Milburn: Private sector is part of NHS family

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The National Health Service will not survive in today's consumer-orientated world unless it puts patients "in the driving seat", Alan Milburn, the Secretary of State for Health, said.

His "modernise or die" message, in an interview with The Independent, came on the day he deepened the Government's relationship with the private health sector. From next year, 180,000 patients on waiting lists for more than six months will be allowed to have their operations in any NHS hospital or at a private centre.

"The NHS is a nationalised industry which has been controlled from Whitehall for 50 years, so the Government has always put the interests of the service rather than the patients first," Mr Milburn said. "That is what is going to have to change, and big time. Otherwise, in today's consumer society, the NHS will not be sustainable.

"I passionately believe it has got to be sustainable if we are going to have a decent and fair society."

What is needed, according to Mr Milburn, is nothing short of a cultural revolution that turns a "top-down, old-style state monopoly" on its head. "I don't believe the public will stand for public money being poured into the NHS without getting something out of it," he said. "All too often, the NHS adopts a take-it-or-leave-it attitude towards its consumers."

This week Mr Milburn has issued a series of announce-ments designed to stress the Government's commitment to NHS reform, including the decision that a Bupa hospital will become the first of 20 "express surgery" centres.

His timing is deliberate: there were fears in Downing Street and the Health Department that the "reform" message got lost when Gordon Brown made the issue the centrepiece of his pre-Budget report last week.

The buzz in Whitehall is that the Chancellor made a virtual takeover bid for Mr Milburn's empire and there are signs of tension between them. In a newspaper interview, Mr Brown perhaps let his true feelings for the Secretary of State show when he referred to him throughout as plain "Milburn." Mr Milburn did not respond in kind, talking about "Tony and Gordon" with a smile. But he hinted at the rather messy presentation of health policy since Mr Brown's draft Budget, which provoked criticism that the Chancellor prejudged the "debate" he launched by saying the NHS would continue to be funded from general taxation.

"The position is helpful because it allows a debate, in the Labour Party, too," Mr Milburn quipped in a gentle dig at Mr Brown. "We should have a debate, not least because the supporters of alternative funding systems have it too easy. We should be intellectually confident enough to take the battle to them."

The Treasury hints that it sees the use of the private sector as a stop-gap until the NHS is restored to full health. But Mr Milburn takes a different view, describing private-sector providers as a "member of the NHS family".

"This is not just a stop-gap," he explained. "If you are going to have a more responsible, choice-orientated system then you need more diversity and plurality. We should be candid about this: it is a relationship not just for the short term but the long term."

The Health Secretary is dismissive of the trade union attacks on his policy. "So what if someone is treated in a Bupa hospital?" he asked. "I understand that this is uncomfortable for some people [in the NHS]. But it is more uncomfortable for people waiting in pain for an operation."

There are also simmering tensions with the Treasury over whether there should be a special "health tax" to persuade people to pay the higher taxes needed for the NHS. The Treasury opposes earmarking taxes, or "hypothecation" as it is called in Whitehallese. The Health Department, predictably, is interested in anything that could boost its budget. The compromise could be that future tax rises are ring-fenced for health but the existing NHS budget is still funded from general taxation, which would suit the Health Department very nicely.

"There should be a debate," Mr Milburn said. "There are upsides and downsides to full hypothecation. But I am crystal clear about one thing: we need to build a bridge of trust between taxpayers paying for services and the services they they get, between what they put in and what they get out."

Some ministers try to adopt a low profile and keep the lid on their departments. That is not an option for Mr Milburn. He admits that reforming the NHS is "the biggest challenge facing the Government". But he is convinced only Labour can "save" the NHS it created, by sticking to the service's core values – a universal system, based on clinical need and free at the point of use.

As Labour embraces the use of private hospitals, he suspects the Tories will be left with a policy of asking people to "opt out" of the NHS by paying for private treatment. "We want people to choose to stay in the NHS," he said. "I don't believe you can create a One Nation Britain or a fairer society on the basis of a two-tier health care. That would be a tragedy for this country."