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Downing Street Years - Margaret Thatcher [382]

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patient. The old, overelaborate and distorting RAWP (Resource Allocation Working Party) funding system would be ended and replaced by a new system based on population, weighted for age and health, with some special provision for London which had its own problems. Hospitals would be free to opt out of District Health Authority control to become self-governing trusts, funded from general taxation, free to settle the pay and conditions of staff and able to sell their services in the public and private sectors. GPs in large practices would have the opportunity to hold their own NHS budgets. The remit of the independent Audit Commission would now be extended to include the NHS. There would be tax relief for the over-60s on private health insurance premiums. Throughout the system, more powers would be devolved to local hospital management.

The white paper proposals essentially simulated within the NHS as many as possible of the advantages which the private sector and market choice offered but without privatization, without large-scale extra charging and without going against those basic principles which I had set down just before Christmas 1987 as essential to a satisfactory result. But there was an outcry from the British Medical Association, health trade unions and the Opposition, based squarely on a deliberate and self-interested distortion of what we were doing. In the face of this campaign of misinformation Ken Clarke was the best possible advocate we would have. Not being a right-winger himself, he was unlikely to talk the kind of free-market language which might alarm the general public and play into the hands of the trade unions. But he had the energy and enthusiasm to argue, explain and defend what we were doing night after night on television.

What I was less convinced about, however, was whether Ken Clarke and the Department of Health had really thought through the detailed implementation of what we were doing and foreseen the transitional difficulties which might arise as we moved from one system of finance and organization to another. David Wolfson and others doubted whether District Health Authorities and hospitals had the information technology, accounting systems and general administrative expertise required to cope with the changes. Clearly, if the information on the flows of patients between districts and the costs of their treatment were inaccurate the consequences for budgets could be horrendous. I had papers prepared for me on this and arranged for a presentation from the Department of Health in June 1990, which I did not find very reassuring. With all the political problems which the community charge was causing, we could not afford to run the risk of disruption in London and the possible closure of hospital wards because the service was not capable of managing in the new more competitive environment. In the end, I decided against slowing down the reforms, while urging that the closest attention should be paid to what was happening in London.

In their different ways, the white paper reforms will lead to a fundamental change in the culture of the NHS to the benefit of patients, taxpayers and those who work in the service. By the time I left office the results were starting to come through. Fifty-seven hospitals were in the process of becoming trusts. Moreover, the political climate was changing. The stridency of the BMA’s campaigns against our reforms was leading to a backlash among moderate doctors. The Labour Party had been put on the defensive and had begun themselves to talk about the need for reforms, though not of course ours.

I was determined to build on what had been achieved. I had my Policy Unit working on further proposals. We were considering the possible further encouragement of private health insurance through tax reliefs, structural reforms of the NHS to cut bureaucracy, more contracting-out of NHS ancillary services and — most far reaching — the introduction of a measure whereby anyone who waited more than a specified time for certain sorts of operation would be given a credit from their

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