It is a pleasure to be here to celebrate a decade of achievement on the part of NHS foundation trusts. I feel a bit like any parent does – proud of my offspring, of course, for who they are but also for what they do. Because becoming an NHS foundation trust was never intended to be an end in itself. It was a means to an end. To change healthcare in our country for good.

Today I want to assess how far we have got to on that journey in the last decade and where we should be heading in the next. I will argue that what feels like an insurmountable challenge – making our healthcare system sustainable – is an enormous opportunity. And I will set out an agenda for change in which NHS foundation trusts can play a leading role in turning challenges into opportunities.

In assessing where you have got to it is worth recalling where you came from. In no small part the foundation idea came from the NHS, especially the then three star trusts. As health secretary I had got sick to death of hearing from the best performing NHS organisations how resources were being diverted to bail out the bad organisations rather than being used to reward the good ones. So I decided to do a simple thing: to ask high performing NHS trusts what they wanted. Their reply was simple: they wanted more freedom to get on with the job of improving services for patients.

That request matched by own recognition - borne from experience - that the NHS simply could not be run from the top down. Sitting in the health secretary’s hot seat was often uncomfortable because the public, the press and Parliament all held me responsible for everything that happened in the NHS. One of my key learning points was when I was dragged to Parliament to explain why a mortuary in a hospital in Bedford had failed. Of course since I had the power to intervene I had to promise intervention. If you’ve got power it’s hard not to use it. The consequence, however, was to reinforce the notion that when it came to the performance of local health services the buck stopped in Whitehall rather than where it belonged - in Bedford, or Bradford or Bournemouth. The conclusion I came to was that if accountability was ever to be lodged in the right place then power had to be moved out of the hands of Ministers. If bedpans that dropped in Tradegar were ever to be heard there, the ties that bound Whitehall to local health services had to be severed. The inspiration for this thought was none other than the founder of the NHS. Nye Bevan argued that the ultimate purpose of Labour being in power was to give it away. He might not have always practiced what he preached but I was determined to bring about an irreversible shift in the balance of power in the NHS.

The idea was simple: to put those in charge of delivering local healthcare in charge of controlling local healthcare so that local services could be improved for the benefit of local communities. That could only be done by addressing the democratic deficit that lay at the heart of the NHS – the fact that while services were delivered locally, in practice they were controlled nationally. Contrary to those who argued, many of them on my side of politics, that foundations would mean the privatisation of the NHS I always saw them as a means to strengthen public ownership since they would be owned and controlled by the public locally.

A decade on, and notwithstanding the appalling failures at Mid-Staffs and amongst some other foundations, service innovation and improvement have become watchwords for foundation trusts across the country. They have used their freedoms to create new services, commercial ventures and entities like Academic Health Science Centres. Together, foundation brusts generate £30 billion annually through employment, partnerships and procurement. Their direct economic contribution to our country is higher than that of all of England’s universities or the whole of the pharmaceutical industry.

And when it comes to scale, NHS foundation trusts can rightly be proud of having have recruited a total membership of 1.5 million people - bigger than all three main political parties put together. Although foundations have not as yet pro-actively turned public participation into improvements in public health, their engagement with local communities provides a sure platform for the future.

I say that because in this next period there will have to be far-reaching changes to the relationship between the citizen and the service if the NHS is to be sustainable. A decade ago the most pressing health problem was to rescue the NHS and in particular to cut what were then appallingly long waits that patients had for treatment. A decade on and that old bugbear of the NHS, long waiting times, has more or less been beaten through a mix of extra resources and top-down reforms. The issues facing the NHS today are different and altogether more complex. The NHS not only needs to cope with the pressures of an ageing society and advancing technology. It now has to focus on how to improve health, for example by beating obesity and tackling alcohol abuse. It now has to work out how to help the growing numbers of patients with a chronic condition to manage their diabetes or their arthritis. It now has to find ways not just of providing collective care but of shifting individual behaviour. And it has to achieve all of this without the benefit of generous resourcing. The problem today is different and so must be the solution. I believe it lies in patients being treated less as passive recipients of care in a system that denies them both power and responsibility and instead being more in charge and more responsible for their own health.

That entails big changes in NHS culture. NHS foundation trusts are uniquely well-placed to lead it. You lead on service innovation. You lead on community involvement. Your leadership is needed more today than it has ever been. In my view, NHS foundation trusts are more relevant now than they were a decade ago.

I say that because we have reached a real inflexion point. In the last year the NHS has taken a real battering. First there was the car-crash of the Coalition’s health reforms, an extensive and expensive upheaval that foolishly focused on changing structures not improving services. Next the impact of squeezing £20 billion of savings out of a system under escalating demand pressure. Then the hammer-blow of the Mid-Staffs hospital scandal and the spotlight politicians and regulators have subsequently shone on failings in quality elsewhere. Meanwhile, as both the Kings Fund and Nuffield Trust have recently highlighted, cost pressures are building and waiting lists are growing. A&Es are stumbling and social services are creaking.

In two decades in health policy I have never known a time of such profound uncertainty. The NHS supertanker is drifting with little clarity about its direction in the present and even less certainty where it could be heading in future. It is being pulled this way and that. All the political parties argue for more nurses on hospital wards but none are prepared to write the cheques to pay for them. They all want to prevent lapses in care but the army of regulators being unleashed on the NHS forces care providers to look upwards to those who regulate them instead of facing outwards to the citizens who use them. The balance has swung too far towards top-down regulation as the primary instrument for improving standards. It needs to swing back to reforms that empower patients, engage staff and embrace competition. The policy agenda needs to change.

Something else needs to change too: the way we think and talk about the NHS. Browse any health policy document, listen to any political speech, read any expert commentary and you will find it suffused with the language of challenge. The challenge the NHS faces of coping with an ageing population. The challenge of a rising burden of chronic disease. Of soaring public expectations. Of constrained resources. The more the debate about healthcare is couched in terms of insurmountable challenges the more unsustainable the NHS feels and the more disempowered NHS staff become.

Of course there is another way of looking at things and talking about them. Less the language of challenge. And more about opportunity. That may sound odd, given the context. But healthcare does have a big opportunity. Five big factors are producing a platform for change. Each provides a challenge but also an opportunity.

First, demography. We live in an ageing society. There will be more very old people living with more health problems - co-morbidities - than ever before. That will require significant investment in elderly care. It will require more seamless care from a system that currently is more fragmented than it is cohesive. The challenge is that the new generation of the old will not tolerate a system of care that tells us what to do. We will want to tell it what to do. The opportunity is to refashion care so that it is aligned with the mind-set of this century rather than the last.

Second, malady. If the health care battle of the last century was to beat infectious disease the battle for this century is about tackling chronic disease. What differentiates diabetes or arthritis from other forms of illness is that they become a permanent fixture of people’s lives. It is with them 24/7. So what patients do to manage their own condition – their lifestyle, and diet and exercise - is as important as what clinicians do. The challenge is to find ways of empowering patients to take greater responsibility for their own health. The opportunity is to bring patients inside the decision-making tent – so they share the day-to-day dilemmas clinicians and managers face - rather than keeping them outside.

Third, changes brought by technology also make possible the advent of more citizen-controlled services. In the long term, if the benefits of pharmocogenetics can be realised, the next few decades could see our whole model of health care, that has been about detecting and then treating illness, becoming one that instead predicts and prevents ill-health. In the short term more chronic disease will drive the focus away from episodic treatment – largely in hospitals – towards earlier preventative action and continuity in treatment – often in the community then, as telecare and telemedicine technology evolves, into the home. The challenge is to address the mismatch between the services that are provided – with an over-concentration on hospital-based care – and those that are needed – for more care in the community and at home. The opportunity is to harness technology – from big data to patient-owned health records to mobile health applications – to help make that transition.

Fourth, expectancy. We live in a world where people are more informed and inquiring. They are demanding a greater say. Ordinary people are getting a taste for greater power and control in their lives. The challenge is to find new ways of treating each patient as an individual rather than as just another number. The opportunity is to harness the modern citizen’s appetite for knowledge and control in order to make a reality of self-care.

Fifth, and most potently of all, money. In the last three decades across the OECD health budgets have been growing faster than the economy has grown. We have been spending more than we have been earning. The global financial crisis and a squeeze on government spending have brought those good times to an end. The next decade will see, at best, a far lower rate of spending growth than we have seen in the last decade. The problem is that resources might slow but pressures won’t. So the accent will be on finding new ways of getting more out of health care for what is put in. That is a challenge. But it is also an opportunity.

Faced with a rising tide of demand for care, doing more with less may look like mission impossible. But healthcare is surely unique among modern industries in that improvements in quality have not been matched by reductions in cost. Think of the price and quality of cars, computers and cellphones. Doing more with less and doing it better, faster and cheaper has become the new normal. It is time for healthcare to catch up.

None of these challenges are unique to any one country. They affect every health care system in every country. Their combined effect is to break the old assumption that improvements in performance could only be created by large increases in investment. That is no longer sustainable. A new holy grail in global health policy is emerging – how to get better outcomes for lower costs.

Some are already stepping up to the plate. Across the country the absence of a national lead is producing a flowering of local innovation. But that will only get the NHS so far. What is needed is a plan to harness the benefits we are going to see in the next decade from new science and new approaches. The world is on the verge of a huge leap forward in how healthcare is delivered. Nano-technology and cloud computing will change what healthcare is able to do and how it does it. Mobile phones will routinely be used to monitor the health of patients with chronic disease. People will have virtual consultations with their doctors and nurses. This is not a fantasy future. It is happening in parts of the NHS today but it needs to become universal.

The wonderful thing is that many of these changes have the potential to improve outcomes while containing costs. In 2001, it cost hundreds of millions of dollars to read an entire human genome. Today, it is being done for approaching $1,000. Before long inexpensive gene sequencing will let doctors routinely diagnose and treat patients based on information about their individual genomes. Vaccines for a wide range of chronic illnesses, including diabetes, obesity and cardiovascular disease, are already in clinical development. The big question those in charge of the NHS should be focused on is how to capture those benefits. In my view that will require some far-reaching reforms – organisational reform, payment reform, service reform, structural reform, supplier reform and, critically, reforms to who holds power in the system.

Let’s start with organisational reform. The controversy that surrounded the creation of foundation trusts has given way to a consensus that the modern NHS has to be accountable locally - where services are delivered - not just nationally, from where they are funded. Of course the government should continue to be a key player in health: setting strategic direction, creating capacity for improvement and raising and distributing resources. But the thrust of reforms – across three decades and shared by governments of all political persuasions – has been for Whitehall to run less not more.

In truth, however, today the NHS sits in an uncomfortable no-man’s land. The current Secretary of State feels the need to intervene with local services even though his own government’s legislation – just like the 2003 Act - aimed to prevent him doing so. I understand the day-to-day temptations but so should he recognise the self-defeating consequences. That every intervention means accountability and responsibility in the NHS never moves to those running local services but remains with those overseeing national politics.

In part the current ambiguity about where organisational power really lies in the NHS is a product of a bifurcated system. Today there are 147 NHS foundation trusts but there are a further 99 providers who operate under the national control of the NHS Trust Development Authority. The long-term objective remains for all trusts to become foundations but the pace of conversion is glacial. Only three have made it through the rigours of the Monitor FT authorisation regime in the last year.

This organisational impasse needs to be broken once and for all. Not just because the current parallel-provider system is overrun with complexity and bureaucracy. But because it leaves the NHS with too much ambiguity and too little clarity. So I would like to see the current approval foundation process being scrapped and, within the next three years, every NHS trust being made a foundation. The TDA should be abolished and its resources made available to Monitor to help turn round those organisations that are in trouble. Some would need to be placed in a special measures category. But as a general rule and as I always intended, all other foundation trusts should then be given greater independence and financial freedom to run their own affairs. It is time for the decades-long journey to be completed towards an NHS where provider organisations are autonomous but operate to common standards and incentives.

That bring me to reforms to how providers are paid. Having in the last decade moved from paying providers for who they are to what they do, we now need to pay them for what they actually achieve. In future providers should be paid less on the basis of the quantity of what they do and more on the basis of the quality of what they achieve. The focus should not be on inputs or outputs but on outcomes. Critically the key financial incentive across the whole care system needs to be targeted on keeping patients healthy and out of hospital. Having obsessed in this last year on toughening regulation, Ministers need to focus as much energy in the next year on refining how money flows around the system so that local services are better incentivised to see patients in the right part of the system. That means taking a population-based approach.

So next there will need to be new reforms to make primary and community care the bedrock of any new system. In recent years spending has been rising on hospital-based care just as it has been falling in primary care. That is a nonsense and it must change. The policy objective for the NHS should be to reduce the number of patients being admitted to hospital and secure a switch in spending from within healthcare budgets so that less goes on hospitals and more goes to new forms of care in communities. The new investment priority for health and social services should be to build a new care infrastructure - polyclinics, intermediate care, telecare and telemedicine – aimed at promoting health, preventing illness and empowering patients. And, critically, NHS foundation trusts should be working to vertically integrate their hospital services with those provided in community and primary care. In other words, they should be reinventing what hospitals do and where they work.

Next reforms that create new structural models capable of better integrating care around the needs of individual patients. The current system is riddled with wasteful and expensive silos. Ultimately, the price is paid by patients – those who have mental health problems as much as those with chronic physical illnesses. All too often their experience is one of duplication and fragmentation. Thankfully it is now widely recognised that in future sustained management of patients with multiple chronic conditions will require a more integrated approach. Much of the current debate on integration focuses on how to unite health and social services into a single care system. That is a noble objective but one that is fraught with complexity and, potentially, very large cost. Elsewhere in the world integration has taken a rather different form. People often speak of Kaiser in the USA as an example of what a vertical integration of services can achieve. But the model I have found most fascinating is the Alzira model from Spain. There, a whole community of patients is looked after under a single capitation-based contract. Providers are paid according to the outcomes they achieve with strong incentives to keep people healthy and out of hospital. Profits for the private providers are capped and, importantly, if patients choose to seek treatment elsewhere – as they can do if, for example, the quality or timeliness of local services is poor – providers face stiff financial penalties. By making friends of competition and collaboration – rather than assuming them to be enemies - outcomes have improved and costs have fallen. There is growing interest in how such a model might work here. NHS foundation trusts, not just commissioners, should be acting as a catalyst for such change in local health economies. And government should help local pioneers remove the barriers – whether regulatory, financial or organisational – that stand in the way of making it happen.

That brings me to supplier reform. Our system of healthcare is unusual in the dominance enjoyed by one public sector provider. Monopolies in any walk of life - whether public or private - rarely deliver either operational efficiency or customer responsiveness. That is why as health secretary I created a managed market in the NHS with the introduction of private and voluntary providers. In my view there should be no preferred providers – whether public, private or voluntary sector. The only yardsticks for deciding who provides health services should be quality, which is what counts for patients, and efficiency, which is what counts for taxpayers. The next wave of reform should create a legal level playing field where public, private and voluntary sectors are able to compete to be providers and are subject to the same exacting standards and incentives. Regulation should be simplified to make it easier for the best NHS foundation trusts to form chains of local services they run across the country. And new entrants should be systematically encouraged onto the provider pitch to bring new innovation and know-how. Pharmaceutical companies, for example, should be encouraged to forge new partnerships with local commissioners, surgeries and pharmacies to deliver compliance and support services for patients. Retailers should be encouraged to provide in-store instant access services for local communities. Telecommunications companies should be encouraged to develop new home-care services for elderly and infirm patients. For the NHS to meet the challenges of the next decade it is not less competition that will be needed. It is more.

There is one final area of reform that above all others holds the key to making the NHS sustainable: how we move patients from being passive by-standers to active participants in health care. If we can achieve this shift in the power paradigm, I believe it will be the most significant long-term change of all. I say that because the explosion in chronic conditions we are now witnessing across the world calls into question how we have traditionally delivered healthcare. Clinicians have prescribed and patients have received. But if you have diabetes what the patient does – the food they eat, the exercise they take, the lifestyle they choose – has a huge bearing on their health. That is why we have to find new ways of making patients co-producers of their health care.

We can glimpse what that new future could look like. During my time as health secretary I championed an expert patients programme to give people, mostly those with chronic conditions, the tools to better manage their own care. By putting the individual patient in charge of managing their conditions the programme succeeded in reducing physiotherapy visits by 9%, hospital outpatient visits by 10% and accident and emergency visits by 16%. And as we seek to increase the proportion of spending on public health from a miserly 5% across the developed world - by focusing on preventing not just treating illness as I believe we should - the way to do that is not by preaching at people but by empowering them.

Much lip-service is paid to the notion of empowering patients. But in truth patient power is marginal in today’s NHS. It is time to make it mainstream. NHS foundation trusts should take the lead in doing so. They should work together to make patient reported outcome and experience measures central to how local services are assessed and rewarded. They should spearhead a transparency revolution across the whole care system so that patients, carers and clinicians alike are able to see which services work best and which do not - from care homes to hospitals. They should lead a national drive to give people, through pharmacies, GP surgeries and community services, the practical help they need – blood pressure monitors, testing kits, mobile health – to improve their own health. And hundreds of thousands of patients, those with a chronic condition especially, should get their own individual healthcare budgets so they have direct control over resources to buy the health care that is right for them and personalised to their needs. Evaluations from both the US and the UK show that where people have direct financial control over their own health budgets levels of patient satisfaction rise and levels of public spending fall. Change in the future relies on the public being insiders not outsiders – being part of the decision-making process rather than a by-stander to it.

NHS foundation trusts – owned as they are by local communities and run as they are by those accountable to local people – can play a leading role in making these changes. In the last decade we have built a new NHS architecture. National standards. Local commissioning. Diverse provision. Community ownership. These reforms, which were once highly controversial, are now a matter of broad concensus. The issue now is whether on this platform we can build a new reform agenda that has an even more fundamental purpose – to fundamentally change the distribution of power in health care so that the patient is in control.

Change will have to happen not just because the cash is running out – but because time is running out for a system that was designed to deal with yesterday’s challenges not tomorrow’s. Meeting these challenges will be daunting but it opens up an enormous opportunity. To reshape how care is delivered so that we improve outcomes, optimise resources and, above all else, empower patients

It is time to move the debate on from how to deal with grinding challenges to one that is about seizing new opportunities. So amidst the gloom there are reasons for optimism. Today there is a particular reason we should all feel a bit more optimistic. A new CEO for NHS England has taken up office. Fourteen years ago Simon Stevens worked with me on the NHS Plan. He is the best person I have ever worked with in healthcare. Due credit to David Cameron and Jeremy Hunt for recognising Simon as the right man for the job. But having appointed him, they now need to empower him. If they do so, he will bring in strategy to replace tactic as the governing motif of the NHS. He will give the NHS clarity instead of uncertainty. And he will bring something even more important. Hope. If there is one thing above all else that he can do it is to give the NHS that precious gift.

Questions and answers

Jo Manley, Hounslow and Richmond Community Healthcare NHS Trust: What are your thoughts on primary care in terms of their role as providers? One of my big frustrations is how we are going to see changes in that sector to feed into the pathways that you described.

Alan Milburn: There are two big unreformed parts of the NHS: community care and primary care. Although it is always very difficult to have an argument with GPs, it is an argument that needs to be joined. This is a cottage industry and these are 19th century artisans, great people though they are, and it needs to be changed. Look at the history and experience of any industry, and what has happened to them: scale and new entrants have driven innovation. We have to apply exactly those same disciplines to all aspects of how we deliver health and social care in this country currently, and that goes for primary care as much as anything else.

The terms of trade have changed with GPs. There is much more of a sense now in the GP community that the old order really has to give way, partly for self-interested reasons. The GP workforce is ageing. No one wants to be a partner and getting close to a majority want to be salaried, which is amazing if you think back to the arguments in 1997 around retaining their independent-contractor status As with so many things, however, while you can have great ideas, what translates ideas into actions is the right leadership, and that goes for the leadership of GPs too.

Rob Webster, NHS Confederation: I was asked recently about the difference between being a chief executive in the NHS now and a decade ago. My reflection was that, in the past, you get away with just running your organisation; now, you have to be a leader in the system. Do you have any reflections on the leadership challenge and opportunity, given that we are asking people in the room to lead both their system and their organisation?

Alan Milburn: Wherever you are in the system now, I would not say it was easy to change the NHS in the way that you helped with when you were in the Department. In comparison with the sorts of issues now confronting the NHS at every level, it is much more complex. One of the very odd things that have happened – and this is why Andrew’s reforms were so misguided – is that, at one and the same time, you unleash enormous change and you take out the glue that binds the system together, so you have to reinvent some architecture that, frankly, has disappeared. It is a jolly good thing. No man is an island, and nor is any hospital. A hospital exists as the endpoint of a system of care.

Somebody recently said to me that, if a patient ends up in hospital, it is a failure. I do not quite see it like that but I know what they mean. Rather than a lot of new structures being imposed from the top down, which was what happened in the old days, you are going to have to invent some structures from the bottom up. It is not universal but the leadership question is not just one of having to cooperate with one another, but about stepping in and doing leadership. Right now, there is an enormous vacuum, at every single level, from 70 Whitehall down: ‘I know what tomorrow’s tactic is but I have no idea what the long-term strategy is.’ Unfortunately, that makes it very difficult for everybody working within the system, but the only alternative is that you decide the long-term strategy.

Stephen Dalton, Mental Health Network: Should the system continue to put its faith in the axis of commissioning being with GPs?

Alan Milburn: I am in two minds about this. Back to the earlier question, there is the obvious anomaly in the current architecture, which is that GPs are both purchasers and providers. That is an oddity that contains potential conflicts of interest. I am rather attracted to the notion of local authorities playing a bigger role in the commissioning stage for healthcare. If you are ever going to get the integration of service at the front end, you are going to need integration of commissioning at the back end. What makes me nervous about it is two things: the prospect of yet more organisational upheaval, which I suspect will be met with a collective groan in executive rooms throughout the country; and GPs seeing their role purely as old-fashioned providers, because they are capable of being and have to be more in the future.

When people say, ‘This is terrible. This is impossible. You can never get people out of hospital and reduce beds. Patients want to be there but we are trying to close them’, I point to 30 or more years of Care in the Community. I point to all those changes that were deeply unpopular and hugely controversial, whereby the old asylums went and new community services were introduced. I look at the way in which mental-health trusts have managed to reduce their bed provision, dealing with patients with extremely serious and severe illness, and have managed to do so in a way that provides a lesson for the acute sector. This is unusual, because the mental-health sector is often seen on the margins, but 30 years of history is something that the acute sector could well learn something from.

Jane Ramsey, Cambridge University Hospitals NHS Foundation Trust: In 2004, I was a very youthful chair of a London primary care trust. During your speech, I felt both nostalgic about the past and also hopeful at the mention of Simon arriving. In 2004, as chair of a PCT, I was worried about the unintended consequences of changes to the GP contract and 24/7 care. Now, given that I am a teaching hospital, I spend a huge amount of time on the care of the frail elderly. Do you think that what appears to happen in A&E departments up and down the land, particularly around Monday teatimes, is partly an unintended consequence of removing 24/7 GP care? Do you have any advice to the next Secretary of State for Health around those sorts of issues?

Alan Milburn: I am so tempted to go into New Labour rebuttal mode, but I will not. I could give you some data points that would confound that argument, but that would not be a useful contribution. There are some lessons to be learned about our experience of pay reform. Overall, I am pleased with the outcome of the GP contract, because it was the first attempt to align incentives with outcomes. In terms of immunisation rates and the number of patients on diabetes risk registers, none of this would have happened without financial incentives. This is the argument that I always thought was rather bizarre in my own party: because people worked in the NHS, they were somehow immune to the notion of financial incentives. I have always found that they work rather well, particularly with doctors.

My lesson to whoever succeeds Jeremy is that I really regret failing to align the incentives on the organisation with the incentives on key individual members of staff. You can have a payment-by-results system that is now more modulated and sophisticated than it was 10 years ago. You can have the right incentives to do the right thing on the organisation, to improve quality of care and patient experience, and to keep your finances in order, but ultimately the manager’s locus of control is not about the organisation but about the clinician. In particular, it is about consultants. We missed a trick in not ensuring that there was better alignment between those financial incentives as they applied to key individuals and those that applied to organisations. If anybody is going to embark upon pay reform again, they will probably need some cash to do so, because there are always losers as well as winners, and nobody wants, politically, doctors and nurses to be losers.

Finally, the current system of national pay-bargaining is unsustainable. Indeed, I want it to be unsustainable because, if we are moving towards a more devolved and autonomous system and, if you do not control 75% of your costs, you do not control your costs. 75% of your costs are on pay, so the people who should control that are those who are responsible for it. The person not responsible for it is either the Secretary of State, the person running NHS Employers, or the NHS Confederation. That will be an uncomfortable message for my trade-union friends but I do not know why it should be, because it will do a power of good for them. They will have to get out there, win and represent members, and negotiate with lots of different bodies. That is the logic of the changes that I have outlined this evening: that you devolve authority over not only how services are run but also how staff are paid.

Jeremy Hughes, Alzheimer’s Society: How do we marry together the local democracy of the foundation trusts with that of local authorities’ health and wellbeing boards etc?

Alan Milburn: There is a plethora of local players now on the health pitch, and they seem to be growing by the moment, which makes everything pretty complex. It is not very understandable from the patient or citizen point of view, so there will be a need for organisational simplification. Despite the fact that I set up the authorisation regime, 10 years on it really is time to move on and to get to the destination that the Conservatives, Labour and the Liberals all want to see: 100% foundation trusts.

There is, however, an even more important job, which is a change in mindset, because this stuff is lip service. I know people use the words but nobody really means them. There are trusts with 100,000 members, which is great, but what are you doing with them? How are you activating and engaging them? Are you using them as a tool for improvements in public health? Are you using them as ambassadors in the community? Are they sitting at the heart of your organisation and really changing the nature of services? How can we make patient experience and how we record it a motivating, dynamic force for change, just as it is within any other organisation or industry?

Among other things, I chair a patient-experience company, iWantGreatCare. If I am travelling anywhere in the world, I do not look at Hilton or Marriott, because I know that they are going to blow their own trumpet; I am interested in the experience of fellow travellers, so I look at TripAdvisor. We have to do exactly the same thing and make this movement in terms of how we listen to and engage with patients, record their views and feed them back. We have to make them instrumental to how the health service is run. We have a friends and family test that asks one crude question, but it is the start of a journey, not the end of it.

Adrian Masters, Monitor: We have not yet had this kind of conversation with the public. What are your thoughts around how we might do that? What kind of commitment do you think political parties could helpfully make in the manifestos they are about to write whereby we could say to the public, ‘This is where you should expect to be at the end of the next Parliament on the NHS’?

Alan Milburn: Taking the political parties in turn, the Conservatives will bear the scars of the Lansley debacle, so they will not go there again, even though they want to. The Liberal Democrats, who are my number one bet to be in government, even if they do not form a majority, will be scarred through association. The Labour Party has decided to oppose everything that the Coalition does and that Labour in office did, which is an interesting political position to take but one that will not help the Labour Party.

The odd thing about health politics is that, by and large, the thrust of policy over 30 or 40 years, with ups and downs along the way, has broadly been in one direction: more autonomy, diversity and plurality, and better data driving greater transparency etc. These are long-running, established tends. By and large, the right has the volition to make changes; the problem is that it does not have the permission. By contrast, the left generally has the permission but usually lacks the volition. Occasionally, however, something happens. I am a born optimist and I really believe that, like nature, politics abhors a vacuum. I do not think it is possible to sustain the current system on the basis of a no-man’s-land position, which is where we are.

In answer to your first question, Margaret Jay worked with me at the Department of Health when Frank was Secretary of State. She had a fantastic phrase about the NHS attitude towards consultation with the public, saying that it was less a process and more a period of time. It goes back to the point on mindset: are we really serious about getting out and engaging with people? It is really tough. Politicians have to do that regularly, and it is really hard, but it is harder not to because, in the end, change in a democracy requires public permission.

While I am not saying that Citizens’ Juries are the answer, whenever I have seen one operate on either a small or large scale, they have always gone through a journey. They start out opposing everything and ultimately agreeing to most things. If you engage with people as adults, they tend to behave as such; if you engage with them as children, you give them permission to behave as such. The reason why there are demonstrations and protests in politicians’ constituencies is that they are given permission to do so, and we have to change that. Going back to Rob’s point, that is a new skill-set and one that the NHS does not have and that other industries do. Perhaps we should learn from them.

Professor Sir George Alberti, King’s College Hospital NHS Foundation Trust: In a cash-strapped system, how do we get the right balance between payment for health, which I am a firm believer in – and it needs to go way beyond bribing a few GPs to lower HbA1C – and payment for disease which is not going to go away?

Alan Milburn: I believe in the principle of both equity and efficiency. I believe in taxpayer-funded healthcare. Thinking about it, what are the options that we face? First, we raise more tax. Everybody here knows that that is a political no-go area for all three main parties. Second, we do more rationing. We used to ration through waiting lists, which we found was a bad idea, not just politically but also clinically. Third, we do more co-payment: we get patients to pay more. We have heard proposals of that sort even in the last few days, and I believe that they are profoundly wrong because they threaten the principles of equity and efficiency. It is political no-go territory and, both ideologically and pragmatically, I do not believe it will happen.

Fourth, you find a way of driving better outcomes, which might be hard to do but it is easier than the other three options. In doing so, we have to change something fundamental: 5% of healthcare expenditure in the developed world goes on public health in the context of epidemics of diabetes, obesity and alcohol abuse. Cancer is no longer a killer but has become a chronic disease. The same is happening with cardiovascular disease. We are spending 5% on prevention, which has to change. I know people like me have been saying so for eons, but this time it really has to, because there is no paymaster with a big cheque and there is no bailout coming down the track. It is not going to happen. It is what it is, so we are going to have to change the paradigm of how we do healthcare. It is more difficult than anything I and others on the journey 10 years ago had to do, but it is what has to be done.