Streeting’s reforms could save the NHS from the private sector. He must not fail

There is going to be lots of angst in Labour ranks about the government’s proposed health reforms. At first glance they appear to be a reheated collection of Blairite targets and financial strictures that smack of privatisation by the back door.

When the former health secretary and arch-Blairite Alan Milburn was installed by his successor Wes Streeting to oversee the shake-up, it was easy to see how fears of a rightward shift might be being confirmed.

While there is an understand­able reluctance to consider a shake-up of the beloved health service, it would be a mistake to treat reform as a dirty word. The NHS mushroomed through the pandemic, gobbling up 10.9% of gross domestic product in 2023 – an increase from 9.9% in 2019 and about 7% when Tony Blair took office in 1997. And over the next 50 years, without reforms, health spending is going to carry on rocketing to 15% of GDP and beyond.

Lord Darzi performing keyhole surgery at St Mary’s Hospital in London. Photograph: Martin Godwin/The Guardian

Lord Darzi, who investigated the state of the NHS in England, said a realistic view would see that every age group is struggling. In his review for Keir Starmer, the ­academic and pioneer of keyhole surgery said that young, middle-aged and old Britons were increasingly unhealthy and a modern health service would first have to tackle this trend before trying to turn it around.

Darzi points out that hospitals are hoovering up money. To illustrate the point, he shows that between 2006 and 2022, the share of the NHS budget spent on hospitals increased from 47% to 58%.

That means tight budget constraints on GPs – and also pharmacists, who now say they will down tools unless a shortfall of almost £2bn is injected into the system to keep pace with inflation.

What many on the left have refused to acknowledge is how the public sector has become blighted by a lack of accountability – mostly the result of poor leadership from ministers, who rarely know enough about the NHS to make up their minds about what they want public services to achieve.

They can’t prioritise. And so they can’t lead. This filters down the chain, much as it does in large parts of the public sector more generally.

The result is a deep divide between those elements of the public sector that work effectively and those where the staff feel directionless.

Streeting’s understandable view is that radical surgery is needed to prevent a haemorrhage of people to the private sector, which is already under way. The healthcare research firm LaingBuisson estimates 13% of GP consultations are now private, up from 3% in 2009.

In a separate report, the consultancy found that the private acute healthcare sector’s income had rocketed in 2023 to an estimated £12.4bn.

Streeting knows that a more effective health service can not only make people healthier, but also bring down the national debt. As the Office for Budget Responsibility said in its recent fiscal risks report: “Changes in population health have wider fiscal effects beyond just their direct impact on health spending. Healthier people are more likely to be employed, often earn more, and tend to live longer; and the converse is also true for those in ill health.”

What Streeting needs to overcome is not so much a resistance to changing working practices that fit with modern methods of health delivery as a deeply siloed structure that prizes specialists over generalists. The more effective parts of the private sector have long since realised that those people who can understand the broader issues facing a business and arrive at a way forward should be the most highly prized. Unions are a barrier to this: they solidify the silo effect. And their adherence to outmoded roles stymies more collaborative working and integrated training schemes.

Were the British Medical Association, the Royal College of Nursing and Unison ever willing to bury their differences, they could forge a new deal with their employer, preserving pay levels but addressing restrictions that maintain sclerotic working practices and reduce productivity.

There should be just one health union talking to managers and ministers, caring for a growing number of staff that must be – should be – itching to break away from the snobbery and rigid structures unions too often fight to preserve.

Streeting and Milburn need a fair wind, or the whole NHS edifice will crumble. All they are asking is for managers to do their job. The private finance initiative days, when hospitals were boxed in by expensive, 30-year “design, build and manage” contracts, are in the past. Unlike the Conservative party, Labour is promising to give managers the tools. With extra kit on its way and more resources for staff to carry out their jobs, the NHS can begin to win back the public’s trust.

It’s not alarmist to say there is a queue of US, French and German health companies waiting in the wings to pick up the pieces should they fail. Attacks on Streeting risk ushering them in.