'Local government may not be brilliant at commissioning but they are better than the NHS. They have been at it longer, they have already embraced provider plurality, commissioning, market management, best value, overview and scrutiny and public engagement'

If we just assume the NHS is not 'fit for purpose', what needs to be done? The policy agenda today implies a change as great as the change which first brought our NHS into being. To make this happen requires real change in the way services are commissioned and delivered on a similar scale.

We must solve three major problems. Commissioning is not working; providers are not efficient enough; and public health is starved of funding.

Within a system with supply exceeding demand and a limited funding stream, commissioning has replaced the old control mechanisms of access restrictions and waiting. But commissioning as so far practised has been ineffective, and the planning and financial management which depend on commissioning outcomes have also been poor. It is not being driven by the public health agenda and is not attacking inequality fast enough. The early signs from the latest reorganisation are not convincing.

On the supply side there is acknowledged to be significant scope for efficiency gains, mainly through productivity improvements from better process design. There is major scope to embed best practice more widely to decrease the level of unacceptable variations in quality and cost. But the old top-down approach will not work in such a complex adaptive system, and every service-related change which is imposed is viewed sceptically as yet another cost-saving measure by a management who have forgotten the patients.

Public health is talked about a lot in the context of tackling the wholly unacceptable health inequalities which persist, yet it is often the first cut in any crisis. So what might be the solution to the problems?

The need for independence
First, providers of services to the NHS (including 'primary care') should be independent, autonomous and operate within the same regulatory regime (perhaps of Monitor plus the Healthcare Commission). Badly managed trusts should lose their licence to supply the NHS. Plurality and independence are actually well established in theory, but the practice is very different. Providers must be free to act within the quasi market, whether they are NHS foundation trusts, social enterprise organisations or private sector.

Second, commissioning of health should be undertaken by local government so that all care is commissioned in an integrated, locally determined framework; operating within a national set of requirements and policies.

Third, public health should be the responsibility of local government, financed separately through a weighted capitation formula heavily slanted to favour areas of greater healthcare need. The funds should be ringfenced but authorities could top them up out of local revenues.

One consequence of the change would be to enable several billion pounds of NHS bureaucratic spending to be moved into delivering actual services (primary care trusts and strategic health authorities and much of the DoH are not required, for a start). It would be a realistic way to ensure integration of care, much better than the alternative ideas around partnership.

Time to think again
The policy background is not changed and would still embrace the key elements of choice, plurality of supply, tariff and payment by results. Freeing providers and actually allowing the quasi market to operate would be the best way to bring efficiency gains, both internal to providers but also at the level of allocation through consolidation, integration and takeovers. The spectre of hospitals closing and staff being redundant is actually replaced by the logic that badly managed trusts are taken over by well managed trusts.

The role of local government goes right back to the start of the NHS, and it is time to think again. Local government may not be brilliant at commissioning but they are better than the NHS. They have been at it longer, they have already embraced provider plurality, commissioning, market management, best value, overview and scrutiny and public engagement - why do it all over again, and again?

And why is the NHS still outside democratic control? Why pay lip service to involvement through overview and scrutiny, or joint strategies for commissioning? Why not just treat healthcare in the same way we treat social care?

We need radical change which breaks the model and changes the culture. This may be the only way for a stable future for an NHS free at the point of need and funded out of general taxation. It is at least worth serious thought.

Richard Bourne is chair of Essex Rivers Healthcare trust