Objectives for the Current Chapter

1982 marks a significant change in the NHS reforms. It signifies a move away from the Consensus and lays a platform for future events. This chapter aims to provide a background to the changes seen in 1982, comment on the content of these changes and provide a link to the reforms seen in 1989-90. Central to these is a check that the assumptions of the institutional analysis still hold.

4.3. Background

Although 1989 is quoted as the start of the radical reform process in the NHS the seeds of reform were sown in 1982. 1982 marks the end of the 1948 Consensus on

health care provision. It began with the commissioning of the Griffiths report - published in 1983 (Griffiths R 1983). This report is credited with initiating the process of beginning the revolution in the NHS. Prior to this date the NHS was committed to the provision of universal health care, free at the point of delivery - as was promised in the Consensus (Beveridge W 1942). Therefore NHS reform revolved about the maintenance of the Consensus by focussing on demand control and rational planning. These moves caused considerable centre-periphery tensions as a result of the strength of the state-economy-civil society relationship. This tension was believed to be the cause of the NHS’s problems and so a series of organisational ‘fixes’, in an attempt to alter the power of the organisations involved, was embarked upon (Klein R 1995). The Griffiths report switched attention from the process of organisation to the dynamics of supply. In particular, emphasis was placed on the efficiency of services, and the targeting of services to those most in need. This targeting caused a subtle change, for prior to 1982 services were universal but available on the basis of demand, after it they were ‘rationed’ explicitly on the basis of need (Glennerster H 1998). The reasons behind this change are not difficult to see. Caught between increasing demands and economic constraints ministers appeared to have only one option, that of increasing the efficiency of NHS services by reducing the waste of unneeded, duplicated or redundant services. This change came at a price. A service based on need implied a centrally managed service, and a role for central government to force efficiency. This change was at odds with the concepts of medical freedom, as it implied a change away from the universal right to treatment. This was bound to be perceived as a threat to the independent practice of medicine in the NHS. In former times such a perception would have been avoided at all costs, but a unique set of circumstances combined to increase government resolve to commit to the change

(Webster C 1998).

1. The government was in a strong position. In 1982 the Thatcher administration recorded an election victory - repeated in 1987. This gave the government the confidence to proceed with the changes driven forward by the leader Margaret Thatcher (Thatcher M 1993).

2. By the mid-1980’s the society that the NHS supported had changed radically. The society of 1948 was just recovering from the war and resources were scarce. What work was available was by and large male dominated and manual process orientated. Beveridge in formulating the NHS had made the assumption that this was to be the standard working practice, and in essence would not change. However, by 1980 the majority of the working population was not in manual industries and nearly as many women as men were in employment (Curwen P). These changes not only implied that two wage families were the norm, but also that society had become more diffuse, with fewer class boundaries. By 1982 the limitations of the NHS with respect to society change was becoming apparent as demands on the service for less invasive, and more supportive services grew (Klein R 1995). The changes in society implied that the Consensus would no longer be appropriate. However, the formation of a new agreement on the role if the NHS was going to be a difficult task (Kavanagh D 1990).

A change in the NHS was made more difficult by increasing interest of the public in politics. The action of politicians were now centre stage in public life, and for anybody dissenting with the prevailing views, there was a wide audience of the media waiting to publicise the story. This made politicians veiy cautious about tackling one

of the sacred cows of British life - the right to universal health care. However, here too the government was fortunate. The changes in political and social life emphasised the role of the individual in assuring their success and welfare - allowing for a change away from universal services (Lowe R 1993; Hutton W 1998; Urry J 1988).

Despite these changes, however, the time for radical reform was not ripe. The early 1980’s were marked by economic concerns and therefore welfare state was seen as an essential safety net. Therefore while many recognised a change away from universal care was needed, the atmosphere of radical change was not yet prepared. In these circumstances it was anticipated that the political price of reform would be high (Jenkins S 1995).

There are other reasons why radical change could not be embarked upon. Overall the Thatcher policies can be summarised as the increasing use of state power to create and regulate an economy and social structure based on markets (Le Grand J and Robinson R 1984). This implied reducing the power of providers, by the increasing

the regulation of provider activity, and transferring much of the power to the consumers. The power of consumers was to be mediated by the use of intermediary bodies such as local authorities or independent bodies - such as school governors for opted-out schools. In the early 1980’s these bodies were not in a position to accept this responsibility (Urry J 1988), and the economic circumstances implied that little public funding would be available to create these bodies (Klein R and Lewis J 1976).

Given the lack of leverage to create radical change the 1982 reforms settled on creating an atmosphere and framework for change. Central to the Conservative

ideology was the concept that the state should live within its means and provide the services it could afford, to those who needed it (Glennerster H 1998). In order to achieve this, in 1983 the financial management initiative (FM3) was established (Prime Minister and Chancellor of the Exchequer 1988). The FMI led the charge-to efficiency by producing a range of performance indicators. These indicators were, in many ways, the products of the administration that the government was seeking to remove, so as in previous changes ambiguity was inherent (Hennessy P 1991). However, despite this these indicators were to take on a new meaning as tools for public accountability and political levers for change - rather than the original intent, as tools for accountability to governments. So the public were made aware of these indicators and encouraged to use them by increasing pressure on the service providers to conform to ‘Standards of Service’ (Glennerster H 1998).

The trend to a consumer focus in service provision was recognised as a two-edged sword. While the trend increased service responsiveness it was apparent that it could also fuel demand. While the state was not in full control of the NHS this could lead to a greater fragmentation and duplication of services (Klein R 1995). The infrastructure of the NHS in the 1980’s could not support this increase in demand as the economy grew very slowly and the government did not meet its election pledges of increasing welfare expenditure in this period and so the NHS was financially strapped (Curwen P

1997).

The overall impact of the social and economic problems associated with NHS reform acted as a damper (Thatcher M 1993). Therefore taking the political, social and economic limitations to reform into account the reform of the NHS got off to a

cautious start with a review of the service and a re-organisation.