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Tory doubts over NHS funding pledge

12 July 10 01:42
Hospital ward
By Norman Smith
Chief political correspondent, BBC Radio 4

For all the reforms in the NHS White Paper, the one defining policy of the government towards the health service is the ring-fencing of its budget.

Of course the NHS will not be a cuts-free zone - it is expected to find efficiencies of £20bn by 2014 - but as other government departments groan and stagger under whopping great cuts of up to 40%, the NHS will enjoy real terms increases in spending.

It is for David Cameron, seemingly, a non-negotiable policy, one designed to reassure sceptical voters that the health service is safe in Tory hands.

And yet privately many Tories think it is daft and should be dropped.

'Business as usual'

How, they argue, can the government get to grips with the deficit if the second biggest spending department, with a great hulking budget of more than a £100bn which employs a quarter of all public sector workers, does not have to bear its share of the pain.

Indeed, given the health service enjoyed a three-fold increase in spending under Labour, disgruntled Tories believe there must be much more fat to cut in the NHS than in other leaner, more efficient areas of government.

Not surprisingly, ministers in other departments are also not huge fans of a NHS ring-fence that forces them to take a chainsaw to some of their own treasured spending projects.

But it is not just about the money. It is also about the reform agenda.

How do you encourage innovation and change in the health service if you have already guaranteed NHS managers extra money for just carrying on as normal?

Even some health service experts, like the former head of NHS London Sir Richard Sykes, are critical, warning it will lead to "business as usual - thank you very much!".

And yet for all this unhappiness few Tories are willing to go public with their misgivings for fear it would be interpreted as an attack on Mr Cameron.

They have, however, not entirely given up hope of getting rid of the ring-fence. Or rather they are hoping their Lib Dem partners might be able to do the job for them.

The Lib Dems, it is noted, have always been highly critical of the policy.

Before the election Vince Cable said: "There can be no ring-fencing if we are serious about getting the public finances back on track."

Greek crisis

So, muse Tory MPs, if it proves impossible to find the necessary savings in other departments and the markets get restless then perhaps Nick Clegg could be encouraged to tell Mr Cameron it is time to revisit ring-fencing.

After all, Mr Clegg has taken a big hit on VAT. Perhaps Mr Cameron, for the good of the coalition, should be prepared to do the same on the NHS.

And anyway, if the markets scent the deficit reduction plan is not delivering, then maybe Mr Cameron will have no option but to cut NHS spending if he wants to avoid a bit of Greek-style financial surgery.

More cautious Tories say the NHS pledge is too important to Mr Cameron. For him it is an issue of trust. They say he believes that the electorate would not forgive him if he broke the ring-fence promise.

But then again, argue Tory critics of the policy, couldn't Mr Cameron just say that the financial situation was much worse than he thought; that Labour have left the cupboard bare and the City are threatening higher interest rates unless the deficit is brought down faster?

And, oh yes, couldn't the prime minister say: "We're all in this together?"

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