How politicians took back control of the NHS, Part 1

The NHS – for the Labour party especially – is an overtly political health system. No wonder, then, that the driving belief of the current ministerial team is that to heal the service, they must administer a strong dose of political direction.

It was this thinking which caused team Streeting to “bite the bullet” – as one senior figure described it to me – and announce the full abolition of NHS England.

They had quickly become tired of the time NHSE was taking to convert the new government’s ambitions into action. One figure close to the decision says that by early 2025, ministers had decided there was a “fundamental inefficiency” in working through NHSE. Health and social care secretary Wes Streeting “was feeling like he’s got half a lever to do anything… [But] he’s going to be on the hook for delivering. Over time he just thought, ‘why?’”

A senior official at the time confirms: “I think NHSE wasn’t seen to be as ‘can do’ as would have been desired…There was a feeling that we were more [inclined to say], ‘Well, no, you can’t do that for these reasons.’”

Other factors played a part as the decision to abolish the arm’s length body crystallised. The government needed a quick, strong headline. They wanted to offer cost savings to the Treasury. And Alan Milburn, who had been prosecuting the argument to scrap NHSE since before the election, was becoming ever more influential.

But ministers, sources say, also had a deeper motivation – a need to overcome a “wider alienation from politics, political structures, and [from a belief] that the state works for people, not least in health”, according to one person familiar with their thinking.

The development of the 10-Year Health Plan was forcing ministers to think longer term. In this context, retaining an all-powerful arm’s length body – which is “so separate from overall accountability” – was “just not sustainable”.

Meanwhile, the political team also felt they had to expend significant time and energy restoring discipline in their own department. Many civil servants did not “know a time when it was normal to have a more directive politics”, having learned their behaviours during the covid crisis and under Conservative governments, which “didn’t want much to happen in health”.

The (lack of) funding

After what had been a fairly harmonious first few months under the new government, it was tensions over money, predictably, that turned things sour at the top.

The new government’s first Budget on 31 October 2024 proclaimed “a £22.6bn increase in the day-to-day health budget” over two years.

The inadequacy of the settlement was quickly revealed, as NHSE leaders had to repeatedly explain that little to none of the increase would be left, after it had covered the sizeable pay rises government had agreed with staff, including resident doctors, and other cost pressures. It also had to battle to find cash to sustain – albeit in a limited way – the “uncapped” elective recovery fund inherited from the Conservatives, but not covered in the Department of Health and Social Care budget.

Says one senior official involved at the time: “What [ministers] really wanted to do was go ‘look, we care about the NHS, [the new funding] is going to make a huge difference to you on the ground and mean we can do a lot of the cool fancy things we want to do’. They appeared to forget that they’d already agreed to a pay deal [which would swallow most of the extra money].”

The official continues: “But basically the NHS was saying, ‘well, we agree that you want to do all these wonderful things, but by the way, the money is spent, there’s not really anything much left. Then [ministers] got really cross. They got quite frustrated about the fact that they’d taken a massive political hit on [increasing] national insurance contributions [and had little in return].”

These tensions fed into what became a watershed period during winter 2024-25, leading to the government’s drastic plans to abolish NHSE and overhaul local NHS accountability.

Questioning the NHS

The Labour team are convinced that the public’s faith in the NHS’s ability to deliver a decent, modern service has been dangerously eroded. Unlike in 1997, when Labour’s “24 hours to save the NHS” slogan was a huge exaggeration, the team see more and more voters paying to go private, and honestly believe the universal service could lose widespread public support.

As well as complaints about long waits – especially for planned operations and to contact the GP practice – the political team has heard directly from voters that they have lost patience with the NHS’s abysmal admin, communications, and technology.

One source close to their thinking says people, especially those who are younger, are asking, “What do you mean I’ve got to wait for a letter?” They describe this as a “hygiene factor” symptomatic of the NHS’s failure to keep up with the experience offered by other services.

Another adviser reiterates that patients feel “lost in the system”, something they are convinced that “better functionality on the NHS App” can address.

Rather than arguing for more money, the political team see their main role as grinding more out from what they have – and trying to persuade the noisy health lobby this is the only feasible path to take.

The political team believe many NHS staff themselves understand this – some are among those despairing and going private. But they also know morale is a real problem, which they need to do more to fix. Says one source: “We have to show [staff] that this can get better… We can’t do it without them, and we don’t want to do it without them.”

Between now and the end of 2025 – as well as navigating industrial disputes – the government must try to land an NHS workforce plan containing potentially unpalatable messages about cutting numbers in some staff groups, working flexibly, breaking down professional roles, and delivering a step change in productivity.

Part two will look at the government’s comprehensive reset of the people making NHS policy, and how it plans to drive delivery.

Steve Black is away and will return in two weeks.