Cowper’s Cut 253: Ironing out a pay U-turn while the strikes are hot!

The Banker channels his inner Mandy Rice-Davies

To add to our national joy during a renewed cold snap in this very worst month of the year, Secretary Of State For Health But Social Care Steve 'The Banker' Barclay has been giving us his unique take on getting on the front foot over the pay dispute.

Writing in The Independent, The Banker claims that NHS front-line care quality problems are not about workforce pay. Well, it's a point of view. Albeit one which Tony Hockley's fine blog from late 2022 rather disproves.

The People's Steve also gamely asserts that "if we provide unaffordable pay rises to NHS staff, we will take billions of pounds away from where we need it most. Unaffordable pay hikes will mean cutting patient care and stoking the inflation that would make us all poorer".

So now The Banker is chanelling his inner Mandy Rice-Davies: "well, he would, wouldn't he?"

It is widely accepted by members of the reality-based community that public sector pay does not drive inflation. Ben Zaranko of the Institute for Fiscal Studies noted that “it is difficult to see how an increase in public sector wages could directly contribute to a wage-price spiral”, given the lack of prices in the public sector.

As the Financial Times' esteemed Martin Wolf put it, "public sector pay should be set at levels needed to attract and motivate the required staff. An upsurge in inflation does not change that logic ... between January 2021 and September 2022, average real pay in the private sector fell by 1.5 per cent, but in the public sector pay fell by 7.7 per cent.

"In fact, all the decline in real public sector pay since 2010 has occurred in the past two years". The FT's Chris Cook has also pointed out the daftness of the Government's pseudo-economics.

Public opinion poll tax

The Government's strategy has been to attempt to tough the industrial action out, in the hope that the public will support them over the strikers.

Again, it's a point of view. So how are the strikes going down with voters and the public? And what do the public make of the ongoing and worsening collapse in NHS emergency services?

A Channel 4 News poll on emergency care response found that 60 per cent of UK adults surveyed said that they are “not very confident” or “not confident at all” that they would get the treatment they needed if they rang 999 for a health emergency. 4 per cent of respondents were “very confident” they would receive the care they required, and 31 per cent were “fairly confident”.

The blame game

Asked to identify who or what was most to blame for problems in the NHS, the most popular answer from those polled was government policy (30 per cent of respondents). 24 per cent picked a shortage of workers; 8 per cent the pandemic; and 7 per cent said immigration.

When asked who they trusted the most to handle issues within the NHS, only 14 per cent of those polled said a Conservative government led by Rishi Sunak, compared to 34 per cent saying a Labour government led by Keir Starmer.

38 per cent picked neither; and 14 per cent didn’t know which they'd choose.

A follow-up one-hour Channel Four News live special broadcast shed much heat but little new light on the NHS crisis causes and issues - let alone solutions.

Ipsos also released recent polling on public attitudes to industrial action.

57% of the public surveyed think that the Government are to blame for the dispute lasting this long: 9% blame the nurses. (The rest were neutral or don't know.)

Ipsos' Keiran Pedley concludes that there are two main lessons from this data: "The public support the principle of unions representing workers, but support for specific action depends on who is taking it / level of disruption.

"The Government is unpopular & more blamed than nurses for strikes. Much more sympathy for workers / unions than for the government typically."

A climbdown cometh?

Bloomberg's Alex Wickham (ex of Guido Fawkes/Order, Order, and so well-connected in Toryland) has a briefed story which suggests that Mr Sunak is preparing a climbdown.

Wickham reports that "Treasury say pay rises must come from existing budgets. Here’s the fudge: departments will say they’ve found billions in efficiency savings and push some spending to future accounting years

"HMT also accepts ongoing strikes will cost the economy a lot".

The piece suggests that nurses may win a settlement of about 9%, in a settlement with cascading implications for other striking industries.

If this story is correct, then the politics of this coming climbdown are going to be fascinating. Likewise the economics. Junior doctors and consultants are yet to announce the results of their strike ballots, but it seems likely that both would take action.

This climbdown will surely embolden them.

Indeed, Shaun Lintern of the Times/Sunday Times spotted that junior doctors in the small Hospital Doctors Union voted 95% for strikes, on a 75% turnout.

A lame-duck SOS

More to the political point, 'Treasury Hard Man' Steve 'The Banker' Barclay's orders from Numbers 10 and 11 Downing Street  to be intensely muscular with strikers look set to leave us with a lame-duck Secretary Of State For Health But Social Care, as well as a fiercely-Government-backed yet obviously-broken 'independent' pay review body system.

The Banker told broadcasters this week that "10% is not affordable, it would be an extra £3.6bn a year and obviously that would take money away from patient services, essential services that we need to invest in given the backlogs from the pandemic".

He's such good value! As we all know, most of the waiting lists (4.4 million, of the 7.2 million) pre-date the start of the pandemic.

The NHS will not stop being on fire because the Government settles with the RCN, of course.

The absence of any meaningful plan of how to deliver the publicised 130% of pre-pandemic acute activity is now even more important, given the length of the waiting lists, and the lost activity due to the industrial action so far.

Data on the lost patient care activity due to the strikes can be accessed here: there were 22,582 staff absences owing to the RCN's strike action on Wednesday and Thursday this week. Over those two days, 27,826 scheduled inpatient elective procedures and outpatient appointments had to be rescheduled.

And Tory MPs and supporters will surely marvel at the political strategy that has seen the Government climb down spectacularly after taking all this pain for no gain. On taking over unelected from Liz 'The Lettuce' Truss, Mr Sunak vowed "I will place economic stability and confidence at the heart of this government’s agenda". One must have a heart of stone not to laugh.

Wickham signs off with the suggestion that the political "strategy as it stands is to spend any economic windfall on tax cuts pre-election in autumn 2023 or spring 2024".  Mmmmmmmmm.

Rolling the pitch

This Government climbdown clearly needs some pitch-rolling, and NHS England boss Amanda Pritchard was out to work early on Saturday morning, telling BBC Radio 4's Today programme that "as the strike action is extended over long periods of time, and as those dates start coming closer together, it does get more challenging, there is absolutely no doubt. It is clearly having an impact."

Ms Pritchard also stated, “my sense is that everybody is looking to try and reach a resolution.”

It's frightfully public-spirited of Amanda to be rolling the Government's U-turn pitch for them. I'm old enough to remember when the chief executive of NHS England was a weather-maker, rather than a groundsman. Autres temps, autres moeurs.

Why now?

Why is this suggested U-turn on pay happening now?

The biggest clue will come in the next set of polling data from the long-running Ipsos 'Issues Index' of UK voters' spontaneous concerns, to be released this coming week. Ipsos chief executive Ben Page tells me that voters' spontaneous concerns about the NHS rose from 27% in December 2022 to 42% in January, overtaking the economy and the cost of living in one jump following the strikes.

I've long wondered aloud if the key political moment of truth for this NHS crisis would be in the vein of the Robert Winston intervention on the NHS crisis that preceded the 2000s NHS funding and reform turbo-charge (more on which below).

How telling a moment it will be if in 2023, it is old-school industrial action, rather than a New Statesman interview with a celebrity on their mother's awful care, that finally drives the penny to drop.

LOTOQs

I can't really call Prime Minister's Questions by that name any more, as PM Rishi 'The Brand' Sunak is basically turning it into Leader Of The Opposition Questions.

Mr Sunak is nothing if not consistent: he attempted to answer every one of Labour leader Sir Keir Starmer's six questions on the ambulance/A&E crisis with references to the Government's planned 'minimums safety level' anti-strike legislation.

It is unlikely that a focus on NHS services' safety will rebound to the credit of a Government that has been running the country since 2010, winning three General Election majorities. It is a mighty act of optimism for Mr Sunak et al to believe that they will be able to shift the blame onto the opposition.

Polling says no

Happily, Ipsos have also done research on Mr Sunak's five New Year's Prime Ministerial pledges:

It is quite damning.

55% of respondents believe that the Government will do a bad job on reducing waiting lists, and 54% believe that they will do a bad job on ensuring people get the NHS care they need more quickly. (19% of respondents believe the government will do a good job on both, with the rest 'don't know or neutral').

In Keiran Pedley's phrase, "the Conservatives are in a particularly bad place on the NHS".

The net comparison with a hypothetical Labour Government under Sir Keir Starmer is telling. The public do not profess abundant faith in Labour - but significantly, Labour is ahead of the Conservatives on most economic issues (and they are only four points behind on reducing the national debt).

Economic credibility remains a big barrier to getting into government for Labour: it will be interesting to see if Ipsos repeat these questions over coming months.

Open democracy

The campaign group Open Democracy has used Freedom Of Information requests to establish who attended December's 10 Downing Street NHS Summit (Elective Recovery Taskforce).

PM invited seven private health bosses to NHS crisis meeting

Lobbyists for private health corporations were among those tasked with shaping proposals for NHS recovery plan

openDemocracyAdam Bychawski

The FOI revealed that "half a dozen CEOs from private health firms were in attendance. Guests included the chief execs of the UK’s two largest private hospital operators: Paolo Pieri, the chief exec of Circle Health Group, and Justin Ash, who heads up Spire Healthcare. Also present was Jim Easton, the chief executive of Practice Plus Group, the NHS’s top private healthcare provider.

"The private healthcare executives, which also included CEOs from Horder Healthcare, Newmedica, InHealth and Medefer, outnumbered the five NHS England directors invited to the event. DHSC said it could not provide openDemocracy with minutes from the meeting because none were taken, and refused to share any papers handed out to attendees."

The Elective Recovery Taskforce membership and terms of reference were published this week. "The terms of reference will last for the duration of the taskforce work on whether and how the independent sector can go further to help tackle the elective care waiting list. This is expected to begin in December 2022 and conclude in March 2023."

Oh good: another commission

Like the 111 bus (on non-strike days), there'll be another commission on NHS reform along shortly.

The latest in the queue is by The Times, joining Reform's current effort 'Reimagining Health' (which has gone very quiet). Or there was the LSE/Lancet commission, from 2021. There have been so many ...

The Times effort has even roped in Stuart Rose, whose much-delayed 2015 report for David Cameron's administration was startlingly bad and pointless.

To be fair, there have been some OK pieces published under this commission's aegis. There has also been ex-SOS Sajid 'The Saj' Javid's witterings about charging for user access, and that "the 75-year-old model of the NHS is unsustainable. And unless it is radically reformed, the principles on which it was founded cannot survive much longer".

Mmmmmmm. If not mmmmmmmmmmmmmmmmm. In his memorable-for-all-the-wrong-reasons March 2022 speech, The Saj asserted, "Nye Bevan believed we needed the NHS: a world-class health service, free at the point of use. So do I."

It's bizarre for The Paper Of Record to be taking the man who claimed that the NHS was "a Blockbuster service in an age of Netflix" and who gave probably the worst speech as a Health Secretary ever at all seriously , but to each their own.

The Saj even asserts that "we pour ever greater amounts of money into the NHS but become increasingly unsure as to where exactly it ends up": an heroic untruth.

The FT's Martin Wolf offers this clear corrective to the prevailing magical thinking about changing the funding models for our healthcare system. Wolf's succinct summary should be tattooed across the insides of imbecile aspiring policymakers' eyelids: "The most important points in the economics of health are that it is both a public good and a private risk. The former means that everybody benefits from living in a healthy society. The latter means that all but the richest need insurance.

"But if healthy people who like to take risks are not in the pool, insurance becomes prohibitively expensive and insurance companies expend huge effort on excluding those most likely to need it".

Talk about commissions for fundamental NHS reform (doubtless 'thinking the unthinkable') tends strongly to be simply self-soothing displacement activity. Its only likely outcome is to move attention and debate away from the hard, unglamorous slog of durable change management. Health Foundation director of policy Hugh Alderwick made this case rather eloquently in the BMJ recently.

Experts in the sector know what the problems are: the issue is that neither the NHS's national nor its political leadership seems to grasp the agenda.

I'd forgotten this line from the HSJ/Serco Hospital Care For Frail Older People Commission's final report, from March 2015 (God, I'm old): "Although these demographic and demand changes have been coming the NHS’s way for decades, we still seem oddly surprised by rising demand for care from our longer-lived frail older fellow citizens.

"The NHS needs a new unit of measurement for the hugely obvious: we suggest that the unit of measurement should be “the Nicholson” – a tribute to NHS England’s inaugural chief executive Sir David Nicholson’s observation that the Lansley NHS reforms required “such a big change management, you could probably see it from space”."

There’s is one NHS commission/review worth revisiting, of course: the 2002 Wanless Review. Happily, the great Nick Timmins did this in June 2021, for the Health Foundation.

'The Most Expensive Breakfast In History' absolutely bears re-reading for anyone who's genuinely curious about the main reasons how and why we got to where we are today via the 2000s improvements: "growth in health spending quickly fell short of all Wanless’s projections. The shortfall accelerated after 2008/09, such that by 2017/18 a £45 billion gap had opened between annual spending and that projected under the solid progress scenario – a 22% shortfall.

"This illustrates how, despite health continuing to receive modest real-terms increases after the financial crash, a near-decade of austerity took its toll. Even now, increases in line with the NHS England settlement (projected values for 2022/3) will do little to close that gap."

Is VPAS doomed?

Eli Lilly and AbbVie are pulling out of VPAS (the voluntary scheme for branded medicines pricing and access), the Boris Johnson Fanzine reports. VPAS is a long-standing agreement between pharma companies, the Government and the NHS: its aim was to limit the cost of drugs for the health service while supporting industry innovation.

VPAS limits the health service’s branded medicines bill: all pharma companies who participate get a charge if the bill rises more than two per cent annually.

This charge has risen fast over recent years: the BJF reports that "as of December 2022, the payback rate was set at 26.5 per cent. Before the pandemic, the rate was about five per cent". Firms who leave VPAS are regulated by the alternative statutory price scheme imposed through law, not via negotiation: it typically carries higher repayment rates.

Palantir’s founder's Union speech takes Foundry a hostage to fortune

Trump-supporting billionaire libertarian Peter Thiel is the founder of data firm Palantir (on whose health advisory panel I am paid to sit, to declare my interest). This week, Bloomberg reported Thiel’s wholly-in-character comments to Oxford University Union on the NHS's defects, and on the British public’s affection for the NHS being “Stockholm syndrome”.

Thiel told students that “the first step is to get out of the Stockholm syndrome". He proposed that the NHS needs “market mechanisms” to fix it, including privatisation, avoiding rationing and loosening regulations. “In theory, you just rip the whole thing from the ground and start over. In practice, you have to somehow make it all backwards-compatible in all these ridiculous British ways.”

The Palantir founder also said, "highways create traffic jams, welfare creates poverty, schools make people dumb and the NHS makes people sick".

Mmmmmmmmmmm. It's the kind of nuanced, in-depth analysis you'd expect from someone who's read a few of the less cogent right-wing think-tank op-ed articles: something from the Cato Institute, maybe.

Thiel clearly isn't a total fool: Palantir is a highly effective company, and as the FT reports, his venture capital firm unwound its cryptocurrency investments before the recent crash. Neither is he an expert in health systems.

The timing of his comments is particularly brilliant, given that NHS England's Federated Data Platform contract worth £360 million has just been published. Palantir will doubtless be among the bidders, given their successful delivery of the NHS Datastore based on their Foundry product, used extensively to plan and deliver during the pandemic and the vaccines rollout.

Palantir's competitors will, rightly, have a good laugh about this. As health policy guru Taylor Swift so nearly put it, Trump-supporting tech billionaire libertarians gonna Trump-supporting tech billionaire libertarian.

Cronyvirus and coronamillions update

A long-running theme in this section has been the literal and metaphorical fortunes of VIP fast-lane graduate and Tory peer Baroness Mone-linked PPE Medpro. The firm are being sued by the Government for delivering defective and unusable PPE.

PPE Medpro director and Baroness Mone’s husband Douglas Barrowman was again in the news this week: three payment programmes operated by a company linked to him have been named as tax avoidance schemes by HM Revenue And Customs.

Former vaccines minister and Conservative And Unionist Party chair Nadhim Zahawi’s tax affairs, over profits from the sale of YouGov, remain in the spotlight. Tax legal expert Dan Neidle’s analysis and commentary are definitive

Recommended and required reading

Last week, I highlighted Sam Freedman's ‘Is the NHS in a death spiral?’ blog as the best piece I'd read in a while: his follow-up, replying to and incorporating comments, including from former senior Treasury/Bank of England mandarin (and now NHS Trust chair) Sir John Gieve, is also a must-read. (Freeman’s speech to the Institute For Government Annual Conference is here).

Accurate overview of the political impact of the NHS crisis in The Observer by Professor Rob Ford

Decent BBC News piece on some NHS initiatives to improve care and slow demand on services.

Observer feature on what I guess we must now call medical travel.

Nigel Edwards announces his departure as Nuffield Trust chief executive: his recent 'Through the Looking Glass' mythbuster series shows why we'll miss him.

Smart initiative from Layla McCay of NHS Confederation, doing a Friday Twitter thread to report what the Confed hear from their members about the NHS crisis.

The Boris Johnson Fanzine rather belatedly realises that the NHS crisis is driving people with the money to go private.