Editor's blog 28 July 2008: Investing for outcomes

Good evening - good, that is, if the thunderstorm has passed you by yet, taking with it the louring humidity. The initial rainfall was dramatic and short - which is as good a segue as I can manage to the thoroughly good news that Film Four are this week running a series of classic Ingmar Bergman films, which share both those qualities.

Those of an insomniac disposition can acquaint (or re-acquaint) yourselves with The Seventh Seal, Wild Strawberries, Smiles Of A Summer Night, Persona, Summer With Monika. Brilliant and economical film-making and storytelling, which I can't recommend strongly enough. Get a little Bergman into your life. You'll thank me for it.

It has been a funny couple of weeks in policy. In his Health Policy Today column, Tom Smith pointed out the dramatic news, unnoticed almost everywhere, that local government's control over PCTs has been significantly extended with councils' new duty to respond to petitions. The document also states that "Councils will also act as community advocates for petitions related to the Primary Care Trust".

Meanwhile, the voters of Glasgow East delivered a Glasgow kiss to PM Gordon Brown, bucking many opinion polls by returning the SNP candidate.

The PM is out of luck in a big way at present. His telegenic opponent David Cameron is making the running in the media - the Sunday Mirror's reuniting of Cameron with his stolen bike was just the kind of thing that would have happened to Tony Blair (in 1995-7).

Political commentators are now starting to seriously discuss a Labour leadership challenge - although the reforms to the electoral process will leave any declared opponent to Brown needing 20% of the Parliamentary Labour Party to back their bid.

Health has of course been a keynote battleground in Cameron's impressive and successful campaign to 'decontaminate' the Conservative brand. Critics who argue that the Conservatives are proposing no policies have not been paying any attention.

On the NHS alone, a Conservative government is committed to create an independent management board; to abolish all national targets and focus on outcomes; let Monitor lead regulation; force PCTs to cease provision and focus exclusively on commissioning; and to re-create the Department of Health as the Department of Public Health.

Cameron has also taken the unusual step of guaranteeing that were he to become PM, his able and NHS-literate health spokesman Andrew Lansley will be guaranteed the cabinet job. This is almost a miniature reflection of the infamous Blair-Brown 'Granita deal' - albeit one that is fully in the public domain (and Lansley is not reputed to hate or resent Cameron).

Politics is a funny old game. It is not long since Lansley sat in the media suite at the 2004 NHS Confederation conference, defending former Tory health spokesman Dr Liam Fox's 'patient's passport' promise of subsidising private elective patients to up to 50% of the NHS tariff cost of their treatment. Anyone with any insight could see in his eyes that he knew the policy in question was a dog.

Yet gamely, with a dutiful sense of collective shadow cabinet responsibility, this committed free marketeer and former PPS to Norman Tebbit sought to defend a policy of subsidising the well-off to opt out of the NHS. He convinced no-one in the quality of that policy; but was clearly focussed and disciplined: key qualities of an effective opposition.

While researching his website, I clicked into a speech Lansley gave to the NHS Confederation in the aftermath of the Conservatives' 2005 electoral rejection. One phrase stands out strongly: "Competition and choice are not just slogans. They are a policy whose time has come."

This was, of course, three years ago, when many remained sceptical about the likelihood of success with the 18-week RTT target. Commissioning had been invented, but was not then envisaged as 'world-class'.

Yet at the present moment, the policy consensus - whether right or wrong - seems to favour the 'integrated care organisation' idea. The currency of faith in competition may fluctuate - and David Cameron, in particular, took shocked exception to a question I asked him at a Kings Fund presentation about Professor Sheila Leatherman's findings that no published research evidence shows that competition increases quality in healthcare.

In reply to my question, Cameron merely stated that he believed competition must improve quality in healthcare, as it did so in all other areas.

Meanwhile, as Lansley and Cameron are up, PM Gordon Brown is down, louring himself - but without the humidity.

It will be interesting to see whether the consensus statement pulled together at Labour's national policy executive over the weekend will change the rhetoric on "investment" in health.

In many post-industrial areas (which would once have been Labour heartlands), the NHS is a major employer - in some, it is the main one. Should the economy continue to tank, Keynesian economic remedies may force a re-appraisal of the semantics around "investment" in public services.

Spending cuts will look a toxic option; yet government borrowing is already probably in breach of the 40% of GDP 'golden rule'. House  prices are proving that they do, finally, return to obey the law of economic gravity. This is not only making people feel poorer (which, unless they are selling to downsize or exit the market, they are not), but denying the exchequer tens of millions of revenue in stamp duty.

Brown will not be counting himself out yet - although he is thought to recognise that this puts him in a tiny minority in UK public opinion. His hopes will rest on a very quick economic turnaround, with falling oil prices due to moderating demand over the coming six months allowing cuts in Bank of England interest rates to deliver if not a 'feel-good' factor, then a 'feel-better' one.

At present, this looks like a long-odds gamble.

The Great British Shopper appears reluctantly, belatedly, to have started to tighten their belt as the past decade's thunderstorm of credit has dried up. Whether sufficient spenders remain untroubled to keep the UK's frothy economy steady (if not growing) in the interim is unknowable. It is also probably Brown's best chance.