commissioners’ are responsible for purchasing services from another group of bureaucrats based in provider organisations; contract managers, accountants and a like. These people perform a critical function. They manage financial transactions.
It is hardly surprising; therefore, that, as the market has become embedded in the NHS, the number of people needed to manage transactions has shot up. The moment we introduced the market we began to need people to manage money flows, negotiate contracts, and administer financial transactions.
It is for this reason that the Tories ‘war on bureaucracy’ is disingenuous populism.
The Department of Health’s own unpublished figures indicate that transaction costs resulting from the purchaser-provider split account for 14% of total NHS costs. This is money that could be spent on frontline care.
Lansley knows very well the function performed by the bureaucrats he loves to pretend to hate. He also knows that opening up the NHS to ‘any willing provider’ will increase transaction costs and, as a direct consequence, increase in bureaucracy.
Although ‘officially’ they will no-longer be on the government pay roll, the tax payer will still be paying for them from the cash handed over to private firms by GP’s.
However, in 2013 the government will be able to declare a great victory. Lansley can claim to have defeated his great nemesis – bureaucracy. He can hold up the private sector as our saviour.
The private sector, according to him I’m sure, will have come to our rescue by re-employing and rehabilitating these lazy, good for nothing, parasitic, public sector pen pushers.
Therefore, rather ironically, Andrew Lansely will actually need to recruit more people to his rapidly expanding army of demoralised x-public sector bureaucrats in order to deliver his longstanding and well documented ambition: wholesale privatisation of the NHS.
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Jon Taylor works in the NHS for a Cancer Network, and is a trade unionist
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Reader comments
“But is Tory policy not responsible, at least in part, for creating the bureaucratic system we see before us today?”
Hang on.
I thought these were all “key back office support” and therefore indispensable???
So there is a way to cut these jobs, just not the Tory way?
But of an obvious point cjcjc, but I think you missed it. You can create a system that has increasing transactions (ie, marketise it) but that comes with more ‘bureaucracy’. But you can’t marketise even more AND cut bureaucracy in a way that doesn’t jeopardise care for people.
You may be right.
CJ @ 1
So there is a way to cut these jobs, just not the Tory way
Sure you could cut all those jobs, all you have to do is revert the NHS back to a simpler system, i.e. back to the pre ‘internal market’ reforms of the Thatcher era. Surely you would concede that attempting to get back to the manager/admin levels of the 1980s is a complete non starter unless you remove the very reason that these structures are in place?
Can you explain why no-one among the rank and file Tories has anyone admitted that the so called ‘internal market’ was flawed?
In, fact, can anyone explain why no-one in the Labour Party has pointed out that the internal market was a Tory idea in the first place?
Yet again Labour’s abject failure to understand the issues has left them defending the Tories’ mistakes from attacks by the Tories. This is a pattern that has been repeated from bank deregualation, the move from unemployment to Incapicity benefit, the closure of the manufacturing base and everything else. The Tories fuck up and ten years later the Tories barrack the Labour Party for the fuck up and the Labour spokesman quitely ‘umm’ and ‘ahhs’ on ‘Any Questions’
Some say the internal market in healthcare was dreamt up in a radical bid to stop Thatch from privatising the NHS?
http://www.hsj.co.uk/internal-market-was-only-way-to-stop-thatcher-privatising-nhs/26572.article
According to Allyson Pollock “for more than 40 years administration costs were in the order of 6% of the total budget a year, they doubled overnight to 12% in 1991 with the introduction of the internal market. We have no data today for England, but what we know from the US is that the introduction of for-profit providers increases administrative costs to the order of 30% or more”.
http://abetternhs.wordpress.com/2009/09/07/allyson-pollocks-response-to-mckinsey-guardian-04-09-09/
Pre-election (1997) NuLab made noises about abolishing the internal market
http://www.bmj.com/content/312/7042/1318.3.extract
But the temptation to maintain a business model in the NHS ultimately proved too tempting for the tory-lite brigade.
A&E CN @ 5
But to be brutually fair to Labour, the last thing the NHS needed in 1997 (and now for that matter was a further) total scrapping and a reformation of the system. There are sometimes, but only sometimes when you have to concede that you can only piss with the cock you have got and try and make a fist of a ‘bad’ system rather than uproot the whole lot and start again.
Tories never trust the workers, so they will always come up with a corporate bureaucracy to monitor the people. In the state sector it is called wasteful bureaucracy ……in the private sector it is called Middle management. Companies who swear blind they can not afford to pay a penny in tax spend billions on employing middle managers to re arrange the deckchairs.
Management Consultants spinning their whit craft, all across the private sector, and now sadly in to the public sector. 21 year old, spotty thrusting nincompoops who can’t even cook their own breakfasts suddenly descend on organisations and tie them up.
Good stuff Jon, enjoyed the piece.
Will have to really avoid entering in the debate as this is the English NHS not the Welsh, but I am comforted that the Plaid/Labour Government have not only avoided the internal market, but ended PFI in the Welsh NHS.
Lansley’s plans, as per the centre-right approach in England across all three parties, are about privatising the profits, nationalising the losses.
[8] “privatising the profits, nationalising the losses” – now that is a very astute observation.
@ 4 Jim
“Can you explain why no-one among the rank and file Tories has anyone admitted that the so called ‘internal market’ was flawed?”
Oh yeah, that’s really going to happen. They aren’t known as the Stupid Party for nothing. The internal market in the NHS is just another example of an ideologically generated concept that some hard right wonks managed to persuade the “nice but dim” Tories was a jolly good idea. Bit like the Big Society really…. let’s just hope they don’t get the opportunity to make as much as a hash of society as a whole as they did of the NHS eh?
“But is Tory policy not responsible, at least in part, for creating the bureaucratic system we see before us today? ”
It is indeed. As implemented by every government since Thatcher.
I have graphed the number of managers here (full article here).
“Management” in the NHS started in 1985 after the implementation of the Griffiths report (which said, and I paraphrase “Oh My God how can you run an organization without a gazillion managers, get ‘em in NOW”).
What is immediately apparent from this graph is that the rate of increase in the number of managers actually slowed under Labour. From 1988 to 1994 there was a sharp increase, year-on-year, in the number of managers. There was a drop in 1995 and then a slower increase until 2002 when the rate increased again. The rate of increase between 2007 and 2009 was comparable with the Tory rate between 1988 and 1994.
It’s right wing policy to create things they later attack – immigration, any number of dictators, the alleged ‘demise’ of the wwc.
Its the only way they can stay vaguely relevant.
The Tories may have created it but that makes Labour look even more useless by continuing it for thirteen years…
The market creates far more “bureaucracy” than anything outside a purestrain Stalinist economy, and health services are a case in point. The market-based USA health system has far, far more “office-based” staff than in the UK. Markets need more salesmen, more lawyers, more ad-men, more managers, sub-managers, contractors and sub-contractors, and all the resulting admin support necessary for all these. That’s why the US health system costs twice as much as the UK in terms of percentage of GDP, while middle-income earners still get screwed over basic operations, and the poor, of course, are free to fuck off and die.
I never thought I’d agree with anyone using “Stalinist” in a positive sense, but Arthur makes a damn good point there,
I went to A+E tonight. Cat had scrammed me, and friends advised me to get a tetanus jab and antibiotics as skin around wound had gone red.
Friday Night A+E. Non emergency case, just before closing time. Yet I’m seen in 10 minutes, and given the medication straight away.
How does this service compare to other countries in terms of average waiting time for non emergency cases?
@ Planeshift
I’m on your side here, but I’ve never spent less than two hours waiting in A+E in my life. Whereabouts are you, out of interest?
Royal Glamorgan Hospital. About 10 mins up from J34 of the M4.
Okay, what kind of ratio do other organisations have with regard to managers/admin/workforce? I accept that looking after millions of patients is different from ‘stacking shelves off baked beans’, but how does the local Tescos compare with the local hospital? More to the point how does a hospital in France/Germany/USA compare to a hospital here?
BTW, whenever the NHS is discussed, why do we always start of with ‘about the same size of the Chinese Army/Indian Railway etc? Surely my local hospital is reasonably autonomous? I mean, surely the catering isn’t directly being overseen by Whitehall? It is surely not the case that Lansley is phoning up every morning and saying ‘Ms Smith ward seven bed four, yes, rice crispies, toast and tea, no jam mind’, surely it is not beyond the wit of Government to allow the management of each hospital, trust, health centre to run itself?
“Okay, what kind of ratio do other organisations have with regard to managers/admin/workforce?”
I believe around 12% of NHS staff are on the management/admin side, compared to around 15% of the UK’s workforce as a whole. So its bureaucracy is not as bloated as is often made out. (That’s not to say it couldn’t be smaller still if it weren’t for marketisation and the purchaser-provider split, which I guess is why the private sector needs so many bureaucrats.)
15. Arthur Seaton – “The market creates far more “bureaucracy” than anything outside a purestrain Stalinist economy, and health services are a case in point. The market-based USA health system has far, far more “office-based” staff than in the UK.”
Yes but the American health system is almost unique. Why not look at the Singaporean system? Which is a mixed public-private system but one that costs less than half of what the British one does? Or the British system before 1945. Which did not have a lot of office-based staff.
“That’s why the US health system costs twice as much as the UK in terms of percentage of GDP, while middle-income earners still get screwed over basic operations, and the poor, of course, are free to fuck off and die.”
Middle-income earners get more health care than they know what to do with in the US. Over-prescription, especially of services, is rife. And the poor are entitled by law to medical treatment.
Luckily, we have an excellent system to compare the differences between an NHS based on internal markets and an NHS based on integration.
The NHS in England is based on internal markets with provider competition, and the NHS in Scotland and Wales is integrated, because the devolved governments decided to revert to the pre-1990s model.
So, what happens? Well, the NHS in England is *cheaper* than in the devolved countries, has better wait times and response times, and higher doctor and nurse productivity. Meanwhile, there are no criteria on which the NHS in Wales or Scotland outperforms the NHS in England.
In other words – the internal market may have transaction costs, but the efficiency improvements that it creates far outweigh these costs. Each manager generates more value (by ensuring that doctor time, nurse time and resources are used efficiently) than they cost to employ.
@23 John B,
Interesting link – although annoyingly it’s an editorial that points to various studies and thus doesn’t show the evidence, which makes it difficult to critically appraise.
However, I don’t think this is actually the key point because;
1. The provider/commissioner split in the NHS is here to stay. At least for the moment.
2. The internal market is the primary reason for the increase in bureaucracy in the NHS.
3. The Conservatives are the primary cause of this increase (see Richard Blogger’s link)
4. So, as the article says, the Tories are attacking a bureaucracy that they created.
5. Abolition of this bureaucracy is not going to work.
- Firstly, within the provider/commissioner split it is necessary.
- Secondly, the move from PCTs to GP consortia will multiply this work – as hospital trusts will now need contracts with multiple consortia where previously they had contracts with only a few PCTs.
- Thirdly, removal of the PCTs-bureaucracy will result in the work going somewhere (the need for it will not disappear as long as there is the internal market) so either it will be picked up by clinical staff, by bureaucrats working for the PCTs or by the private sector.
In other words – the internal market may have transaction costs, but the efficiency improvements that it creates far outweigh these costs. Each manager generates more value (by ensuring that doctor time, nurse time and resources are used efficiently) than they cost to employ.
I’m open minded on this point. I want to see the evidence. However it’s irrelevant because as the article says, the Conservatives created the bureaucracy they are now attacking. If said bureaucracy is genuinely valuable then there is no grounds for attacking it. Alternatively, if this is a problem with the NHS then pushing the system to a model where this bureaucracy will need to expand and at the same time pretending to cut it is ridiculous. Either way, it’s good politics – no one ever lost votes by attacking bureaucrats but it’s appalling policy and extremely dishonest.
AFZ
AFZ: agree 100% on your last paragraph.
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salardeen
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julian tysoe
Who created NHS bureacracy and why Tory reforms will likely make it worse: http://tinyurl.com/6cxjcst
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