NHS bomb is set to explode

It may not yet look like it on the surface, but behind the scenes NHS bosses are cooking up a really massive programme of cuts, beginning next year. NHS London is projecting upwards of £5 billion in cuts by 2017 - almost 40 per cent of its £13bn budget this year. NHS Oxfordshire has just stunned local people by unveiling plans to slash £240 million over the next five years - 30 per cent of its £800m budget, with proposals to cut up to £80m a year from 2011. Other strategic health authorities and primary care trusts will be working on similar figures, even if they have not yet been published; of course the government's spending figures do not show an actual reduction in NHS budget next year. But after eight successive years of large above-inflation increases, 2010 will see the rate of growth slashed right back. And from 2011 NHS budgets are set to stand still in real terms - rising by just the rate of inflation - while demand for health care, especially from an increasingly aged population, is expected to continue its upward spiral, creating an ever-increasing spending gap.

How big is the gap? What are the calculations based on? It appears that these huge spending cuts flow from projections by US-based management consultants McKinsey's. It is all over the NHS like a rash, scooping up tens of millions in consultancy fees for suggesting improbable and unpopular policies to deliver colossal cuts, although there is little or no evidence that many of the changes it's proposing will save the amounts it is predicting. We can see some of these policies emerging now in the guidance for strategic planning issued by NHS London and the discussions of primary care trusts, all of which are clearly working to a common "one-size-fits-all" blueprint - but we are not allowed to see the full figures. Information is being grudgingly produced in local dribs and drabs, ensuring local people and front-line NHS staff are the last to know what is happening. NHS London has refused a freedom of information request to release the McKinsey report it commissioned in the summer and which it has now circulated in secret to primary care trust bosses across the capital.

To ensure that they do not let local opinion or opposition get in the way, London's primary care trusts themselves have been largely relieved of power. Instead six new "sectors" have been established, covering groups of trusts in different areas of the capital. These sectors meet in secret and only reveal their proposals at the last minute, to the surprise of the individual primary care trusts, local councils and MPs. One example of this was the plan to axe A&E and other services at King George Hospital in Ilford, discussed in last month's column. This triggered an immediate and angry reaction from MPs and councillors from all parties and has now led to lobbies and protests as campaigners begin a rearguard campaign to defend the hospital. It turns out that the rundown of King George is part of a plan to reduce hospital services across the whole of north-east London, with major acute hospitals in just two places - the Royal London Hospital in Whitechapel and Queen's Hospital in Romford. Both of these are expensive private finance initiative hospitals facing three decades of index-linked payments.

Other hospitals - Newham General, Homerton and Whipps Cross - would be reduced to "local hospitals." The suggestions flowing from McKinsey are the NHS equivalent of a neutron bomb which is supposed to destroy life but leave property intact. All of the cuts are aimed at the front-line trusts, while the primary care trusts are encouraged to keep on expanding their layers of bureaucracy and their spending on management consultants. No questions are raised over the value for money of the billions now being pumped out of the NHS to pay private-sector providers and PFI schemes. The plans outlined in guidance from NHS London are brutal: A 66 per cent cut in staff working in non-acute services. A 33 per cent reduction in GP appointment times from 12 to eight minutes. A 10-15 per cent cut in prescribing costs. 55 per cent per cent of outpatient services and 60 per cent of accident and emergency activity to shift to "polysystems" A reduction in emergency admissions by 30 per cent for "non-complex long-term conditions" and 10 per cent for complex long-term conditions.

"Decommissioning" of 7 per cent of elective procedures, 30 per cent of out-patient appointments, 10 per cent of A&E activity and 10-15 per cent of diagnostic tests. A squeezing down of the "tariff" - the rate paid to hospital trusts for each patient treated - by 3-4 per cent each year, which will have the most drastic impact on PFI hospitals with high, inflexible overheads. These proposals only scratch the surface of the cuts because many of the plans to switch services out of hospitals will inevitably mean the trusts facing hefty loss of income, calling into question their longer-term financial viability. According to figures by former health minister Lord Darzi back in 2007, just switching 60 per cent of A&E attendances away from hospitals - even if this unlikely result could be achieved - would slash more than £500m a year from London's hospital budgets and trigger fresh cuts and panic mergers. Nor is there any real indication of how primary care and other services are supposed to handle the huge numbers of patients that would be diverted.

On last year's figures, 1.86 million A&E attenders alone could be diverted from hospitals and descend onto ill-prepared "polysystems," few of which are yet up and running. This would require enormous allocations of staff and management resources, on top of the strain of dealing with millions of out-patient consultations, and the cost and complexity of hospital consultants travelling to outlying clinics. There is no evidence at all that this would be cheaper, more efficient or in any way more desirable than the present system. Polyclinic-style health centres elsewhere in the country have been described as "eye-wateringly expensive" compared with existing primary care services. Health workers, and in some cases the NHS trusts which deliver services, are deliberately kept in the dark on plans being hatched up by primary care trusts. The secrecy demonstrates beyond doubt that the strategic health authorities and the primary care trusts know that they can expect no popular support for their plans from the wider public. They therefore conduct as much business as possible behind locked doors.

In Oxfordshire, health workers have been quick to respond to the threat of cuts, the UNISON branch demanding the primary care trust publish "a detailed case in plain English" so local people can examine the funding assumptions. Health workers in London and elsewhere will need to be equally swift and determined in challenging the furtive plans being hatched by secretive quangos that threaten the health care of millions. Anyone concerned to avoid a Tory victory in next year's general election needs to fight these damaging proposals, which threaten further to discredit Gordon Brown's government as more unpopular plans emerge and go to public consultation in the first few months of next year. It doesn't have to happen. The cuts are not driven by overspending in the NHS or other public services but by massive failure in the private sector.
Chancellor Alistair Darling is attempting to balance the Treasury books after squandering hundreds of billions of taxpayers' money on propping up the banks. Ask any voter whether they want taxpayers' money given to bankers or to employ nurses and doctors and you will get a unanimous and clear answer.

Darling and other ministers must be told to make their economies elsewhere. If there is a spending gap, it should be plugged by raising the taxes on the high-rolling scroungers who got us into this mess in the first place and are now gleefully sharing out new bonuses as primary care trusts work out their share of NHS cuts. Brown recently floated the idea of a "Tobin tax" on City transactions that could raise billions. He should be told to get on with that - and get his government's hands off our NHS.