Lord Darzi's report highlights severe strain on NHS due to rapid population growth

The government’s report by Lord Darzi into the state of the NHS has been published, and it does not make pretty reading. It depicts a health service under immense strain.

Rapid population growth driven by immigration in the last two decades has severely increased demand on the health service. Sluggish economic growth has been unable to generate the sort of tax revenues that the NHS demands, and poor spending decisions has led to successive health secretaries diverting money away from technological improvements to the health service and towards day-to-day spending, like wages.

Unfortunately, Darzi’s report was not commissioned to recommend specific reforms. Beyond a few high-level suggestions, like “tilt towards technology”, this report is a backwards-facing piece of analysis.

Despite the Prime Minister and his Health Secretary saying that the NHS must “reform or die”, and that the Britain is becoming “an NHS with a country attached”, the report refuses to countenance any changes to the underlying funding model behind the NHS.

The report is a re-statement of the received wisdom about the state of the NHS, but it offers an indication of the government’s instincts for future policy. Already, the Prime Minister has announced new regulations of food advertising, for example, likely following Darzi’s criticism of the lack of regulation of the food industry to tackle obesity. Any excuse to chip away at liberty a little further.

There are commendable passages in the report, however. It highlights the woeful productivity in the health service. It notes that the Government oversaw a “dramatic expansion” in the NHS hospital workforce, at the expense of other priorities, like capital expenditure on new technology, or the improvement of care closer to patients’ homes. More people are working in the NHS but producing lower output.

The Care Quality Commission, the regulator of health and care services, is heavily criticised for purportedly believing that there is no problem for which the solution is not more staff. Darzi criticises the health service for engaging in what he describes as “capitalism-in-reverse”, whereby the NHS gets more labour-intensive, and less efficient.

The case for reform is obvious, but which reforms in particular?

Here the paper is thin. The report overwhelmingly focuses on money – where it is spent, and how much of it – and capacity. Despite the report describing the bottlenecks all over the NHS – particularly when it comes to moving patients into and out of hospitals – it shies away from making the case for specific changes, especially deregulatory ones.

While it refers to the opportunity of new technologies like artificial intelligence for improving the NHS, how we get there is left unanswered. If the government decides to try and solve this problem, it should consider reforming EU law as one of its solutions.

Regulatory reform doesn’t just improve productivity and outcomes, it can also be delivered without large sums of taxpayer money, money which the Prime Minister says he does not have. Furthermore, it will pare back the bloated regulatory state, which has boomed within the NHS since 2008, according to Darzi’s report.

Legacy EU laws like the Clinical Trials Directive and GDPR offer great opportunities for reform. Making it easier to share patient data between different parts of the health and social care system, as well as ensuring life sciences companies have access to the vast reserves of NHS data for the development of new drugs could enable radical improvement to the health service.

The cost of new drugs continues to rise, and with budgets squeezed, it has meant that British patients in the NHS are losing out around the world when it comes to getting new medicines. Finding effective ways of cutting these costs will be a massive benefit to the British people and the British life sciences industry alike.

The previous government prepared a suite of deregulations to the Clinical Trials Directive in 2023, but these failed to be delivered following the political crises of the last year. It is imperative this government revives them. This can be done with existing powers, and will not require new laws. Similarly, a bill to reform GDPR fell away at the last election. This should be brought back and put at the heart of the government’s NHS reforms if it is remotely serious about improving productivity and outcomes for patients.

More controversially, the Prime Minister should consider overturning the 2003 European Court of Justice ruling which found that time asleep counted as working time for doctors on call and restoring the exemption for doctors from the Working Time Directive. As well as offering an important quid-pro-quo to the taxpaying public following the award of bumper pay rises to striking doctors, these reforms will also improve the training of doctors, and ensure they return to receiving the proper training time in their early years, as was the case before the EU implemented the Working Time Directive.

These three reforms will not save the health service on their own, but they will offer significant improvements. Few things will, and despite its protestations about the strength of the NHS’s founding principles, the report shows a health service in danger of collapse under its current model. Darzi said a functioning health service is central to national prosperity. That is undoubtedly true. If the government is serious about reforming the NHS, it must leave no stone unturned and pick up the rock marked “retained EU law” and see what opportunities for the restoration of national prosperity it can find beneath it.