At the NHS Confederation’s debate on the effects of recession on the NHS, former health secretaries Patricia Hewitt and Stephen Dorrell painted different scenarios of the likely effects of the credit crunch.

Hewitt outlines the fact that the NHS still enjoys two more years of 5% guaranteed growth, and warned that beyond that point, the NHS will have to cope with much lower growth than it has been used to – a trend of about 8% real-terms growth year-on-year for the past eight financial years.

NHS “better-placed” for recession – Hewitt
However, she argues that various of the New Labour NHS reforms have left the service in a better position to manage this change – from the national tariff to payment by results and patient choice.

Hewitt told attendees, “among managers and clinical staff alike, I sense much more embedded focus on real value for patient and much better understanding of (NHS chief executive) David Nicholson’s argument in the 2009-10 Operating Framework and in the Darzi Review that best care also best value.

“The world-class commissioning ambition has made the commissioning arm of the NHS significantly stronger than two-three years ago. The NHS has a reasonable surplus, some of which is o be released; and fewer organisations with big deficits - reflecting much greater financial discipline and need for best value for every pound in NHS. The impact of the 18-week waiting target has led to a better understanding of patient pathways across NHS. And the national tariff is now maturing to deliver value with the new quality payments based on health outcomes”.

A predecessor’s gloom
Stephen Dorrell, the former Conservative health spokesman, painted a far more gloomy picture of the downturn. He told the audience, “in the last 10-15 years, the west has seen living standards at a level we shall not be able to sustain. The fundamental reason has been the globalisation process … giving us improving living standards at the same time as emerging countries have been growing”.

Dorrell warned that the economic downturn would be prolonged over many years, adding that he doubts “Panglossian hopes of a few years’ rough passage, prior to a return to the Elysian Fields of economic good times. It will be hugely tougher to maintain living standards, and that includes funding of public services.”

He suggested that “if the long-term sees a relative adjustment to living standards as I fear, the NHS can expect a substantial long-term rise in demand due to poverty, stress, depression”. Mr Dorrell appeared unaware that the NHS is already dealing with these problems among deprived sections of the population, who are disproportionately the service’s biggest users.

He also warned of “the effect of disappointed expectations, with economic stress, rising health demand, extremely tight cash budgets”, and talked of “£5 billion of unallocated spending cuts in the recent Pre-Budget Report documents”.