The Prime Minister, Margaret Thatcher, announced that a review of the NHS would be taking place

For several years, NHS reform had been on the Conservative agenda, but there were other, greater priorities. Yet there had been a blizzard of rumours and reports, often from the right, including proposals for a service based on private insurance. This was deemed electoral suicide by the Prime Minister, Margaret Thatcher. It was therefore a surprise when she announced during a BBC Panorama interview that a review of the NHS would be taking place. The decision to conduct the review was prompted by increasing concern over finances in the NHS. The review was subsequently undertaken exclusively by a group of ministers including Margaret Thatcher, John Major, Nigel Lawson, Tony Newton and John Moore. The latter two ministers were later replaced by Kenneth Clarke and David Mellor.

The ministerial review committee set out to be mindful of four guiding principles:

  • high quality medical care should be available to all
  • patients should have the greatest choice possible
  • any changes made to the system must make real improvements in health care and
  • decision making should be devolved to local elements to be as close as possible to patients.


Despite lengthy debates among ministers, the review produced the following policy ideas that were tested in the white paper Working for patients a year later:

  • money in the healthcare system should follow the patient
  • promoting private health insurance by providing tax relief (eventually decided as only applicable for elderly people)
  • the creation of an internal market – competition would drive improvements in quality and efficiency
  • self-managed hospitals (later to become NHS trusts) could become service providers
  • fundholding by GPs would be beneficial because GPs could better assess patient needs and priorities.

During the review, some of these policy discussion topics were leaked, provoking anxiety and opposition from the public and medical organisations. The Royal College of Nursing, for example, saw the idea of promotion of private insurance and competition as threats to the NHS (Edwards and Fall, 2005).


Prime Minister: Margaret Thatcher

Health and Social Services Minister: John Moore