This week: Nicky Morgan, Conservative MP and chair of the House of Commons Treasury select committee.

Why she matters: The former education secretary (and Treasury minister) was one of the Cameroonians purged from government by Theresa May in 2016. But a change of leader may well see her return to Cabinet – very possibly as health secretary (a job she clearly covets). In the meantime, she chairs the Commons’ most powerful committee.

[Note: this interview took place before the start of the Conservative Party leadership contest began]


“Even people who would not consider themselves fans of a big state take as granted that the NHS is here to stay. So, when you get a Trump attacking it, even people who might otherwise have some sympathy for some of his sentiments just think that he’s got it completely wrong.”

Nicky Morgan is explaining why – even on the right of the Conservative Party – the continued existence of a successful NHS is not up for negotiation.

“The party knows that it needs to appeal to the centre ground of British politics. That’s where its support lies. These [Tory voters] are people [who are] not interested in arguments about bits of the NHS being delivered by other people or sold off. For them… the NHS is a central feature of their lives.”

“I think there’s [now] an acceptance and an understanding of that in my party.”

Those voters are, however, very interested in how the NHS performs – and a feature of the two-year period during which Ms Morgan was education secretary was the development of a quality regulation system in the NHS closely resembling that applied by Ofsted.

“Jeremy [Hunt] and I had a lot of conversations, and he was very explicit with me. He wanted the Care Quality Commission to be like an Ofsted, basically.

“When you [first] come into [the Cabinet] there’s often an event that is pivotal in how you’re going to approach [the job]. Mid Staffs was probably it for Jeremy. For me it was the Rotherham children’s services case.

“You just think to yourself, ‘hang on’. People who really needed the system to work for them were utterly let down. And who listened?”

Perhaps education’s most significant influence on the shaping of CQC was the counter-cultural (for both sectors) rejection of the idea that the regulator should actively seek to raise standards.

“I had tension with [then chief inspector] Michael Wilshaw about whether Ofsted was an improvement body or not, and in my view it’s not. It is there to report back and recommend. Heads will usually look at the Ofsted report and say, ‘I can see I need to work on these areas. Who am I going to ask in?’ [But] I think that’s a different role [from that of the regulator].

“It’s about remembering who your reports are for. They are, of course, for the school and its governors, [but I had to] spend time reminding people actually it’s [ultimately] for pupils, parents and families.”

With choice, the policy du jour of the last decade, failing to have much impact on the quality of health services, the Tory MP says, “how a service has been rated is really important to those who work in it [and] for people who are using it”.

The inspection system also allows politicians to have a greater influence over the quality of services.

“As a constituency member of Parliament, I know when the CQC are inspecting a bit of my NHS. [I can email them and say] ‘here are some cases we’ve dealt with’. For me to have that input on behalf of constituents is really important.”

One of the consequences of the NHS heading down the Ofsted route has been the replication of heightened tensions between the inspected and the inspectors.

“Accountability or somebody marking your homework is never a comfortable experience for anybody – MPs get it every four or five years or [recently] every two years”.

However, Ms Morgan notes, that Ofsted’s chief inspector Amanda Spielman is changing the education regulator’s tack and that when she visits local schools, teachers will “often say they’re quite surprised by how the inspectors are helpful and constructive.”

She adds: “You’ve got to guard against people being too understanding because… you’ve got to keep the standard up. But equally there are appropriate ways to say to people, ‘this is great, but this is not so great’.”

In any case, Ms Morgan says the NHS should welcome Ofsted’s robustness.

“Getting education right is very important… the more educated a population is the lower their rates of certain conditions [and] the longer they live.”

The Treasury and the NHS

“I guess it’s like a parent-child relationship. The child always saying, ‘just a bit more, just a bit more’.”

This is how the former economic and financial secretary characterises the relationship between the Treasury and NHS.

And, she claims, “I think the [Treasury’s] default [position] is going to be to say ‘yes’ [to NHS demands for revenue funding], unless there’s an extremely compelling reason to say ‘no’.”

This, she says, is an inversion of its usual approach and stems from the Treasury’s recognition of the central importance of the NHS in British politics and society.

It is also a factor of an atypical power imbalance between the two departments. As noted by the IFS’s Paul Johnson in an earlier Bedpan, the Treasury’s NHS team is much smaller in relation to the sums spent when compared to other areas of government expenditure.

This puts knowledge of the sector at a premium – but at present the flow of intelligence is towards the service, with Simon Stevens poaching both Julian Kelly and Matthew Style from the Treasury.

“If you’re the Chancellor”, says the former Treasury minister, “you want [the flow] to go the other way. You want to get good people from the NHS who understand NHS accounting and restructuring and know exactly which questions to ask.”

The poor old Treasury also faces the prospect of being ambushed on health more than in any other area of spending.

“Never underestimate the influence of number 10, because if the Downing Street incumbent says, ‘I want this funded’, then even the Chancellor has to find a way to make that work or provoke a massive row”.

This, of course, is exactly what happened last summer when Theresa May demanded Philip Hammond find £20bn for the NHS ahead of the (still to happen) public spending review.

Ms Morgan said the Treasury was sympathetic to the need to act, but asked: “Why are we accelerating this ahead of a spending review that we know is coming? Before we’ve really had a chance to run the rule over the NHS and get the chief executive and ministers to make a case for the [increased] spending.”

It is a concern that you might expect the Treasury select committee to share – given the approach rides a coach and horses through the long-established process for making sure public cash gets doled out in the right amounts to the right people. Ms Morgan’s reply once again underlines the special status of the NHS.

“I think as politicians we completely understand why a political decision was made to accelerate spend decisions on the NHS.”

That said, she admits: “There will come a moment in the scrutiny of the rest of the spending review, [when we ask] ‘is it that you can’t fund x because you’ve already given more money to the NHS’?”

Capital funding

Ms Morgan says the Treasury is on stronger ground when it comes to allocating capital funding and is therefore able to play harder ball with the NHS.

Late last month Simon Stevens used his Royal Society of Medicine lecture to press the case for increased government borrowing to support NHS capital spending – arguing that they could do so at historically low rates.

“I’m not entirely convinced that really holds up to scrutiny”, says the select committee chair, “to me borrowing is borrowing, and at the end of the day someone’s got to pay it back. If it’s not this generation, it’s going to be a future generation.

“I was there in the Treasury as we fought [to control spending] and, because of the way it’s been managed, we are able to borrow as a country in a cost-effective way. But there’s always a danger [that] it can go wrong. Suddenly the cost of borrowing is not so low. The cost goes up and you can’t service the debt, that’s when the problems really start.

“Just because borrowing is cheap now, doesn’t mean it always will be…I worry about letting the brakes off again.”

Her preference would be to find alternative sources of funding, claiming: “There is actually a significant appetite from investors of all sizes, sovereign wealth funds, pension funds etc, to invest in infrastructure in this country.”

When Bedpan comments that this claim has been made for decades – and yet only the now discredited public finance initiative has unlocked that funding – she acknowledges that “nobody knows what comes next” on private finance.

She lays the blame for this, gently, at the door of Treasury civil servants.

“I’m not sure there’s a real absolute burning desire [within the Treasury to find a solution]. I think their view would be if you want capital expenditure, let’s just find money.”

Nicky Morgan, health secretary

What would Ms Morgan prioritise if she found herself back in Cabinet and responsible for the well-being of the English people?

She says that she would want to begin a “national conversation” on “how we’re going to be looked after when we are older”.

The absence of this debate “really concerns” her, noting that as a constituency MP she gets “a lot of cases where it was all fine until mum fell down the stairs and had to go to hospital, and dad can’t be left on his own, and nobody ever thought to look for a care home in the area. How much are they, what’s the availability and all the rest of it.”

She says that any resulting solution must “work with the grain of human behaviour” and also has got to reflect the fact that people’s economic lives are changing “every 10 years, and generation by generation.

“We can’t assume, for example, everybody’s going to be a homeowner and is going to have equity nor paid their mortgage off by the time they get to their sixties or seventies.”

Recognising the fiercely controversial nature of any changes in care funding, she cites the “unsung success story” of pensions auto-enrolment – done with a proper cross-party consensus and ramped up slowly.”

Ms Morgan developed gestational diabetes while pregnant, making her realise her vulnerability to the condition and resolve to live more healthily. She says she would like to raise awareness among the public that “we are responsible for our bodies” and need to “get better” about looking after them.

This, the MP acknowledges, would require better support (and funding) from government for prevention measures.

The fact “government is really terrible” at “spending up front to save money later on” must change she says.

“The Treasury answer [to a prevention spending bid, is] ‘how do you quantify what you’re going to save and when are you going to save it?’ We absolutely have to try [and answer those questions in a persuasive way] because that clearly is the mature way to look at how we spend.”

Coming up: Bishop James Newcome, and Department of Health and Social Care permanent secretary Sir Chris Wormald.

If there is any political or influential figure you would like me to interview, please email or if you are reading this on the website leave them in the comments box.

The past five Bedpans

NHS England chief executive Simon Stevens

Gambling Commission chair Bill Moyes

Press regulator Matt Tee

Sarah Jones MP

Ben Page, pollster to PMs (part two)

You can read all 26 Bedpans here