The following piece of mine appears in The Spectator's supplement, 'Blair: A Modern Tragedy':

New Labour had its limits, even in 1997. Those limits were made flesh by the appointment of Frank Dobson as Tony Blair’s first Health Secretary. For all the changes which the NHS has seen since then, there has been an underlying Old Labour consistency to Labour’s approach to the NHS over the past decade: spend as much money as possible, fiddle with the management structures, and all will be well with the wonderful NHS.

But if that was the answer, then one has to wonder what on earth was the question. Tony Blair’s legacy, after a decade in charge of the NHS, is a false dawn on reform and waste on an unprecedented scale.

Much attention has focused recently on the chaotic £12 billion NHS IT project (projected by the Public Accounts Committee to end up costing £20 billion). But that is a pinprick compared with the overall sums thrown at the NHS’s fiscal black hole. By the end of this financial year, NHS spending will be £92 billion - a rise of over £50 billion a year since 1999. But to what end? Even the King’s Fund, one of the NHS’ stalwart defenders, has conceded that three-quarters of the increased spending disappears each year in costs rather than “activity” (the jargon for treating people).

One unglamorous branch of the NHS’s activity is typical of the failure to solve the fundamental problems. The latest survey into waiting times for hearing aids found that the average wait in England for someone needing their first had risen for the third year in a row, to between 45 and 48 weeks. There are wide variations across the country; patients in the South East wait between 73 and 74 weeks.

So much for more money being the answer.

When Labour took office, its belief in the NHS as the only moral method of healthcare delivery was exemplified by one of Mr Dobson’s first acts – ordering local health authorities not to talk to the independent sector, let alone deal with it, unless in the most dire of emergencies. His instruction was based on nothing other than a visceral loathing of the idea of non-state involvement in healthcare.

Mr Dobson’s successor, Alan Milburn, had a more grown up approach and by October 2000 had signed the ‘Concordat’, which contracted NHS work out to the independent sector. This was by far the most significant development of Mr Blair’s period in office. Even Baroness Thatcher had run scared of such an idea, fearing it would confirm fears that she wanted to privatise the NHS. But the plain fact was that the NHS’ capacity could not meet the demands of patients; why on earth would the NHS (ital)not(ital) want to utlilise the independent sector’s spare capacity?

There was, of course, more to it than that. At the launch of Labour’s 2001 manifesto, Tony Blair spoke of there being “no ideological bar” to expansion of the role of independent provision in the NHS. What this should have meant was that the NHS would become simply a purchaser of services - the logical extension of the Tories’ original purchaser-provider split, but with real, open competition for the provision of services, rather than the pretend competition between different branches of the public sector.

But it was the familiar New Labour story – much promise, little reality. Take foundation hospitals. In theory a fine idea with the power to transform the NHS, foundation hospitals would have been tax funded but free-standing, independent hospitals competing with traditional NHS hospitals on the only worthwhile basis: quality and price. After a mauling from the Treasury, they were then subjected to an even more mortal foe – Labour backbenchers wedded to the existing NHS dogma. When the first foundation hospitals arrived in April 2004, they were barely worth bothering with.

Eventually, both Mr Blair and Mr Milburn came to realise that competition was key. Last year, all patients were promised a choice for elective treatment between four providers, one of which had to be independent. The aim was that by 2008 patients should have an entirely free choice between any NHS, charitable or independent provider that met the required standard at a national tariff price. The 2008 target will certainly be missed, and there is no confidence among reformers that 2009 will be any better.

But even this mess comes only after a catastrophic error. The notion has somehow taken hold that a radical Tony Blair was, as in education and welfare, stifled by his Chancellor from making the necessary bold reforms to healthcare provision. But it was not Gordon Brown who, in January 2001, sat on Sir David Frost’s BBC1 sofa and announced that NHS spending would rise to the EU average. It was Mr Blair. In reality, the Prime Minister was the prime mover behind the idea that money was the real problem and bounced a horrified Chancellor into a spending commitment for which the word profligate does not even come close.

Between 1999/2000 and 2007/08, spending on the NHS will have almost doubled in real terms. In 1999/2000 spending was £40.2billion; in 2007/8 it will be £92.6 billion. But the result, far from curing the NHS’s ills, has been paltry. So where did the money go? In its 2005 review of the UK, the OECD found that although the NHS budget increased by half between 1999 and 2004, the number of doctors increased by only a quarter. And Department of Health statistics show that although there has been an increase in the number of operations, it is much slower than the increase in the number of doctors or spending. Productivity, in other words, has fallen. So it should come as no surprise to discover that 56 per cent of the £5.5 billion extra spending that went into the NHS in 2005 last year went on pay.

The think tank Reform has led the way in unearthing statistics which put the past ten years’ performance in perspective. As its latest survey puts it: “The current behaviour pattern of the NHS now resembles that of the British economy in the era of stagflation. An inflationary increase in costs and rise in money expenditure – go - leads to a drastic stop which threatens investment and innovation for several years. The sheer size of the increase – a three fold increase in cash funding and a twofold increase in real terms – has made it impossible to use the funding effectively and swamped the management capacity of a system which had become adapted to working on much smaller increments.”

Labour’s 1997 campaign song, Things Can Only Get Better, has an especially hollow ring with regard to the NHS. After years of madcap spending increases, the brakes will soon be applied. Having squandered the money and done little to reform the fundamentals, the next few years promise a return to the same ferocious headlines of waiting lists and rationing on which Labour capitalised so effectively in 1997. The biter, bit.