The Beveridge report in 1942, illustrated five interrelated social problems, which the British Welfare State was designed to tackle, these were Want, Disease, Ignorance, Idleness and Squalor. (Moran, M et al 2001).
This report was published in order to find a solution to Britain’s social ill’s, which had multiplied during the Great Depression of the 1930’s and the experience of the Second World War. With the publication of this report it was realised that the Laissez-Faire style of government was inadequate in providing a safety net for the disadvantaged members of British society, and that a comprehensive system of welfare was required.
Although the concept was in place, much of the system of welfare that we see today was not initiated until the Labour government came to power in 1945. They then passed key legislation such as The Family Allowance Act 1945, Housing Acts of 1946 and 1949 which brought about subsidy to tackle the housing problem.
National Insurance acts of 1946 and 1948 which provided a comprehensive benefits system for all unemployed, disabled, elderly and survivors and The National Health Service Act 1948, (Budge, I et al 1998) which, initiated by Anuerin Bevan , who was Labour’s Health Minister between 1945 and ’51, provided Britain with the worlds first nationalised health service run solely on public funding to provide free health care for all.
This National Health Service begun by the Labour government in 1948,was designed to provide free and universally available health care for all. This was done by nationalising all hospitals, surgeries and university hospitals, and placing them under fourteen new hospital boards, distributed on a regional basis (in England and Wales only, as Scotland had a separate system).
General Practitioners worked much as they had before, but their revenue was now provided by the state, not their patients. All prescriptions, dental and ophthalmic care were universally free of charge, to be paid from taxes and national insurance contributions. This, however, proved too expensive and within two years, a prescription charge was introduced, much to the dismay of Nye Bevan who resigned in protest. (Budge, I et al 1998)
This 1950 reform was the first in a long line, as successive governments struggled to cope with financing the new demand for healthcare and the costs associated with it. As the NHS, and the welfare state as a whole was founded on the Keynesian economic principle that full employment, and therefore full contribution from the population would be the norm, rising unemployment levels, and therefore a reduced budget has forced governments, particularly since the early 1970’s, to look at the way the NHS is run.(Budge, I et al 1998)
During the 1950’s and 60’s problems with the regional health board structure emerged. This was mainly because the regions varied in size by such a large margin that no way of forward planning for the distribution of funds or research and development purposes was possible. So much so that both Labour and the Conservatives agreed change was required and in 1974 a new structure was implemented with the introduction of 90 new area health authorities. These were given the task of strategic planning and were to provide more accountability and easier access to the various interest groups involved in the running of the health service.
These area health boards were phased out in 1982 after the 1979 Conservative consultation document, ”Patients First”, proscribed that “consumers” rather than “producers” should have a larger say in how the NHS was run. The gap left by the area health boards was filled by 192 new district health authorities with a greater amount of management responsibility devolved to them.
In addition to the organisational change of the 1970’s and 80’s the Conservatives decided that the principle of “market forces” would have a beneficial effect on efficiency, and in the 1991 white paper “Working for Patients” the government then decided that a better incentive system was required to modernise the service, and that the market forces relationship between the “producers” or health care professionals and the “consumers” or patients could be expanded.(Budge, I et al 1998)
In 1993 NHS trusts and General Practitioners were now urged to bid for business from the DHA’s and GP fundholders. These reforms were introduced to increase market-like transactions between providers and purchasers and also to increase central government control over the base of the service.
This change was implemented more slowly than the government would have liked, mainly because of the entrenched positions of the various employee, patient, and interest groups involved. These included powerful bodies such as the British Medical Association, whose power base was very strong and were able to exploit the division in public opinion, which existed because it was perceived as a first step to privatisation.(Budge, I et al 1998)
The opposing views on the future of the NHS and indeed the welfare state as a whole, make for interesting debate. For example, the new right position is that welfare policies, by definition, limit the populations freedom to spend their money as they wish by imposing high rates of taxation. That state provision of welfare is inefficient because it creates a monopoly, and that it creates a climate of dependency which is difficult for the individual to break. The overall position is that private provision is nearly always better, this is borne out by the Conservative reforms of the 1980’s and 90’s.
The left’s traditional thinking was to plough ever more resources into the NHS hoping that extra funds would succeed in modernising the system. New Labour, in coming to power, promised to abolish the internal market within the NHS, believing it to cost millions of pounds in administration costs, but since 1997 they have made no moves to do so, have endorsed the operating culture of the service and as yet haven’t made any wholesale reform proposals.
The political debate, which revolves around the NHS, appears to be primarily concerned with it’s funding. According to the treasury’s pre-budget report this is £60bn for the fiscal year 2001-02, with an additional £1bn for 2002-03. On top of these figures the growth in spending is also set to grow by 5.7% a year, every year. This level of spending has provoked considerable debate over not only the future of the NHS, but the Welfare state as a whole.(Pre-Budget report 2001)
There is however an independent report into NHS funding currently in progress, and there is little doubt that its findings will spark the debate on how to finance the modernisation of the service. Even as this essay is written the Prime Minister has been discussing some of the ideas that have emerged. These include the controversial “Health Tax”, which is a proposal to raise a “ring fenced” tax to be raised specifically to pay for the service.
This idea, put forward by the Health Secretary Alan Milburn, has it’s opponents already, notably his own Chancellor Gordon Brown who, along with Mr Blair, say that finances would be better raised through general taxation.(BBC News,27/02/2002) Again though, the post script is that nothing will be ruled in or out until the solution to the problem is found.
The Conservative leader Ian Duncan Smith, along with the shadow Health Secretary, is in the process of holding a series of seminars, which include open debate with health care professionals. These are designed to create a forum for an exchange of ideas with which the Conservative Party hope to modernise their policy of healthcare.
Through these discussions the Conservatives hope to pinpoint the weaknesses in current governmental policy, look abroad to other welfare models, and then form a “cohesive strategy for the 21st century and beyond. (Duncan Smith I 2002)
In conclusion, the welfare state and the NHS in particular, was set up to bridge the gap between the classes that was highlighted by the depression. The fundamental principles of the service were to provide free health care for all, to be paid for by a system of taxation and National Insurance contributions.
The service has since been the subject of much reform and debate because of the finance spent on it, the various interest groups involved in it, but mainly because it affects us all in one way or another. Illustrations of conflicting philosophy appear every time there is a change in government, however at the moment hostilities appear to be suspended until the Wanless report is published. Even after it’s publication, as the main parties are in agreement that Britain should seek to reform but also maintain the right to free health care, it only remains to be seen what changes the government will implement.