Editorial - Return of "Mr PFI" and the Prince of Darkness
Packing the cabinet
TONY BLAIR’s once-postponed reshuffle of ministers has further strengthened the hand of the Cabinet’s privatisers and "modernisers".
While much of the limelight has been hogged by the return of Peter Mandleson – who will step into the shoes of the floundering Mo Mowlem and try to press-gang the political leaders of northern Ireland into an agreement – we should not lose track of the changes in the Department of Health.
Frank Dobson has been dragged kicking and screaming from the job he had always coveted as Health Secretary, and forced to smile and insist he is not Uncle Albert from Only Fools and Horses, and that he really wants to be mayor of London. And his place has been swiftly taken by the upwardly-mobile former Treasury Secretary Alan Milburn .
In opposition Milburn was until about six months before the election a sharp and capable critic of Tory policies on the NHS. He knew how to ask the right questions to smoke out the real crisis building in the NHS and the bureaucratic waste of the market system.
But then, in concert with other New Labour leaders, he switched from attacking to supporting some of the main lines of Tory policy. The most conspicuous policy-switch was on the "Private Finance Initiative" (PFI), dreamed up by Kenneth Clarke in 1993 as a means to "privatise the provision of capital for the public sector".
From steadfastly opposing and exposing the costs of the Tory scheme, New Labour turned full circle to pledge in its Manifesto that it would "make PFI work".
Major concessions to placate the private banks, developers and building firms in PFI consortia were among the first legislative changes pushed through with Blair’s massive majority: and the driving force arguing for PFI was Dobson’s number two – health minister Alan Milburn.
Brushing aside warnings from all sides, Milburn rubber-stamped many of the first wave of PFI schemes in the NHS. 19 PFI-funded hospitals valued at £1.5 billion are now under construction.
These projects will privatise more hospital support services, and funnel millions in profits into the coffers of private consortia out of the scarce revenues of NHS Trusts over the next 60 years.
Although Dobson – at first an "old Labour" critic of PFI – was eventually won over to this "third way" (and now finds it a millstone around his neck in the mayoral race, in the form of tube privatisation) he has never shown the same passion for it as his minister.
But Milburn also played a key role in formulating Labour’s wider health reforms. These set out boldly to replace the wasteful chaos of the Tory "internal market" and the inequality of GP Fundholding with a new system.
However Labour’s plan preserves the "purchaser/provider split", tightens cash limits, and gives GPs – who have always refused to be salaried employees of the NHS – ever-growing power over the future shape of health services through the establishment of "Primary Care Groups" (PCGs).
Having proved his ruthless determination to hold down NHS spending, Milburn was promoted – to Chief Secretary of the Treasury, where he could help Gordon Brown hold down spending across the whole public sector.
It was from this elevated position that Milburn helped fix the NHS share of public spending for the next three years at a level which means New Labour will increase health spending over the five years 1997-01 at a lower average level than the Tories did.
Now a growing number of PCGs are facing their first cash deficits. Health authorities and Trusts, too, face the prospect of cutbacks to balance the books (23 London Trusts alone face combined deficits of over £60m).
And Milburn is riding back in to take charge, insisting that the pace of "modernisation" must be increased.
However beneath the slick, smooth talk of a New Labour zealot, Alan Milburn has shown himself to be less than confident to argue his case in a wider audience.
He famously refused as health minister to defend the government’s policy of phasing the nurses’ pay award on breakfast TV when he discovered he would have to be seen by millions arguing against a nurse in uniform!
Exhausted, under-paid and short-handed, front-line NHS staff will be less than impressed by the arrogant way in which "Mr PFI" has so far viewed their plight.
Perhaps health workers will console themselves that at least they have not been allocated Peter Mandleson, whose noted spin doctoring skills are not much use on the wards.
His surprisingly warm welcome from the notoriously homophobic Unionist establishment appears to be chiefly a function of Mandleson not being Mo Mowlem, and the fact that he obviously carries authority from Tony Blair.
The scope for "spinning" the impasse over the Good Friday agreement, however, seems to have been largely exhausted by a succession of fudges by Blair and Mandleson’s ill-starred predecessor.
Mo Mowlem’s waning fortunes could be charted by the disappearance of her standing ovation from the faithful at Labour conference.
Even if no progress can be made, Blair can argue that he has put his "best man on the job" of placating the parties to the Good Friday agreement, and just hope that something will turn up, or somebody will sell out.
But Mandleson’s rapid rehabilitation is a major statement of intent in terms of the whole cabinet.
The dwindling remnants of "old" Labour have now almost all been shunted into the sidings of government or dumped altogether, and the decks have been cleared for the dominance of eager advocates of "public private partnership", "modernisation" and the so-called "Third Way".
Some of these – like the new Defence Secretary Geoff Hoon, have risen without trace, having shown little more than their total subservience to Blair.
At a time when the Paddington disaster has helped focus public opposition to privatisation in public services, this reshuffle could prove a belated step on the road to the end of the bizarre love-affair between Blair and the British electorate.