The Entrepreneurial State: Commercial and Charitable Activities by Health Authorities

Abstract

The Royal Commission was adamant that the NHS should remain funded through direct taxation. It observed that the possibilities of generating additional sums of money for the NHS were limited since ‘trivial additions … might be disregarded by those who control NHS expenditure, but would not assist an underfinanced service, while a substantial addition would probably lead to a reduction in funds made available from the Exchequer’ (Royal Commission, 1979, p. 338, para. 21.24). The Commission argued that increased charging would not discourage frivolous use of the service; sources such as lotteries would ‘be at the very best marginal in a national context’; voluntary efforts would not contribute ‘significantly’ to NHS funds, while there were technical objections to hypothecated taxes (paras 21.28–21.34). Nonetheless the subsequent years have seen numerous initiatives designed to raise funds from non-exchequer sources and, by exposing parts of the NHS to commercial disciplines, to improve the internal efficiency of the service. The growth of such initiatives betokens not just efforts by the government to shift the boundaries between public and private sectors (for example prescription charges, income generation, competitive tendering), it also symbolises the problems facing individual health authorities, who have seen little alternative but to raise funds either internally, through more ‘efficient’ ways of working, or externally, through drawing on sources of private finance, charity or joint arrangements with commercial operators of health services.