The good doctor sharpens his scalpel

But Shadow Health Secretary Dr Liam Fox believes his day will come, and sooner rather than later, he tells Health Correspondent Barry Nelson.

WATCHING the way Dr Liam Fox handles a meeting of Conservative students, you can't help warming to him, regardless of your politics.With his soft Scottish burr and his sparky good humour, the Tory health supremo holds his audience's rapt attention for the half hour meeting.

Speaking without notes, Dr Fox is an impressive performer, as well as being a snappy dresser.

His street-cred with image-conscious students will have been boosted by stories linking him romantically with pop singer Natalie Imbruglia - although he teases his young audience in the gilded splendour of St John's College that he will not be taking any questions about that particular relationship.

But his speech - delivered in tones which belied its revolutionary implications - would make the blood run cold in anyone who believes in leaving the NHS more or less as it is. It seems that behind the fuzzy Caledonian charm, there is very definitely a scalpel-like cutting edge.

Dr Fox was at Durham University at the weekend as part of a morale-boosting tour of North-East Tories. Unsurprisingly, his message to members of Conservative Forward, is that the Tories are on the way back, that radical and populist new policies are being shaped and that the current debate about Iain Duncan Smith's suitability as leader will be eclipsed as soon as the economic situation deteriorates and New Labour loses a key by-election.

Crucially, Dr Fox believes that Health Secretary Alan Milburn's ambitious plans to "save" the Health Service are doomed to failure.

The MP for Woodspring in Somerset is adamant that the way we think about health care in the UK has to be transformed and that no amount of money poured into an unreformed NHS will make an outdated system meet the needs of the early 21st century.

So what does he think about the Government's controversial decision to press ahead with so-called foundation hospitals, freed from direct Department of Health control and given a range of financial freedoms?

Slowly sipping what he agrees is undoubtedly a "healthy" glass of red wine, Dr Fox jokes that he's very happy to add to Mr Milburn's discomfort by backing his policy on foundation hospitals - but adds that the scheme simply does not go far enough. He would like to see every NHS hospital given the freedom to borrow money and vary pay as part of a wide-ranging reform of the Health Service.

Dr Fox, who has visited a vast array of countries to study different health systems, says the Government seems to have "missed the point" over foundation hospitals. "When I looked at foundation hospitals in Spain they said the freedoms they required were freedoms to borrow, freedoms to set their own pay and conditions and to determine their own use of technology, especially information technology. In Britain, of course, their ability to borrow is going to be very severely curtailed.

"They will have to stick to collective pay bargaining, they will be part of the Government's IT strategy."

The Tory MP cannot understand why Mr Milburn wants to limit the number of foundation hospitals. "If the case you are making is that foundation hospitals will give better care to patients, why would you want to limit them to only a few?"

Critics of the foundation scheme - such as former Labour Health Secretary Frank Dobson - have argued that the scheme will create a two-tier system and lead to the mass exodus of staff to another hospital that pays higher rates. If all hospitals were foundation hospitals, says Dr Fox, this would not be an issue. "It makes sense that all hospitals should have the same freedoms to look at how you attract staff."

Dr Fox says it was impossible to choose an "off-the-peg" foreign health system that would suit the UK but hints that when new Tory health policies are announced shortly, foreign models of providing health care will be an important influence.

So what are these new policies - and why are they so radical?

The former Buckinghamshire GP compares what he would like to do for the NHS with what Margaret Thatcher's radical Tory government did for the council house sector.

In essence, Dr Fox would like to open the NHS up to competition and - controversially - allow individuals who have paid taxes all their working lives to take out that money to spend it how they see fit.

If the NHS is unable to deliver the service the patient is looking for, Dr Fox argues that they should be free to go to the private sector or even abroad.

But crucially, instead of "paying twice" for the NHS and for private care, Dr Fox argues that, if necessary, the patient should be given back part of their personal investment in the Health Service to buy the care they need.

"I would like to give people the freedom to use the system they think is best. That is a way of making sure the NHS would compete properly in terms of quality rather than having a captive audience. I think the NHS and the independent trusts that we would have should be getting patients because that is where patients want to go, not because they have got no alternative."

Dr Fox appears confident that his scheme can work, despite the inevitable criticism that this will create a two-tier system.

"Everyone would still have to pay into the NHS. It just means that if the NHS can't give you what you want, you get the chance of getting your treatment elsewhere. We should be a lot more worried about the patients and a lot less worried about the system. What matters is patients getting quality care when they want it. The idea that we should penalise the patients because it's more convenient for those who run the system is absurd."

Far from wrecking the NHS, Dr Fox argues that significant numbers opting to have treatment elsewhere will leave all the more for those who are still waiting inside the NHS itself. He insists that what he is talking about is extra spending rather than alternative spending.

As for the way Labour is currently running the NHS, Dr Fox says: "Under Labour, despite all their promises, the number of beds in the NHS has fallen considerably. The increase in spending in real terms over the last three years is about 10.8 per cent - but this has resulted in a total increase of activity of about two per cent.

"While we have had a reduction in the number of beds, we have had a big increase in the number of administrators so we now have more than 1.2 administrators to every bed."

He shakes his head at what he sees as an abuse of PFI, the private finance initiative dreamt up by the Tories and enthusiastically adopted by Labour.

Prime Minister Tony Blair elevated PFI, which means public projects are funded privately and then rented to the public sector, to "near-religious status," the Tory spokesman claims.

He blames recent teething problems at some new hospitals on the "indecent haste" with which the Government forced through PFI deals at hospitals around the country - including the University Hospital of North Durham. "This was always going to mean that corners would be cut," he says.

Even the Government's argument that they have opened many new NHS hospitals fails to cut any ice. "You can't treat more patients if you have fewer beds in the new hospitals. The Government sees the Health Service as the buildings, what they don't measure is the quality of care being offered. It doesn't matter how many hospitals you build, it's what happens inside them that really counts."

Tantalisingly, Dr Fox will not reveal any more of future Tory policies but his parting shot may or may not worry the incumbent Health Secretary, Alan Milbu rn.

Claiming that the mood of North-East Tories is "buoyant" he says he would not be surprised that following the recent election of a Conservative mayor in North Tyneside, seats like Darlington might soon be changing hands as well.