Blair forced to shelve NHS reforms

Tony Blair is to shelve reforms to the structure of the National Health Service because of concern that they have stalled the drive to improve patient care.

The Prime Minister is to accept a recommendation by Adair Turner, one of his principal Downing Street health advisers, that there should be no structural change to the NHS for at least five years. There is mounting concern among ministers that people will notice little benefit before the next general election from the extra money being pumped into the health budget.

Mr Turner is understood to have warned in a report submitted to Mr Blair that the £40bn boost for health spending announced in the last Budget could take years to make a significant impact on services. The former director general of the Confederation of British Industry, who is now a member of the Prime Minister's Strategy Unit, calls for the changes since 1997 to be given time to bed down before more are made.

His report will be seen as a tacit acceptance that Labour has spent too much time tinkering with the system since it came to power. Labour has abolished the 95 health authorities and set up 28 strategic bodies and 300 primary care trusts. It has also created a Commission for Health Improvement, a National Institute for Clinical Excellence and announced an independent regulator and inspectorate to cover both the NHS and private sector. A Whitehall source said: "The feeling is that every time you have a shake-up, it costs you about a year in terms of making progress. It soaks up time and energy which could otherwise be put into patient care." The moratorium will be warmly welcomed by NHS managers, who have complained about the upheaval and a blizzard of initiatives from Whitehall.

The move is expected to receive a more cautious welcome from Alan Milburn, the Health Secretary. He has no plans for further large-scale change, but wants to retain the right to fine-tune the system, for example by allowing trusts to merge.

Mr Milburn is unrepentant about the changes, arguing that structural reform was needed to make the new money work. He believes the Government has now got the right system, with standards set nationally, monitored independently and delivered locally by staff with more freedom from Whitehall. But one source said: "Five years is a long time and you can't rule out some minor changes."

The moratorium will not halt Mr Milburn's plans to create a network of prestige foundation hospitals with more freedom from Whitehall.

The Independent disclosed in June that Mr Turner had urged Mr Blair to shelve the experiment until the capacity of the NHS had been increased. He warned the move could create a two-tier NHS, with the foundation hospitals creaming off the best staff and paying higher wages.

But Mr Blair decided to go ahead after listening to Mr Milburn, who wants to name the first hospitals achieving the new status this year.

Mr Milburn is also fighting off criticism of his plans for foundation hospitals from the Chancellor, Gordon Brown, who opposes the Health Secretary's move to allow the new-style hospitals to raise their own funds.

The Treasury fears that the proposal would result in a back-door rise in public spending and would drive a coach and horses through the Government's financial controls.

The Turner report plays down fears of a "demographic timebomb" caused by people living longer, because most patients' cost to the NHS accumulates only during the final 12 months of their lives.

Mr Turner's report calls for a major improvement in the computer systems used by the NHS. He believes that mistakes, delays and incompatible equipment have held back the Government's efforts to modernise the service.