The NHS faces a 'hell of a job' after failing to deliver major advances in productivity and public health, Sir Derek Wanless has told HSJ.

The next three years will need crucial, major strides if the NHS is to make the most of record government investment, he argues.

Unveiling his stark report on how well the extra£43.2bn has been spent Sir Derek says: 'Unless we get it right in the long run the service is going to be even more expensive than it needs to be and that is a serious concern.'

It has not come as much of a surprise: 'It's what I expected from what I have read as the five years developed. It's not what we expected when we did the report in 2002.'

This view has clearly been shared by those charged with using the money he secured in the most effective way.

He says: 'Talking to people in the service there was an element of annoyance and frustration over some of the things that happened which in their view had caused many of the problems they were presently seeing.'

He is keen to get across his fairness in assessing the NHS's performance and wants to help.

There is no doubt he is in a position to do so - before the interview he mentions he is off to the Treasury that afternoon, and the Department of Health is clamouring for an early look at his mighty 321-page verdict on the biggest ever cash injection into the NHS.

However, Sir Derek has got the big issues, where the problems have occurred, firmly in his sights. Structural change, worse than expected benefits from the national IT programme and staff contracts, uncertain and slow policy implementation and inadequate public health measures have hampered progress, he warns.

'Could we have done better than we have done? Yes, I think so,' says the former NatWest Group chief executive.

Much of Sir Derek's ire over how the NHS has spent its bumper pay deal since 2002 comes to poor direction from the top, namely restructuring of trusts and slow policy changes.

And the 'worst thing' that could happen now would be for major policies such as payment by results and practice-based commissioning to be torn up, he says.

'If you think back to 2002, there had just been structural change so it didn't seem likely that there would be further massive structural change of the sort that there has been.'

This was never recommended in his original review, he says. 'When you cut something up and two to three years later you effectively turn around and say you are going to start again then something is wrong.'

But Sir Derek believes the right policies are now in place to deliver improvements - although there is
a wide gap in the skills of managers to use them most effectively.

'The levers are there now,' he says 'If people use them well then it is possible to be relatively optimistic but it is a hell of a job. This is not simple - this is a huge undertaking.'

He continues: 'People who are intrinsically good at using resources well find the levers very helpful so
it might have widened the gap between the effectiveness of different managers.'

This is a result of policy changes being put in place without being properly evaluated, he says, meaning 'you are asking people to do things they are not trained to do'.

He argues that the changes to GP out-of-hours services in 2004 have led to huge increases in attendance at accident and emergency departments, creating a recipe for poor productivity.

Sir Derek says: 'People need to really think hard about the whole system and what the cost of the system is and how the different bits fit together.'


And he is unconvinced that reconfiguring A&E departments is as economically sound as some managers claim.

'We felt there wasn't evidence that it is saving money,' he says.

'We are concerned some of the things that are said to be sensible might economically turn out to be
of poor value.'

The new staff contracts also 'don't seem to have delivered any step change in productivity'.

Staffing has always been underestimated in the NHS, he argues, and the failure to deliver the best productivity possible will mean even more will have to be recruited in the future despite the DoH exceeding targets it set out
in the NHS plan.

Yet for Sir Derek the 'biggest failure' of the past five years is not in how efficiently the health service has dealt with the sick but in the war on the causes of poor health, and in particular against obesity.

He says: 'There was a lot of focus given to it initially but there are too many pilots, too many small initiatives.'

In 2004 Sir Derek published a framework for improving public health, but this was not followed up in full by the DoH.

Reflecting on his frustration in trying to find comprehensive data to produce the report, Sir Derek says: 'Commissioners haven't got a good information base to justify how much money they get for public health.'

Yet there is clearly optimism in his careful assessment of progress to date. Improvements have been made in areas including cancer and stroke, access and waiting times.

And he is particularly keen to praise the use of audits to 'expose inefficiencies'.

However, the message is clear - there is no time to lose if the NHS is to hit the European average for health spending and make the most of its settlement, both past and future.

This will need regular, long-term forecasts by the DoH, he says, as well as better measures of productivity.

A lower settlement could, paradoxically, have a positive effect by forcing managers to look at productivity, he says.

But, Sir Derek warns: 'The danger is if we can't improve productivity then all that will happen is the service will fall further and further behind.'