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Why did Bevan favour “centralised financial responsibility and de-centralised administration at the periphery.” for the NHS in 1948?

Filed Under (Labour Party, Nye Bevan, Reform of the NHS) by Paul on 24-04-2012

For readers interested only in the NHS I’m afraid this is going to be a bit of history lesson of the world of left-wing politics in the mid 20th century. For younger readers interested in politics it will be a small lesson from history that may explain some of the ways in which politics work today.

These observations have been provoked by the political campaign against the Government seeking to ‘save the NHS’. For the last week, I have been exploring the different things that people want to save when they ‘save the NHS’. For me it’s a system of payment to ensure that no one in the country has to worry about their personal finances when they need the health service. For others it is a style of state organisation of those services.

Yesterday I quoted the founder of the NHS who, in 1950, said that

“…the NHS is a novel experiment.  It is an attempt on the part of British society to reconcile two normally conflicting interests, centralised financial responsibility and de-centralised administration at the periphery.” 

What I promised to do today was to try and explain why the founder of the NHS had created an institution with the tension of centralised financial responsibility” but also “with decentralised administration at the periphery”.

It is this decentralisation of administration that needs explaining and for me this has as a main wellspring the experience of how his left wing politics was formed.

People who have engaged in the politics of the NHS over the last 30 years or so have believed that if you are seriously left-wing you must support a powerful state running everything from the centre. Within the Labour Party the politics of the NHS follows the simple assumption that the left fights to retain a strong centralised state presence while the right wants autonomous public institutions that remain public but are not owned the state.

There is a sort of unthinking unchallengeable test for left wingery which links real left wing politics to strong central state power. Indeed there is a very strong political tradition within the left – in Britain and other countries – which believes that politics and social progress can only be achieved by a strong state delivering everything.

But there are other left wing traditions.

Bevan undoubtedly believed in a strong state. To fund the NHS it was vital that the central state did the heavy lifting by raising the money through national insurance and taxation.

The Treasury reaches into people’s pockets and through taxation takes the money to fund the health service. This was a popular decision in 1948 and remains a popular decision in 2012. National taxation is raw state power which involves no decentralisation of power at all.

So why then did Bevan develop this tension with decentralised administration?

One of the main political conflicts that Nye Bevan grew up with, and would have cut his teeth on, was the battle between the Labour left and the Communists. In South Wales, in Scotland and in many industrial areas of England this was the debate that his generation worked on. Day after day.

The crucial questions were – what is your attitude to the Soviet Union, and how would the working class in Wales gain political power? Did there need to be a revolution or would there be a Parliamentary Road to Socialism?

Sorry if this seems esoteric but my point is that day after day Bevan argued with people who really believed in a strong state, and they defended what that strong state did to people in the 1930s because Communists saw it as essential to the survival of socialism.

In those discussions he would have differentiated himself from the comrades.

In these rows the Communists would have called him ‘right wing’, but history says that Bevan was not. He was on the left of the Labour Party and through that Party became a Cabinet Minister in a democratically elected Government.

He was part of a very powerful left-wing tradition in the UK which saw power not only coming from the state but being wielded by the people themselves. This tradition within the British left has always been in favour of co-ops and of organisations run by the people themselves – not by the state. He remained left-wing because he believed in a view of political power which involved people in actually wielding it rather than the state wielding it on their behalf.

So my point is that there was and has been a tradition on the left of politics which does not see the political answer to everything as being services owned and run by a central state. It is only the historical politics of the last couple of decades that links being in favour of a strong central state with being the only route to left wingery.

I think it’s worth quoting Michael Foot’s biography of Aneurin Bevan (Vol2 1945-1950). On page 6 he says,

“On the issue of how socialists should use and distribute state power once gained he dismissed the orthodox Communists as arid or illiterate. ‘ The purpose of getting power he often repeated is to be able to give it away’”

This is a different politics from some others on the left – and not just the far left.

The problem is that the strong state in its most extreme form – in Eastern Europe – but also in less extreme forms in social democratic countries undermined the importance of the people running organisations themselves. The state will do this for you because you’re probably not up to doing it for yourself.

I think that’s a problem with the NHS. It does too many things for people rather than encouraging people to do things for themselves.

Others disagree. They believe that it is the job of the state – when it runs socialised medicine – to do things for people and not to expect them to be capable of any degree of self-organisation.

That’s why political debates on the left are actually also about the sort of NHS we wanted to, and still want to, create.


3 Responses to “Why did Bevan favour “centralised financial responsibility and de-centralised administration at the periphery.” for the NHS in 1948?”

  1. I think you have constructed a false argument, Paul. No NHS supporters would object to autonomously managed hospitals so long as they were part of an NHS system serving the interests of local patients and cooperating with other NHS and Local Authority bodies.

    What is being objected to is the concept of the NHS as an insurance system with services being provided by competing private, third sector and state providers.

    This objected to because a) it will lead to significantly more variation in outcome than we have currently b) it will be less efficient c) it will lead to an erosion of pay and conditions for staff d) there is a moral distaste to profit in healthcare.

    I suspect Bevan would share these objections.

  2. Mark

    I don’t think it is a straw man that I am attacking.

    I take your point that Bevan would not have liked the private sector providing care for NHS patients and this was why he tried unsuccessfully to create a salaried workforce of GPs to ensure that they were employers of the NHS and not small businesses. Although given his day to day work in the 1920s and 30s with miners in South Wales he had a strong relationship with third sector organisations that were run by the labour movement, I would suspect they would have got a look in for NHS provision.

    The main point that I am making is about whether he would have felt that NHS hospitals had to be owned by the central state or whether they could be autonomous public sector institutions such as Foundation trusts. You will remember that in the argument about Foundation Trusts 2002/3 before the legislation that was passed creating them, a number of organisations under the banner of Save the NHS, said that the creation of FTs would mean the end of the NHS. In fact what they meant in that campaign was that it would be the end of the central state control of NHS hospitals and they saw that as the end of the NHS.
    The point of this set of posts is to raise critical questions about what people want to save when they save the NHS. And the point that I draw from the Bevan quote is that the distributed administration rather than central control of NHS Foundation Trusts is probably not one of the sticking points that he would have felt was central to the NHS he wanted to save. As you suggest he would have been OK about “autonomously managed public hospitals” but it is the case that many on the left in 2002 were not.

  3. A very interesting post. I guess the NHS means different things to different people. From what little I know, I think Bevan was impressed with miners in Wales who would join together to pay a bit each week into a health insurance pot. Then, if they got sick, they could be seen by the doctor. Of course, making a local scheme national was going to change it: no more control by the people who paid in, etc.

    So, while I’d be seen as on the left, I think there are inherent problems with the NHS. But, FTs don’t fix this. Who really feels they have some control or ‘stake’ in their local FT?

    The problem with the Bill/Act is that an unspoken principle is being breached. Companies will, more than ever before, be able to benefit from the money we pay in. That is what a lot of people don’t like. The Act hasn’t destroyed the NHS, but it’s removed some of the principles that underpinned it – making it easier to reform/scrap in future.

    From what I can see, the ‘New NHS’ will be just as centralised as before, but with some of that power being in the hands of private providers. Progress?

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