Final Report > Chapter 4: The Changing NHS 1984 - 1995 > Resources

Resources

27 As we have said, the 1980s and 1990s were characterised by a concern for efficiency and cost control. This had implications for all parts of the public sector. The NHS was not immune.

28 Resources include not only finance, both revenue and capital, but also material, in the form of equipment and drugs, and human resources, in the form of doctors, nurses, managers and others. It is commonly said that the NHS was, as regards the resources available to it, seriously underfunded during (and before and after) the period covered by our Terms of Reference. Before taking a view on this and assessing its impact, we need to examine more carefully what is being said.

29 The resources made available to a publicly funded service such as the NHS represent the conclusion of a complex process which is ultimately political. In abstract terms, the process is as follows. The government of the day determines the level of taxation and what will be funded through that taxation. It also determines what proportion of that funding will go to any particular service. The government offers itself to the electorate on the basis of the decisions made. The public, by their voting choices, endorse the decisions, or indicate that they favour the alternative choice offered by the political opposition. On this reasoning, resource allocation in the public sector is the product of a compact between public and government.

30 This approach would suggest that a service can never accurately be said to be under-funded since, within a relatively short timescale, its funding is regularly adjusted to reflect the prevailing political compact. On this approach also, it is idle to talk of a `proper level of funding' or the `necessary level of resources', since there is no absolute or proper level. There is only a political choice which, by reflecting the will of the electorate is, by that fact, the proper choice.

31 To the extent that this describes the political reality of how resources are allocated to the NHS, it is an approach with a flaw at its centre. If the government of the day opts for X resources to fund a public service and then represents that service as being able to provide services which in fact cost X plus Y, then it immediately becomes possible to use the term `underfunding'. And this has been the history of the NHS in the period in which we are interested and beyond. Governments of the day have made claims for the NHS which were not capable of being met on the resources made available. The public has been led to believe that the NHS could meet their legitimate needs, whereas it is patently clear that it could not. Healthcare professionals, doctors, nurses, managers, and others, have been caught between the growing disillusion of the public on the one hand and the tendency of governments to point to them as scapegoats for a failing service on the other.

32 Of course, if governments had claimed that the service delivered by the NHS should be judged on the basis of a comparison with a moderately successful Second World country, no complaint could be raised. But the NHS was repeatedly represented as a comprehensive service which met all the needs of all the public. Patently it did not do so.

33 During the 1980s, for example, there was a growing body of evidence that resources had not kept pace with demand, or with the ever-expanding range of diagnostic and therapeutic options. The House of Commons Select Committee on Social Services reported in 1988 that expenditure on hospital and community health services had been underfunded by £1.5 billion between 1980/81 and 1987/88. [14]

34 December 1987 provided a particular example. There was increasing concern about the perceived lack of funds in the NHS. This perception was borne out when, in December 1987, the Department of Health and Social Security reported that there had been a shortfall in health authorities' income. Consequently, a further £100m in extra funds were allocated for that year as a one-off payment.

35 Shortages in healthcare professionals, particularly doctors and nurses, to provide the service which was promised were a constant factor. The public came to expect, if not accept, dirty hospitals, poor food, inadequate facilities, long waits, and an uneven quality of care. Healthcare professionals laboured to make ends meet and to care for their patients, working in circumstances which were an affront to the claims made for the NHS.

36 In 2000, at last, the present government acknowledged this gap between claim and reality in the NHS. A significant boost in funding was announced. A further commitment was made to align spending on the NHS with that proportion spent on healthcare in Europe. This development has been widely welcomed. It is seen as a long-overdue recognition of the need for more resources. But we add a caution. The currently announced injection of funding will do much to enable the NHS to catch up: to train and recruit the needed healthcare professionals; to refurbish the hospitals and clinics; to obtain the necessary equipment; to reconfigure the service. But it will not be enough to do more than this. It will not, in other words, allow the NHS to develop in the way contemplated in `The NHS Plan' and which is necessary if it is truly to meet the claims made for it. We have every reason to believe that to achieve what was set out in the `The NHS Plan', which we will refer to in Section Two of this Report, there must be a sustained increase in funding year-on-year.

Footnotes

[14] Sixth Report House of Commons Social Services Committee. 1987-88 Session. London: HMSO, October 1988. The figures quoted are
1987/88 prices