By Tom Baldwin and Alice Miles

The Times 7/8/02

LABOUR must seize the policies of diversity and choice from the Conservatives in the same way that it has occupied traditional Tory territory on the economy and crime, Alan Milburn says today. In an article for The Times, the Health Secretary gives warning that the Government risks defeat in the next general election if it allows cautious “consolidators” to prevail over ministers seeking to transform state-controlled public services into consumer-driven organisations.

Although Mr Milburn insists that the article is not meant to be an attack on Gordon Brown, the Chancellor, his comments come in the midst of a simmering row with the Treasury over plans to give Britain’s best hospitals freedom from Whitehall control.

Mr Brown has so far blocked a key element of Mr Milburn’s NHS reforms under which new “foundation hospitals” would be allowed to operate like a private company and borrow money from banks independently, without obtaining permission or having strings attached by the Government.

In his article today, Mr Milburn says that, while reform of the health service was always going to be difficult for Labour, a break from its “overly centralised, paternalistic” history is a “precondition” for retaining power. Increased spending will not deliver the improvements the Government needs to demonstrate at the next election unless there is a change in public service culture, he adds.

“There is no automatic correlation that tax-funded healthcare has to mean healthcare run simply by central government . . . Existing NHS hospitals should be able to become NHS foundation hospitals with more freedom from centralised state control and greater local community ownership.”

Mr Brown’s opposition to the proposal has exposed a Cabinet split with Downing Street aides already talking of a battle between “transformers” and “consolidators”.

The Chancellor is understood to have said that giving hospitals freedom to borrow money would not only threaten the public sector’s financial discipline but possibly lead to the break up of the health service with successful trusts taking out loans to do more private operations.

Mr Milburn has been told that without the freedom to borrow, the scheme could collapse because hospitals will not be interested in applying for foundation status. He has promised to consider introducing statutory obligations on foundation hospitals, which would rule out any extension of private sector work.

The dispute is unlikely to be resolved until after the summer. Mr Milburn’s article will be seen as an attempt to reinvigorate Tony Blair’s Third Way philosophy and win back control of NHS reforms from Mr Brown.

Mr Milburn says: “There is a choice. We could choose a strategy of consolidation — accepting the reforms made so far and relying on increased public expenditure to deliver an expanded service but one whose culture remains essentially unchanged.

“Or, as I believe we must, we could choose transformation, recognising that extra spending alone is insufficient to deliver improvements in public services.”
Revelation of Labour’s agnostics

Alan Milburn should find some beliefs and then argue for them

Roy Hattersley

Monday August 12, 2002

The Guardian

What, you may well ask, was Alan Milburn up to when he wrote the article that appeared in last Wednesday’s Times? His own explanation is unconvincingly precise. According to the authorised version, he was clearing up “his study at home in the north-east” when an original thought suddenly exploded inside his head and he felt an irresistible urge to share it. Improvements in medical care, like the prospects of Labour remaining in office, depend on the encouragement of greater diversity within the health service. The proven successes of the system must be given greater freedom and extra funds.

Anyone who believes in Milburn’s Pauline moment will believe in anything. For it is not so long ago that the same truth was revealed to Estelle Morris in a similar mystic moment. And David Blunkett heard an identical prophetic voice three years ago. Improvements in schools’ performance, like the prospects of Labour remaining in office, depend on the encouragement of greater diversity within secondary education. The proven successes of the system must be given greater freedom and extra funds.

It is just possible that an identical blinding light struck on three separate occasions. But there is a more plausible explanation of Milburn’s conversion from belief in a “monopoly” health service. A young person in Downing street, probably called Andrew Adonis, brought the idea of diversity with him when he came to Labour on a free transfer from another party and has been urging ministers to adopt it ever since. Milburn is just a late convert.

But why did Milburn choose to publicise his ideas in an August article when he must have known it would have resulted in newspapers announcing that he was in open conflict with Gordon Brown? A pre-emptive strike against the chancellor is not a tactic that a wise minister would favour. Did Milburn think that a favourable leader in the Times would help him win his argument? Perhaps he has begun to resent not being master in his own ministry. It may even be that the breakdown of cabinet government makes public disputes unavoidable.

And another interesting question arises. Did the prime minister, or someone acting on his behalf, see and approve the article? “Instructions to ministers” is explicit on the subject. Even material of a “literary or artistic nature” must be submitted for scrutiny before publication. Over the years the rule has been enforced with varying degrees of severity. Clement Attlee prevented John Stratchey from publishing a poem on sunset after complaining: “Doesn’t rhyme. Doesn’t scan.” No one would expect Tony Blair’s literary criticism to be so rigorous. But is he content for policy arguments to be fought out in public?

Milburn anticipated questions about collective responsibility with a passing reference to the opportunity, provided by an ineffectual opposition, to “engage in dialogue more openly and debate our values and our vision more openly”. But the cliché about mature argument enhancing a party’s adult reputation only holds good if the discussion is conducted in the right way.

However health policy develops, the exposition of the secretary of state’s “personal view” is more likely to harm than to improve the government’s reputation. Either the secretary of state is humiliated by a rejection of his preferred “reforms” or the chancellor is diminished by the revelation that, for once, he has been forced to finance a spending initiative of which he does not approve. But the article reveals another characteristic of this government that is far more damaging than the admis sion that two ministers disagree. New Labour has no guiding principle on which to base its policies.

At one point in the article Milburn confirms his commitment to the “transformation of this country… a genuine shift in wealth, power and opportunity”. No doubt, at the back of his mind, he is still committed to that objective. But if he imagines that it is likely to be achieved by the creation of a two-tier hospital service he probably also believes that midwives find babies under gooseberry bushes.

Although he demands a return “to value-based politics”, his Times article argued the case for hospital autonomy on basically tactical grounds. New Labour must, if it is to remain in power, “seize the territory” occupied by the Tories. I can remember David Blunkett, in opposition, saying much the same about education policy. Adopt a little of their agenda to make sure that they do not have a chance to implement it all. The result has been more selection, more tests and more interference in schools than the Conservative party ever proposed. If Mr Milburn is searching for a new idea to reinvigorate the government, he might consider the novelty of establishing firm beliefs and arguing for them.

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