Broken Vows

by Tom Bower

  ‘Get the MPs off my back,’ he told Hewitt.

  Until then, Blair had not mentioned that, despite all the changes, the NHS’s structure remained unsatisfactory. The prime minister, Hewitt knew, ‘did not do detail’, but she was unprepared for his patchy knowledge. In the past, Corrigan, an other-worldly academic, had nudged Blair about ‘strategy’ but had rarely presented any pertinent insights on the NHS’s performance. He was replaced by Ian Dodge, a civil servant. After it was discovered that the latest special adviser had a limited understanding of party politics, Dodge was reassigned and Corrigan recalled. The net result was that Hewitt was bereft of leadership from Downing Street.

  ‘The PCTs don’t have traction,’ Blair told her. ‘They’re not entrepreneurial enough. Why have they not got enough bite? Why aren’t we doing more with the market?’

  Hewitt was bewildered. She was unaware of the hazardous journey since 1997 towards competition, nor had she grasped how Crisp and his lieutenants disparaged Blair’s support for choice. The officials spoke about ‘the difficulty of designing a market in health care’. None admired France’s ‘success’ in providing faster and better health treatment, instead damning the internal markets operating there as ‘wasteful’.

  For five years, Blair had bit by bit opened the cage door to encourage NHS independence, but the bird had not moved. So often he would say, ‘The reform programme is not going fast enough,’ or, ‘The department is not committed to the reform agenda.’ Although he blamed civil servants in general for sticking to their traditional obstructive ways, he never identified Crisp and John Bacon, his deputy, as the culprits blocking his desire for modernisation. Accordingly, he did not consider removing them.

  Crisp’s proposed changes to the PCTs were instantly revoked, and the baptism of fire prompted Hewitt to reassess her inheritance. Her advisers completed the picture.

  ‘John Reid did not dislodge the civil service opposition,’ she heard from Norman Warner, the only junior minister with any expertise in health. Reid’s murky legacy was concealed by Blair’s praise for his troubleshooter, a misjudgement that pervaded Downing Street.

  Corrigan gave a stark message about Blair’s mindset to Matthew Swindells, Hewitt’s new special adviser: ‘We’re stuck in halfway land on commissioning and choice. The department’s unhelpful.’ Swindells, an experienced NHS executive, was puzzled. Eight years after Labour first came to power, Downing Street still lacked a master plan for the NHS.

  Blair did not wholeheartedly believe that ‘choice’ could reduce waiting times. His gospel remained targets and ‘deliverology’ – except there was a problem: Michael Barber, the godfather of the Delivery Unit, had resigned for personal reasons before the election. In Whitehall and beyond, no one could find a successor. There was a good reason: ‘deliverology’ had failed to win converts. Barber’s bullying methods of command and control had, for example, reduced street crime but, once the unit’s pressure moved on to another target, the old offences had increased again. ‘Smoke and mirrors’, was a familiar judgement. Blair was in an odd situation. He believed in delivery but lacked a deliverer. He drew the obvious conclusion: there was no alternative other than to close the Delivery Unit.

  After hitting a brick wall about the NHS, he asked several experts for advice and changed his mind once again. Over a weekend at Chequers, he handwrote a memorandum spelling out the final reorganisation of the NHS. After all the targets and changes, he half understood his error. During the eight years since 1997, he had dismantled, then procrastinated and finally arrived back where he should have started – building on his inheritance from the Tories. He should never have placed his faith in centralised control. Only now did the sterility of his debate about reforming the public services begin to register with him. Naturally, he would not admit responsibility for the costly waste, even to himself.

  Delivering his new wisdom required delicacy. To win Gordon Brown’s agreement, he took the unusual step of creating a Cabinet committee, with himself as chairman. Among its members were Brown, Hewitt, John Prescott, Warner and Crisp. After the first meeting, Brown refused to attend and sent Paul Boateng, dubbed ‘the ventriloquist’s puppet’, to oppose everything. Looking at Prescott’s artless face while Blair described his ambitions, Warner contemplated how the NHS was again heading towards the buffers. Reform depended on inserting a team of like-minded supporters into Richmond House to challenge Crisp’s prejudices. Blair’s use of buzzwords like ‘mechanisms’ and ‘organisation’ showed a man talking a foreign language to the NHS staff. ‘Tony doesn’t know what he wants,’ Warner concluded at the end of the first month. ‘He’s just looking around for a silver bullet to say “reform”.’

  Hewitt also grasped that ‘Labour didn’t have a road map. Tony hadn’t caught up.’ She turned to Crisp for help. ‘Tell me, Nigel,’ she said, ‘how do you see reform progressing? Explain to me our “change” strategy.’

  Crisp spoke, but Hewitt could make no sense of what he was describing. ‘Would you like to see the department’s work programme?’ he offered.

  ‘Yes, please,’ replied the minister.

  The following day, Hewitt was shown a vast piece of paper – endless sheets of A3 paper sellotaped together – covering the length of a long conference table. ‘This’, said Crisp, ‘shows 112 different work streams which the department is undertaking.’

  Hewitt was bemused. The introverted chief executive defied understanding. Behind him stood John Bacon, his chief supporter brazenly showing that nothing had changed since Le Grand had discovered that ‘he didn’t care what ministers wanted’.

  ‘We have a problem,’ she realised. ‘There’s no narrative which explains what we are doing on foundation hospitals and markets.’ Crisp, she suspected, ‘didn’t understand Tony’s reform programme, politics or politicians’. She said nothing to Blair, who had appointed four new ministers to the department since the election. Other than Warner, none had yet mastered the NHS’s complexities.

  ‘There were no new ideas, no grip and no pushing forward,’ observed the NHS’s former chief executive Andrew McKeon. ‘It was turgid drift.’ Soon after, Corrigan departed for good. ‘We need to decide what to do,’ Blair told his replacement. The new adviser didn’t take long to conclude what the others had realised – that Blair had no blueprint for the NHS, while ‘Crisp supported his version of the NHS but not the real facts. He didn’t get it.’

  Crisp had also decided that Blair’s latest initiative on ‘choice’ was just another of his quick fixes. ‘The problem is always implementation. Real life doesn’t happen in soundbites. It’s hard work,’ he later wrote. There was also institutional sabotage. Foundation hospitals, some NHS chief executives complained, were ‘being strangled by bureaucrats introducing unexpected changes to the original vision’. The executives mentioned new red tape, interference in their finances and ‘the reassertion of the old system of command and control’.

  If Blair had heard Crisp’s carping, he would have had good reason to feel resentment. At the Olympic summit in Singapore, his charm had tipped the balance during individual interviews with each delegation and, on 6 July, in Scotland, he heard that London’s Olympic bid had succeeded. Gordon Brown, everyone knew, could never have achieved such a victory. Blair had flown on from Singapore to chair a meeting of the G8 leaders in Gleneagles. After intensive lobbying by Bob Geldof and Bono, Blair had persuaded the seven other leaders to place African debt relief high on the agenda. The ‘Make Poverty History’ campaign would write off Africa’s debt.

  In the early sunshine the following day, he walked with President Bush in the park before formally opening the summit. The forty Labour MPs known as the ‘awkward squad’, who had demanded his resignation after the election, had been silenced by his appeal for the party to unite and aim for a fourth election victory. By sticking by him they benefited not only from a charismatic leader, but also one blessed with luck. A week earlier, voters in Holland and France had rejected a proposed constitutio
n for the EU. Those results saved him from holding a referendum about Europe, and as he walked with Bush back to the hotel he had every reason to expect to remain prime minister for another four years. Minutes later, his life changed.

  Just before 9 a.m., three bombs exploded in the London Tube. Soon after, another one destroyed a bus. The opening of the summit was interrupted as Blair was told about the attack. Clearly shaken, he chaired the meeting until midday, made a defiant TV address surrounded by the other leaders, then flew to London to attend a Cobra meeting. By the evening, he had returned to Scotland.

  The security services assessed the outrage efficiently. Four Islamic bombers had killed fifty-two commuters and injured about 700 others. Blair was told that the emergency services were performing outstandingly – but those reports to Downing Street were not completely accurate. Incidents of poor leadership, an obsession by a few with health and safety, and lacklustre co-ordination among the services had led to a checkered performance. Nevertheless, Blair’s status momentarily soared. In the crisis, even his most trenchant critics withdrew, while he dominated the airwaves talking about the dangers of terror. On the streets, Londoners nevertheless soon drew a direct link between the outrage and the invasion of Iraq. Initially, they were ignored by Blair. Later, he would say, ‘What they want us to do is turn round and say, “Oh, it’s our fault.”’ He refused to take the blame. He was back in the spotlight but under pressure.

  Fortunately, Brown was similarly harassed to explain what the shadow chancellor George Osborne called ‘the fiddled figures’. Britain’s debts were rising, tax increases were inevitable and the public finances no longer looked so healthy. To maintain his reputation and secure an uncontested inheritance, Brown agreed with Blair a new spending limit for 2007, the date he assumed he would become leader. In anticipation, he did not give up his promotion of what he called ‘Labour values’ in the NHS.

  Down the executive corridor in Richmond House, Ken Anderson, the commercial director, still felt ignored by Hewitt and was under pressure from the Treasury. The Texan was repeatedly summoned by Shriti Vadera, Brown’s apostle, to justify the subcontracting of services to private companies.

  Reflecting Brown’s desire to undermine Blair, journalists were being tipped off by the chancellor’s spokesman that Anderson’s record in Texas was ‘controversial’ – a wholly unfounded allegation. Brown was also sabotaging the stock-takes organised by Gus O’Donnell, the new Cabinet secretary. ‘A disaster,’ Warner concluded at the end of the first meeting on the NHS after the election. Brown left after twenty minutes and would never return, but Hewitt was untroubled by his absence. Unlike her experience at the DTI, the Treasury was, to her delight, ‘shovelling money’ into the NHS with no questions asked.

  Warner, however, had misgivings. Just after the election, he had sent Hewitt and Crisp a memorandum warning that the NHS was heading for an unquantifiable deficit forbidden by the official spending rules. Hewitt accepted Crisp’s assurances that such fears were groundless.

  Ever since 1997, Blair had focused on staff numbers and buildings but not on productivity or value for money. Between 1998 and 2005, the NHS had hired an extra 307,000 people, the largest growth by a single employer in any country. Besides more doctors and nurses, it had employed 52,000 more administrators over the previous four years, increasing the managerial payroll by a third. ‘There was overstaffing on a ministerial whim,’ noted Rob Webster, the chief executive of the NHS Confederation. ‘With so much money, they lost the plot and recruited more staff than was planned.’

  Research by yet another organisation, the Office for National Statistics (ONS), revealed that staff productivity had risen until 1997, then flattened, and between 2001 and 2005 declined. Some, including Derek Wanless, the former banker employed by Brown, would describe the ONS’s research as inaccurate because it failed to account for the quality and success of individual treatments. But even he acknowledged that unit costs in hospitals had increased.

  A contagious malady handicapped NHS staff: from the most senior downwards, they seemed unable to embrace self-improvement. Too often, staff refused to read about medical innovations in other countries, and both hospital administrators and doctors stuck to outdated treatments. Many attempts to innovate failed. Under Frank Dobson, one NHS area was ordered to add 7,000 beds by 2000, but by 2005 4,518 of those beds had been withdrawn. The additional money and reorganisation was failing to treat proportionately more patients. Some blamed the culture of fear imposed by targets and inspection for undermining those managers who were minded to take risks and pioneer self-improvement. The Healthcare Commission reported that, if all hospitals were as productive as the best, the NHS could increase the amount of surgery performed by up to 49 per cent. None of these figures seemed to matter. Pressed on why productivity was falling by about 2.5 per cent a year – and by 4 per cent if the staff’s high sickness rate was included – Crisp replied, ‘The NHS is saving more lives.’

  The traditionalists could always unearth ammunition to undermine Blair’s advocacy of change. Whatever flaws were exposed, the staff protected their benefits. Forty per cent of them were receiving annual pay increases regardless of performance. Milburn’s rewards for employees who improved their expertise was proving as expensive as his concession of a 37.5-hour week. Half of the annual increase in the budget was spent on wages and ceaseless recruitment.

  Reid’s 2003 agreements with the doctors had also become a burden. Within three years, GPs’ annual pay had doubled to £106,400, while consultants’ pay was up 27 per cent to £109,974, which in 2005 cost the NHS an additional £220 million. The consultants’ hospital car parks were like top-end car showrooms. In return for the extra money, GPs were working four hours less a week. ‘John Reid paid out to GPs more than was anticipated, and that was after a 32 per cent pay increase,’ admitted John Chisholm, the BMA’s delighted negotiator.

  Consultants were also working fewer hours on clinical care. ‘The consultants’ contract’, said George Alberti, ‘was insulting. The BMA created clock-watching doctors.’ Weak hospital managers were failing to challenge the doctors to abide by the new contracts. The resulting higher pay, Wanless reported, failed ‘to demonstrate significant benefits [for patients] from the pay deals’. Blair loathed the BMA but was powerless.

  In sum, by 2005 the NHS was costing £43 billion a year more than in 1997. The country’s health had improved (if not in proportion to the additional money spent) but, in terms of the number of doctors, the use of technical equipment, the number of patients being treated and the cure rates for cancer and heart disease, Britain still ranked near the bottom of the international league tables. Some argued that the improvement in the country’s health, despite the growth of MRSA and other infections caught in dirty hospitals, owed more to the reduction in smoking, better drugs (especially statins) and a healthier lifestyle than the NHS’s performance.

  Despite his scepticism, Crisp was overseeing the applications for hospitals to become self-governing. Among the applicants seeking to become a foundation hospital in 2005 was the Mid-Staffordshire Hospital Trust. There was no opposition from the new regulators, which included the Healthcare Commission and the Care Quality Commission led by Cynthia Bower. All were satisfied that Mid-Staffs had consistently met its targets. Not one of those health professionals sifting through the hospital’s data noticed the abnormally high death rates or that targets were being ‘falsified outright to avoid non-compliance’. None of the experts visiting the hospital spotted that managers and nursing staff were being systematically cruel towards hundreds of patients; corrupted by the ‘box-ticking culture’, as a later inquiry would describe it, the carers were causing hundreds of patients ‘unimaginable suffering’. Instead, the inspectors unanimously prided themselves on Labour having fulfilled its pledge to create ‘a new tough independent health care regulator’.

  A report by Professor Brian Jarman would estimate that malpractice at Mid-Staffs had caused more than a thousand premature de
aths. Searching through the statistical records of fourteen other hospitals starting in 2006, he calculated that there could have been an additional 19,000 premature fatalities, an extraordinarily high figure. Compared to other European countries, Britain’s premature death rates were higher and clinical outcomes worse.

  A hint of the decay within the NHS had been highlighted in May 2005. Just after the election, Warner had sent Crisp and Hewitt a message about his ‘serious issues of concern about how the extra money we have pumped into the NHS is being managed’. Crisp admitted that the NHS’s accounts for the £76.4 billion budget were ‘not meaningful’, and he ignored the warning.

  Four months later, Ken Anderson noticed that the accounts for the previous financial year had still not been produced. ‘What’s the deal with the finances?’ he asked Crisp. ‘Why haven’t the accounts been presented to the board? They’re six months late.’

  ‘It’s all very delicate,’ replied Crisp.

  Anderson asked a secretary in Crisp’s office for the records. His examination revealed that ‘Crisp had no control over costs and didn’t have a clue what to do.’