15 December 2006
There must be no back-pedalling on reform as the health service seeks to recover financial balance, NHS chief executive David Nicholson told the Healthcare Financial Management Association annual conference in London.
Recent history showed the folly of reversing the devolution of power from Whitehall, he believed.
The reforms of the early 1990s to introduce NHS trusts and GP fundholders ran out of steam within five years as local autonomy was reined in, he told delegates on December 7. This, he said, led in 1996/97 to the service's biggest deficit compared with turnover.
'Powers of individual organisations were being eroded and we started to focus our attention on balancing the books – we must all do this but not to
the exclusion of everything else. One way of doing this was to let waiting lists rise but we all know how that ended. We must not let that happen again.
'We now have an opportunity to accelerate reform, not pull back. Greater freedoms, some competition, more autonomy and Patient Choice are more likely to resolve our issues than retraction and retrenchment.'
He added that NHS bodies had to implement the basics of financial control but also needed to create financial headroom by planning for a surplus.
'It's counter-cultural, but we need to identify a downside and plan for it. Too many plans are based on incredible optimism.'
The 18-week referral-to-treatment target – which should be met by 2008 – was one of the biggest challenges facing the NHS. The service had got closest to meeting this target in waiting times for cancer treatment but this had only been achieved with special attention and extra cash.
'That', he said, 'is simply not available to us for all services – there is not enough money. It can only be done by changing the way acute hospitals work significantly.'
At the same event, the new Audit Commission chair, Michael O'Higgins, giving his first major conference speech, said he would be stressing the importance of listening to customers and the better use of information.
'I have set the Audit Commission the challenge of helping the NHS and local government access real-time information based on outcomes rather than processes,' he added.
'It also gives regulators and government a better understanding of what is happening, and makes public bodies more accountable to those who use them and the public generally.'
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