Terms of Reference

1. The NHS Next Stage Review will build on the progress made in delivering the vision set out in the NHS plan and the Government's reform agenda, to identify the way forward for a 21st Century NHS which is clinically-driven, patient-centred and responsive to local communities.

2. The review should engage with patients, NHS staff and the public on four critical challenges:

• Working with NHS staff to ensure that clinical decision-making is at the heart of the future of the NHS and the pattern of service delivery

• Improving patient care, including high-quality, joined-up services for those suffering long-term or life-threatening conditions, and ensuring patients are treated with dignity in safe, clean environments

• Delivering more accessible and more convenient care integrated across primary and secondary providers, reflecting best value for money and offering services in the most appropriate settings for patients

• In time for the 60th anniversary of the NHS, establishing a vision for the next decade of the health service which is based less on central direction and more on patient control, choice and local accountability and which ensures services are responsive to patients and local communities

3. The review should consider the case for a constitution of the NHS as the basis of a sustainable and lasting settlement that meets these challenges, enhances local accountability, secures value for money and protects the fundamental values that the NHS has always embodied.

4. The review should help support local patients, staff and the public in making the changes they need and want in their local NHS and make recommendations to the Prime Minister, Secretary of State for Health and Chancellor on how the NHS can best meet these challenges whilst delivering a publicly funded, comprehensive, affordable, high-quality service on the basis of need and not ability to pay. It will report by June 2008 with an interim report in October 2007.

Announcement of the Review

The Secretary of State, Alan Johnson announced the review in the following statement to the House of Commons on 4 July 2007. You can also read the full Hansard transcript of the statement, and the ensuing debate, on the Parliament website.

With permission, Mr. Speaker, I wish to make a statement about the NHS. Next year marks the 60th anniversary of the creation of the national health service. If the welfare state represented the crowning achievement of Attlee's post-war Labour Government, the NHS was the jewel in that crown—one of the great civilising influences of the 20th century.

After the carnage of the second world war and the poverty and deprivation that went before, the advent of the NHS heralded a new era of equity, with medical care available for all—the weak, the sick and the vulnerable, as well as the wealthy and privileged. Nye Bevan said that the NHS made society 'more wholesome, more serene and spiritually healthier'.

That is as true today as it was in 1948. However, great change has occurred in the intervening 59 years, presenting new challenges for that cherished institution.

We are living longer, partly thanks to the NHS and partly owing to incredible scientific advances, with groundbreaking research emerging every day, bringing new cures but also extra costs. We are more discerning as consumers: we have gone from the old ration-book culture to a new iPod age, in which we increasingly expect choice and convenience. And we are more prosperous, with a range of goods and devices—at one level improving our quality of life, but also leading to an increase in lifestyle diseases, such as obesity and diabetes.

Society cannot stand still in the face of scientific and social change, and neither can the NHS. We have trebled spending to £90 billion a year, so there are now 80,000 more nurses and 36,000 more doctors. That unprecedented investment has been matched by new ways of working, from practice-based commissioning to NHS Direct and foundation hospitals.

On most objective measures, the NHS is performing better than ever, with more than 1 million extra operations taking place every year. Waiting lists are down, while satisfaction levels are up. Ninety two per cent of patients describe the treatment that they receive as 'good', 'very good' or 'excellent'. Only a few weeks ago, a global study by the Commonwealth Fund ranked the NHS first in a comparison with five other developed countries, including the US, Canada and Germany.

Yet, subjectively and anecdotally, there has been confusion and frustration in the NHS. The public are rightly concerned to know that their taxes are being wisely spent to build a health service that will meet their needs. Doctors, clinicians and nurses complain that they are fed up with too many top-down instructions, and they are weary of restructuring. They want a stronger focus on outcomes and patients, and less emphasis on structures and processes. That lack of confidence matters, because of the impact that it has on the operational capacity of the service. If the morale and good will of the profession is dissipated, our capacity for bringing about improvement for patients diminishes.

Restoring the NHS was one of the Government's top priorities and, following almost two decades of neglect, a huge amount of reform in a short period of time was unavoidable. That was, as it were, the 'emergency room' approach and, in the early stages it brought about substantial achievements. However, we now need to forge a new partnership with the profession.

Having addressed the funding shortfall, and put the necessary reforms in place, we will give the NHS the sustained period of organisational and financial stability that it requires. I can announce today that there will be no further centrally dictated, top-down restructuring to primary care trusts and strategic health authorities for the foreseeable future.

But we need to do more to make sure that the NHS keeps up with the changing demands and expectations of patients. New drugs, new medical technologies and better clinical practices provide huge opportunities, while lifestyle diseases and an ageing population present major challenges. To set us on the path to the next stage of the transformation of the NHS, my right hon. Friend the Prime Minister and I have asked Professor Sir Ara Darzi, one of the world's leading surgeons, to carry out a wide-ranging review of the NHS. This is a once-in-a-generation opportunity to ensure that a properly resourced NHS is clinically led, patient-centred and locally accountable.

The review, the first of its kind, will directly engage patients, NHS staff and the public on four critical challenges. First, we want to work with NHS staff to ensure that clinical decision making is at the heart of the future of the NHS and of the pattern of service delivery. Secondly, we want to improve patient care, including providing high-quality, joined-up services for those suffering long-term or life-threatening conditions, so that patients are treated with dignity in safe, clean environments.

Thirdly, our aim is to ensure that more accessible and convenient care is integrated across primary and secondary providers, reflecting best value for money and offering services in the most appropriate settings for patients. Fourthly, we will establish a vision for the next decade of the health service that is based less on central direction and more on patient control, choice and local accountability, and which ensures that services are responsive to patients and local communities. The terms of reference for the review have been placed in the House of Commons Library, and I have written today to all NHS staff to explain the importance of this new approach.

Professor Darzi will complete an initial assessment in three months' time to inform the comprehensive spending review. He will produce his full report in the new year, setting out a new vision for a 21st-century NHS, coinciding with the 60th anniversary celebrations.

I know that the review will not succeed if it is controlled from above: the best of the NHS sits not at the top of the organisation but in the millions of complex and diverse relationships that exist across the country between dedicated, devoted professionals and their patients. The success of the review will depend on gaining access to those relationships and stimulating a range of lively, local, provocative debates. The scale of our discussions with staff, patients and the public will be unprecedented, harnessing Professor Darzi's wide experience of building engagement as part of his work in London and elsewhere.

Patients must have the chance to shape the kind of NHS they want, to say how they wish to access services as they manage increasingly complex lives, juggling competing demands. They should have the chance to say how they feel about services delivered through pharmacies, the internet and other new technologies. We must respond by ensuring that they have more convenient services, open when they need them, making it easier to book timely appointments. Patients should also have the chance to say how we can make services more personal to them, particularly in long-term care.

Although it is right that we look forward, we must also deal with the problems at hand. A major immediate concern for patients is the cleanliness of hospitals. Last year, NHS staff successfully brought about a reduction in MRSA bloodstream infections as well as stemming the increase in C. difficile reports. Today, I am providing funding for each director of nursing in every strategic health authority to work with front-line nurses to ensure that they get the support they need to provide clean, safe wards. I am also doubling the size of the infection improvement teams, so that all trusts struggling to meet the MRSA target can have access to doctors and nurses who are experts in infection control, to help them get back on track.

Public services cannot be transformed by going against the grain of public service, or without support from the professionals who know the NHS best. As Secretary of State, I am determined to establish a new, closer, more robust social partnership between patients, practitioners and policy makers, based on trust, honesty and respect. That is why Professor Darzi is leading the review, supported by a team of leading clinicians across the country. He will engage directly with front-line staff, not just the great and the good of the health world, but those working in every primary care trust and hospital trust up and down the country.

As part of the review, we must look at how we make decisions on the shape and location of hospital services. The way we do so must be transparent, open and accountable. People need to know that decisions are being made for the right reasons by clinicians, and are based on the best available medical evidence. While the review is under way I will, as a matter of course, ask the independent reconfiguration panel—our expert clinical group—for advice on any decisions made at local level that have been referred to me by overview and scrutiny committees. I will make sure that any changes made are made on the basis of clinical need and patient care.

At the end of the review, we will consider the case for a new NHS constitution, with respect for the needs of patients and the judgment of professionals at its heart, ensuring that power is devolved to those who know the service best. That will ensure that the service is genuinely led by the needs of patients, providing value to the taxpayer as we move to the next stage of improvement. It will protect the enduring, cherished principles of universal health care, free at the point of need, which lay behind the establishment of the NHS, and ensure that this precious institution continues into the 21st century in ruder health than ever. I commend the statement to the House.