Stephen Dorrell, MP for Charnwood, chairs the influential health select committee of the House Of Commons. He was previously Health Secretary at the tail end of the Major government 1995-7.

He spoke to Health Policy Insight editor Andy Cowper about the Health Bill, commissioning and the politics of reform.

Health Policy Insight: The Bill proposals invest heroic faith in commissioning, which your committee report noted has been attempted for two decades. What convincing evidence have you seen that it will work this time?

Stephen Dorrell: I’d phrase that slightly differently, to consider what we really mean by commissioning. For the Government and the policy community, commissioning means looking at how the NHS money is spent to secure good clinical outcomes and high-quality services, making efficient use of resources.

Commissioning really asks ‘what does the taxpayer get in return for the NHS budget?’ Which is an important question for us to ask, so we can look the taxpayer in the fHPI. It’s the question of how we spend £100 billion a year.

HPI: What’s your view on why commissioning will work this time, when previous attempts haven’t?

SD: That’s the right question to ask, but I agree with your premise: commissioning in the NHS context of the past two decades has felt like a nice idea that we should try some time!

Why has it not worked previously? For a number of reasons.

The single biggest has been the lack of clinical engagement in the process - engagement by the whole clinical community. When commissioning has been something done to clinicians by managers, it’s unlikely to be very effective.

Properly understood, commissioning should be the principal mechanism for clinical professions to challenge their own members to keep their practice up-to-date and address variation

HPI: The political logic of capping consortia management spend and indeed staffing is evident. Is the practical logic evident?

SD: It’s evident that the Government want to make clear efficiency in the commissioning process an important priority, and capping the numbers is in a crude way a proxy for that.

I think we need to be mindful of evidence that Larry Cassalino found, drawing from US practice on physician-led commissioning – that a factor in relatively disappointing results had been insufficient resource. I’m in favour of the resource to drive commissioning as an efficient process, but I’m not in favour of denying sufficient resource to do the job.

HPI: Do you think the financial envelopes for commissioning promises to be sufficient?

SD: It’ll depends how it’s used. If each consortium reinvents the wheel, no, but clearly what Sir David Nicholson has said outlines the intention to prevent wheel reinvention on that scale.

Which posies the question what the future role will be of the NHS Commissioning Board and PCTs clusters, and of the extent to which GP commissioning consortia are each independent or will in truth cluster within the clustered PCT infrastructure.

HPI: Does that sound much like liberating the NHS?

SD: This local-versus-national tension is as old as the NHS. It’s inherent in a national service when healthcare is a personal and local service.

So this is the latest chapter in long line of processes attempting to reconcile two ultimately irreconcilable forces, which nonetheless need to be balanced.

HPI: Health Secretary Andrew Lansley outlined plans at Nuffield Trust summit for tariff to become more granular – i.e. complex. How will this work in context of cutting NHS management spending by 45% by 2014-15?

SD: We need to go through the levels of that argument – is this a national tariff or an individual contract? Practically, in the NHS this needs to be national. If we decide we’re in favour of national tariffs, we must recognise that the cruder they are, the bigger the scope for perverse incentives so some greater flexibility is necessary.

Once again, we then get into the trade-off between not wanting absolute complexity and not wanting to neglect individual patient cases.

So the tariff probably needs to move away from being crude, but within a system sufficiently flexible to avoid obvious perverse incentives – but you can never avoid them all.

HPI: The NHS Commissioning Board’s powers became more explicit from the White Paper to the Bill, especially around authorisation. Is it simply becoming the new DH?

SD: You need to ask ‘to whom commissioners accountable – only locally or to the national structure’? Another old principle: if you want to see where accountability is, follow the money!

HPI: How optimistic are you about the likelihood of the NHS achieving ‘The Nicholson Challenge’ of making £4 billion of economies a year over four successive financial years?

SD: I’ve said many times and remain quite unapologetic, that this is going to be and is already the biggest practical influence by far on ground-level decision-making in the NHS.

I think it is deliverable, but we should be under no illusions on the scale and urgency of delivering it.

My biggest concern is that the Bill distracts management attention from delivering The Nicholson Challenge, which is the key challenge facing the health service.

HPI: Clearly, the Bill’s abolition of PCTs and SHAs represents a non-reversible change to NHS management.

SD: Indeed, and what would we mean to reverse it? Is there a ‘save the PCT’ movement? I think few would sign up, other than PCTs staff.

So to deliver The Nicholson Challenge, flexing the management structure to be more fit for purpose is indeed the obvious thing to do. The question now is how move forward from the end of the committee stage of the Bill to reach the optimum management structure to achieve The Nicholson Challenge.

HPI: Do you think ‘The Bosanquet Scenario’ is more likely, of the NHS running out of money on 1 November this year?

SD: No, I don’t think the NHS will run out of money. It still has unprecedentedly high level of resource.

But there is a real challenge of meeting rising demand from a budget that’s growing in very modest, and in effect will be flat real over four successive financial years.

That’s unprecedented. And facing that, it’s not a bad idea to really focus on how to meet it.

HPI: The Bill has required 100 amendments by the Government proposing it, including clarifying that price competition is disqualified. What does that suggest to you?

SD: Normality. I’ve been involved as a Whip arguing against amendments (however desirable) to contain the legislative process; and on the other side as a minister arguing to get amendments through.

The vast majority of amendments to bills are tabled by the government proposing them.

HPI: Monitor chair David Bennett recently told The Times that lessons for the NHS can be learned from utility privatisation. Is he right? If so, what?

SD: I’m not saying there will be no lessons: that would be silly.

But I think the health service is in just a fundamentally different place from the privatised utilities, for the very obvious reason that in almost all cases, those utilities’ products and services are really directly paid for solely by individual consumer payment.

So the relationship between a utility and its customer is fundamentally different to the relationship between the NHS and its patients.

HPI: The Coalition Agreement specifically promised no top-down reorganisation of the NHS. Can you understand why that changed by the White Paper?

SD: I can understand it in a process sense – how the intellectual process worked.

I don’t really understand the political judgment, because one of the points repeatedly made pre-election was no more top-down reorganisations (or in health economist Professor Alan Maynard's words, "redisorganisation").

More conceptually, I’m not really in favour of politicians’ attempts to achieve system-wide change. Given the size of the NHS, much of this is pretty well a re-invention. It’s much better to solve problems that arise than it is to reinvent wheels. Even if the structure had been a problem, it was not a priority.

HPI: What practical and political issues arise with the recent Lb Dem change of policy which challenges key aspects of the Bill and the BMA’s calling for Bill to be withdrawn?

SD: The Lib Dem leadership have made it clear that they're committed to the Coalition, and Nick Clegg has said that he and his colleagues will listen to Lib Dem activists' points of view.

The arguments at the Lib Dem conference have been mad by others, including the select committee. So these are not new arguments, though obviously the Lib Dem party is a member of the Coalition.

So this is being made out as a strong new political fact even if it's not a new argument, and the Government needs to be seen to be winning the argument that these changes are really an evolution of policy; not a revolution. If this requires some amendments to the Bill to reinforce the sense that this is a consistent direction of travel, then the Government need to think about that.

HPI: How is the party politics going to play out, with most of the pain of closures coming over the next three financial years, shortly followed by an election?

SD: Having been John Major’s health secretary 1995-7, I’m reasonably familiar with these dilemmas. The NHS is a living organisation, which means that you can’t put changes on hold with having an election due in two years. We have to find ways of managing necessary change, even in a pre-election environment.

Clearly, it’s easier to do major changes in delivery if there’s not an election due in the next three months.

HPI: You talked of need for more ‘sunlight’ in the Conservative Party’s public sector reform vision pre-election. Where is the sunlight coming from now?

SD: What opportunity for clouds parting! I’m not sure, and it may seem premature, but surely the opportunity is in engaging the clinical professions via commissioning.

At the end of day, this is not a new policy analysis. Effectively, commissioning and a purchaser-provider split has been pursued by every health secretary since Kenneth Clarke in 1990 (except Frank Dobson).

You asked me earlier why it’s taken so long to really get commissioning started, and the greatest weakness has been the sense it’s not really engaged clinicians.

The design now aims to engage the clinical community. If we can build on that, the opportunity is there to use these structures, to improve and achieve greater satisfaction, improved outcomes and better patient service.

HPI: What was the key lesson you learned from your time as Health Secretary?

SD: (clearly joking) It’s so long ago, I’ve forgotten!

HPI: If Andrew Lansley were not to continue, would you want to do the job again?

SD: Chairing the health select committee means that I have a job for this Parliament, but I also have other commitments which mean that I'm not basically available. And I enjoy doing what I'm doing now!

My objective is to try to secure the success of the current Secretary Of State.