Steve Richards: An injection of common sense, or the promotion of a reckless revolution?

David Cameron confirmed that he wants power within the NHS devolved to individual hospitals

In the mid-1990s Tony Blair hailed proposals that were cautiously incremental as revolutionary. If Mr Blair visited a council estate the excursion became a welfare revolution. The youthful Labour leader also spoke excitedly of a revolution for the NHS and a revolutionary constitutional settlement.

Following assiduously the New Labour bible on how to win elections, David Cameron deploys the same messianic language. In his new year BBC interview last Sunday, the youthful Tory leader held out the prospect of several revolutions, specifically in the areas of social responsibility and the delivery of public services. It seems that Britain dances to non-stop revolutionary tunes, becoming the European equivalent of Cuba if only in terms of uplifting political vocabulary.

There is, though, an important difference between the young Mr Blair and Mr Cameron. I suspect that, as a New Labour leader, Mr Blair felt genuinely that he was being bold and radical, when he was being recklessly cautious. In contrast, I sense that Mr Cameron feels he is being restrained and pragmatic, seeking out the political centre ground, when what he proposes is, in fact, recklessly revolutionary.

In his BBC interview, Mr Cameron confirmed that he wanted power within the NHS to be devolved sweepingly to individual hospitals. He agreed that, if there were an MRSA crisis in a hospital, the government would not get involved or accept culpability. Similarly, if a hospital sought to cut pay to save money, that would be a matter for the local managers. He sought to cast the policy in a positive light.

"If you take many hospital trusts in the south of England, they have a huge problem in recruiting and retaining staff. In my area, there is often 14, 15 per cent vacancy rates for nurses. Now in business, in industry, managers have greater freedom to arrange pay and other remuneration to make sure you can get the people you need."

On one level Mr Cameron is right. National pay rates imposed irrespective of cost of living and performance are damaging, inefficient and iniquitous. But if the government remains responsible for the overall level of spending and its distribution I cannot see how it steps aside from the decisions as to who gets paid what.

Is Mr Cameron suggesting that, in the South, hospitals would spend more on wages and less on other services? Or is he arguing that the government would give hospitals in the South more cash overall in order to pay higher wages even if they chose to spend money elsewhere instead? In which case, would those in other parts of the country get less cash on the assumption that they would pay lower wages? Whatever the answers, the central government is already waving its stick and unavoidably so.

Yet, according to Mr Cameron, a Tory Chancellor would take the political risk of deciding how much to tax and spend on the NHS and that would be more or less the end of its role. If some hospitals wasted the money raised centrally, the government would declare: 'This is not a matter for us.'

The Tory leader takes us to a fantasy land. That is partly because the media would not allow the government to walk away. Look what happens when there is a train crash on the privatised railways or when market mechanisms in the NHS lead now to some hospital closures.

But there is also a matter of principle. The government has a responsibility to make sure that the cash it raises through taxation is spent wisely. If it fails to do so, voters can remove the government. There is accountability between the elected and the voters, an under valued dynamic. In Mr Cameron's hybrid vision of centrally raised cash and local autonomy there is no robust accountability.

Mr Cameron is not alone in struggling with this problem. The appropriate relationship between central and local in the delivery of services is the great challenge of our times, the source of more tensions between Blair and Brown than any other issue and one that will continue to be a cause of internal angst for Labour when Mr Brown succeeds. But it is a hugely complex struggle and in Mr Cameron's interview he made his solution sound engagingly straightforward, a painless revolution.

The wildly confused controversy over Ruth Kelly's decision to send her child with special needs to a private school highlights theunresolved chaos.

Superficially, the reaction appeared to endorse Mr Cameron's call for the state to step aside. Several newspapers concluded, in the words of the Financial Times, that no "centralised system will ever deliver the innovation, variety or responsiveness" required by parents. They wanted schools liberated from the state as they competed for pupils. Mr Cameron conjures up a similar image in relation to hospitals.

But the problem in relation to Ms Kelly and the lack of state special schools arose for precisely the opposite reason. The Government had let go too much. It had not centralised enough. Here is part of a letter published last week in a national newspaper from parents of a child with dyslexia: "The Government claims funding has been passed down to individual schools to spend as they see fit. But there is no mechanism to ensure that funding for educational support is actually spent on the most needy children."

The parents' complaint is that the Government had not been prescriptive enough. In theory, the Government has increased spending substantially for children with special needs. But at the same time it has followed the fashion of sending the cash directly to the schools, giving the heads a fair amount of freedom to decide how to spend it. Not surprisingly, the heads spend the additional cash in ways that propel their schools up the league tables so they qualify for more cash. The competitive, more liberal environment means schools ignore the weakest.

Now Mr Cameron hails an even more extreme vision for hospitals. There will be few, if any, national standards (another term for targets) and a free-for-all for local hospitals. If anything goes wrong, a Health Secretary will stand up in the Commons and state: "This is a matter for the local managers. You won't be hearing from me until I announce how much of your taxes will be spent on the NHS. Thank you and good night."

In a tonal U-turn, Mr Cameron has started to mention Mrs Thatcher more often. He cited her approvingly six times in an article yesterday. But, in terms of substance, the gap has never been that great between the former and current leader. Oddly, Mr Cameron has not lifted from New Labour's lexicon the phrase about applying traditional values to a modern setting. Yet this is the closest to explaining his project for the Conservative Party. Those right-wingers contemplating a defection to UKIP should relax. Mr Cameron is closer to their heroine than they realise.

s.richards@independent.co.uk