I am sad that such a major spat is blowing up, between Alan Milburn and the Labour backbenchers.  Because the foundation hospital concept does contain within it the seeds of substantive NHS reform.  Unfortunately Milburn (in the Blair corner) is making so many misjudgments, in the implementation process, that the very scheme itself is threatened.

Let’s unpick the issues, shall we?

(1)    Perceptions  Tony Blair has at all times been right in his perception of the NHS as a dominated by a narrow and self-serving medical profession.  I share that perception.  Aneurin Bevan did indeed “deliver” the NHS in 1948, but we all paid a high price in his “deal with the Doctors”.  I have always given Tony Blair the credit for understanding that the Bevan settlement would have to be re-visited.   For example, Blair took the personal lead in promoting NHS Direct, with its growing role for the nursing profession.  And he has shown every sign of wanting to address the inefficiencies foisted upon the NHS by the medical professions. 

(2)    Approach  For that to be achieved, however, the “big hierarchies” of the NHS must be broken up.  The very monolithic character of the Bevan NHS played into the hands of the medical profession, especially the hospital consultants, who were ideally suited to become its high priesthood.  This perception lies behind the principal thrust of the Milburn reforms: it reflects Blair’s diagnosis  that organisational change will only be achieved by de-merging the NHS into a much more diverse network of structures.  And I agree with that. 

(3)    Method  This would be achieved by the new device of the public interest company, whose parentage I proudly claim: see my website Public Interest Companies. - from a much earlier stage in my Weg#b-editorial career.. Independent not-for-profit corporations will be established, one for each hospital: they will (like registered charities) remain in perpetuity “public” agencies controlling public assets - but they will not be subject to any day-to-day management control by “the State”.  Instead, says Milburn, these hospitals will be accountable to their own communities; and Ian McCartney has claimed them to be harbingers of a new  democratic constitutional order, of very wide application indeed.  TonyBlair has repeated this claim of "greater democracy" this week. Under their new Boards of Directors, they will make their way as public trading corporations, in the healthcare market-place, receiving grants annually and financing their own expansion in any way they can, subject to the proviso that the Treasury’s “public sector finances” will always be taken to include their operations.

So far so good.  I have no quarrel with any of the reasoning so far, none of these three stages.  The devil is in the detail, in the constitutional features of the proposed corporations. Three issues predominate, none of which has yet been properly aired. 

1. Scope  The first is the very limited scope of the scheme.  Its restriction to a small number of “top” hospitals has put the cat among the Labour pigeons – with good reason.  This is where all the understandable charges of elitism come from, upsetting Labour’s keen egalitarian instincts.  For if this is a good idea, then it should be applied to every hospital in the same way.  If (as McCartney argues) this is intended to be a genuine constitutional innovation, then all hospitals should be included from the outset, even if the process take a little longer.  The Government should avoid all the indignities of earned autonomy, which is wrecking the Government’s relations with local Councils.  All hospitals should be included, now.

2. Universal Suffrage  Second: the process of election should be universal, and genuine.  The rhetoric of “accountability to local communities” should mean that hospital Boards are elected by the electorate as a whole.  All that has been suggested so far is “election by patients”, which would be absurd.  Labour should ensure that the democracy is real democracy.

3. Effective Democratic Control    The elected representatives should have full charge of the hospital or group of hospitals. Board status should not be shared with the management.  The LA collegiate model should be adopted, with officers (in particular the medical professions) advising and reporting to the elected Board.  Instead of that, the local hospital management is scheduled to consist (as to perhaps one-third) of the hospital’s staff and officers themselves, sitting as voting Directors alongside the elected “lay” members. 

This corporate model will never work, because it will be fundamentally impossible for the elected Directors to find their own voice, their own role.  It is clear that the medical professions and hospital management would resist such “subordination” (as they will see it) - but that is precisely the democratic model for which Labour should be contending.  If Labour fudges this issue, and leaves the medical professions in de facto control of these new independent agencies, their power will be entrenched there for ever.  And Tony Blair will have lost one of his most important political battles – in which he has been 100% right all the way along.

My advice to Alan Milburn is therefore clear.   

“Do it the McCartney way!  Go for a genuine democratic innovation, a new communal institution with authority vested in a properly elected Board, chosen by the entire electorate of each relevant community.  That way, you can bypass the existing local authorities (which you probably want to do…) and etch your name alongside Bevan’s – as an even greater champion of democracy.  How about it?”