Kwasi Kwarteng is right - ringfences are bad policy
The Independent’s front page today features Kwasi Kwarteng MP under the headline “Cameron WILL have to cut NHS spending,” The professional outrage industry has, predictably, kicked into full gear.
But if you look at the quotes, the headline distracts from a serious point. It is worth quoting Mr. Kwarteng in full.
“We have always been very clear that deficit reduction is absolutely important and if you are going to reduce the deficit then everything should be put on the table and considered equally. It’s common knowledge that there has been a consensus on international aid… that we should ring-fence that, (and) on health spending. I think that consensus will be under a lot of strain given the budget realities. That will force change in the political discussion.”
Mr. Kwarteng is right - we cannot even start to tackle Britain's growing credit card bill unless we look honestly and maturely at each and every area of Government expenditure. Ring-fencing spending is counter-productive in the extreme, in whichever area of government it occurs. It means savings have to be found in only a few areas, rather than across a number of different government departments or functions. In short, it cuts off serious discussion. It’s like saying to yourself that you need to cut down on your social spending but saying you’re only going to save by not going out on Sundays – after all, you enjoy the pub quiz on the Monday, the football on Tuesday, a date on Wednesday…
A serious attempt to restore sanity to the public finances has to include a long hard look at whether we can find savings in the NHS.
Throwing billions at the service makes for good headlines, but it's not good policy. The boss of NHS England reckons the Health Service could save £22 billion through efficiencies, and yet instead of asking him to do so and redirect resources to the frontline, the Chancellor will today sign another cheque that drags Britain further into debt and makes the NHS' long-term future even more uncertain. If a budget is only ever going to go up, there’s no incentive to find savings. The cash gets pumped into creating armies of middle-managed and bureaucracy with little impact on frontline care.
It is a fallacy to say that more borrowed money will ensure better service - the huge increases in the Health budget between 2000 and 2010 created a raft of middle managers and bureaucracy but did nothing for crucial frontline services. John O’Connell, our Director, found in a 2011 paper that the NHS did not perform well on international comparisons despite huge funding increases when it comes down to one, fairly important measure – whether it keeps people alive.
When they talk about the NHS, politicians focus too much on inputs – how much is spent, and who is delivering it – rather than outputs; in short, whether the Health Service is doing as good a job as it can do for the people who rely on it and, yes, pay for it.
This issue is too important to play politics with and the childish, uncritical way in which it is discussed in this country is the surest way to guarantee that tragedies like the debacles of Mid-Staffs or the Medway continue to occur, and to further imperil the service for the next generation. If politicians care about the NHS as much as they say they so, they need to be honest about the challenges it faces rather than apply sticking plaster after sticking plaster. Sooner or later, the pack runs out.
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