Blair plan to 're-nationalise health service'

Trusts and GP fundholders to go
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Public Policy Editor

Labour will recreate the National Health Service as a "single organisation", ending the independent status of health trusts and phasing out GP fundholding, according to the party's long-awaited health policy document, which has been leaked to the Independent.

The document, Rebuilding the NHS, is bound to set off a storm of controversy in the health service. It lays out the ground on which the battle at the next election over the NHS will be fought.

It makes clear that the statutory divide between health authorities and hospitals - which was a key part of the Government's NHS changes - will go, as will GP fundholding.

It will inevitably lead to government claims that Labour's policy is simply turning back the clock, attempting to return the NHS to its pre- reform days.

However, last night senior Labour sources rejected that - saying the proposals honour Tony Blair's promise to "renationalise" the NHS and extend to all the benefits that GP fundholding has brought, without the need for the NHS market.

"We fully recognise there have been benefits in terms of responsiveness and change," one source said. "What we are proposing will universalise that while getting rid of the unnecessary costs."

The document approved last weekend by the party's policy forum is to be published on 3 July - to coincide with the 50th anniversary of Labour's 1945 election victory - after approval by the National Executive.

It says that Labour's "new NHS" will be "a single organisation, working locally and nationally, with shared objectives. Land, building and equipment will belong to the nation and staff will work once more for a truly national, integrated service. By replacing competition with co-operation, the public service values of the NHS will be restored". Trusts will cease to control their own assets and membership of their boards will change. But the paper makes it clear that while the internal market will go, a commissioner/provider divide will remain, albeit within a single organisation.

In place of year-on-year competition for contracts, each trust will have a long-term rolling "Comprehensive Healthcare Agreement" or CHA, covering the services to be provided to specified standards. The agreements will cover both local patients and those from other health authorities, and will be reviewed "on the basis of changing need, improved efficiency and higher quality". Family doctors will be closely involved in drawing them up.

Despite ending the fully independent status of NHS trusts, the document underlines that "we believe there should be a separation in the planning and delivery of health care. We want health authorities to commission care, but we do not want them to run hospitals on a day-to-day basis".

Commissioning health authorities will have "neither the capacity nor ability to become involved in the daily running of hospitals and other service units". One source said the divide between commissioning and providing will be "absolutely firm" and the healthcare agreements will contain "tough targets in terms of both quality and throughput".

But the document says that while it wants innovation and efficiency, trusts will only be able to keep a proportion of any savings they make on their budgets. The remainder will be shared more widely with the community through the health authority.

GP fundholding will go, but Labour will consult on how to do that with the "minimal possible disruption". One "obvious" step is that no new applications will be accepted and those in the preparatory year would not go ahead.

At the same time, GP commissioning schemes, in which family doctors join health authorities in commissioning care and planning all services, will be developed in every district. Labour says, however, that it will not repeat the Government's "grave mistake" of having just one model everywhere. Instead "we will support a diversity of practice which respects the diversity of local need".

In an attempt to keep some of the gains of fundholding, Labour is keen to see GPs being given "notional" budgets that would allow them to switch spending not only between drugs and other treatments, but also between health and social care.