Will the NHS Survive Starmer’s Labour?
The NHS is the Labour Party’s greatest achievement — but nothing so far suggests a Starmer government will do what’s necessary to keep it alive.
Keir Starmer, Leader of the Labour Party, is greeted by Shadow Health Secretary Wes Streeting. (Photo by Leon Neal/Getty Images)
The National Health Service has endured yet another disastrous winter, with shortages of staff, facilities, and funding. After thirteen years of austerity, it is clear that the situation facing the health service following the next election will be far worse than the mess left behind in 1997 by the Thatcher and Major governments.
Tony Blair’s New Labour was elected that year with a landslide majority on a pledge to ‘Save the NHS’, despite having committed — to the disappointment of NHS and other public sector workers — to stick to the Conservative government’s spending plans for two years.
Labour kept its promises: for three years it largely stuck to Tory spending plans, limiting the opportunity to make much headway in improving the NHS beyond a minor reduction in waiting lists. But things changed abruptly in early 2000, when Blair announced plans to raise health spending towards the European average.
The spending taps were turned on. Thus began a decade of renewal in which funding was increased substantially above inflation, from 6.3 percent of GDP to 8.8 percent — the largest ever sustained increase in healthcare spending in the history of the NHS. The jump enabled a significant boost in staff numbers — 44,000 more doctors and 89,000 more nurses — and stemmed the loss of hospital beds.
Ministers set bold targets to bring down waiting times, both in A&E and for elective treatment, and the NHS achieved them. Mental health also benefited from increased investment, and staff pay was steadily increased in real terms by the Agenda for Change agreement with trade unions, resulting in a period of industrial calm. By 2010, the NHS had achieved its highest ever public satisfaction.
New Labour, New Markets
Alongside these achievements, however, New Labour also wasted money, squandered opportunities, and undermined the foundations of socialised healthcare.
Blair’s government broke its commitment to scrap Thatcher’s ‘internal market’, which had vastly inflated bureaucratic costs, despite a manifesto decrying how the system ‘distorted clinical priorities’ and produced an ‘NHS strangled by costly red tape’. Instead, it deepened the separation of NHS ‘purchasers’ from ‘providers’, opening the door to private interests.
It was New Labour that first began to commission the private provision of NHS clinical care. Diagnostic work, imaging, and even elective surgery were privatised in new profit-seeking independent sector treatment centres, which undermined NHS trusts and charged for procedures at rates averaging 11 percent above NHS levels.
At the same time, NHS community health services in many areas were privatised outright or hived off as so-called ‘social enterprises’. In 2003, there was even a disastrous, short-lived experiment with privatising the management of Good Hope Hospital in Sutton Coldfield.
Long-term damage was also done in 1999, when Blair’s ministers overrode the findings of their own Royal Commission on Long-Term Care, opting instead to keep the chaotic system brought in by Thatcher’s ‘reforms’, which remains an unreformed nightmare.
Billions are still being wasted each year paying inflated, index-linked bills for over 100 Private Finance Initiative (PFI)–funded hospital projects signed off by New Labour. An initial £13 billion investment will end up costing the NHS in England a staggering £80 billion by the time the contracts come to an end.
The outsourcing of cleaning, catering, and portering services to for-profit private companies begun in the 1980s also continued, with no move to bring them back in-house. This slicing-off of ancillary services to the private sector has created a two-tier workforce with huge numbers of workers in low-paid and precarious employment.
These forms of marketisation and privatisation in the NHS not only damaged provision but also formed a foundation for subsequent Conservative governments to further undermine public healthcare. In the years since, Tory prime ministers and health secretaries have defended harmful and unpopular policies by arguing — with some justification — that they are simply continuing down the path forged by New Labour.
In a final destructive act in the aftermath of the 2008 banking crisis, NHS bosses were required to plan for austerity. A secret report was commissioned from management consultants McKinsey, proposing often outrageous ways to make cuts of up to £20 billion a year. These ideas were initially denounced by the Tories in opposition. Later, though, many became the basis of the austerity we have suffered since they took office in 2010.
Learning the Wrong Lessons
Taken as a whole, the New Labour years offer a range of lessons on both what to do and what not to do in health policy for their would-be successors. Unfortunately, Keir Starmer and his shadow health secretary, Wes Streeting, seem determined to learn none of them.
Starmer has insisted that if elected he will ‘not turn on the spending taps’, implying his government might even have to cut public services. Wes Streeting went so far as to effectively blame the NHS — and implicitly its staff — for funding limitations, stating that he didn’t consider it ‘good enough that the NHS uses every winter crisis and every challenge it faces as an excuse to ask for more money’.
This commitment to belt-tightening is made in the context of crumbling hospitals with a maintenance backlog of £11.6 billion, clapped-out equipment, a deadly bed shortage, and deficit-laden trusts facing impossible demands for ‘efficiency savings’. Some managers are warning ‘nuclear service cuts’ are needed to balance the books.
It’s also made in the context of major industrial unrest. Staff have recently undertaken the biggest wave of strike action in the NHS’s modern history, following more than a decade of real-terms pay cuts that have seen the salaries of nurses and junior doctors, among others, fall by more than 20 percent. With senior Labour figures repeatedly dismissing trade unions’ demands for pay restoration as ‘unaffordable’, there is little sign of those strikes letting up — or, indeed, that the unions’ pay demands can stem the exodus of workers.
Meanwhile, in an effort to keep private sector donors happy, Wes Streeting keeps echoing Rishi Sunak by calling for more use of private providers rather than less. ‘We’re going to be holding the door wide open and encouraging them to come in,’ he’s declared, while offering no evidence that doing so would improve the health service’s dire straits. He’s even argued that the NHS is ‘the worst of all worlds, which is poor outcomes alongside poor value for taxpayers’.
Research by the more progressive health think tanks — the Nuffield Trust, the King’s Fund and, most recently, the Health Foundation — indicates otherwise: despite being underfunded, the NHS is delivering remarkably good value. The causes of its current difficult straits are clear enough to everyone, it seems, except those who will soon be in charge of running it. Former King’s Fund boss Chris Ham put it simply: ‘The NHS requires extra winter funding because in spending reviews NHS budgets are set too low.’
Starmer and his shadow cabinet are as keen as Blair and co. were to boost private provision, but much more conservative on public spending. And if there’s no extra funding in the pot, increased contracts for private providers will only worsen the plight of NHS providers — all while lining private sector pockets.
The staff who work in the NHS and all of us who rely on it are desperate to see Labour’s leaders commit to positive changes and the investment to deliver them. The alternative is a continual decline, and a rising possibility that Starmer’s Labour government could see a real collapse of the NHS established by Clement Attlee’s government seventy-five years before. It’s an outcome for which neither the ghosts of history nor the voters of the future would forgive them.