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Management in the 1950s

Some people thought the cost of the National Health Service (NHS) made it a problem rather than a success. It was providing new services and becoming increasingly effective, but it was also becoming more expensive. Aneurin Bevan had hoped that as people's health improved the cost of the NHS would fall. In reality, people demanded more services and the cost of providing these rose. In 1950 the NHS cost the country £400 million, by 1965 the cost was £1,200 million, and by 1975 it had risen to £5,200 million per year. Bureaucracy and waste were also major problems, as many health authorities were duplicating each other's work.

Labour principles slip

The question of cost made the National Health Service (NHS) into a major political issue, which began as a debate within the Labour government. The Chancellor, Stafford Cripps, wanted to introduce charges for items such as spectacles. This alarmed Aneurin Bevan who initiated an enquiry that found NHS spending was good value for money. By 1951 Bevan was moved from the post of Minister of Health to become Minister of Labour, and a new Chancellor, Hugh Gaitskell, took his place. Through the National Health Service Amendment Act of 1951 Gaitskell introduced a cap on NHS spending and charges for dental work and glasses.

Rising costs

The Conservatives won the 1951 election, giving them their first chance to run the National Health Service (NHS). They remained in power until 1964. One of their main priorities was to cut taxes but the rising cost of the NHS made this difficult; it was politically sensitive to attack the basic principles of the system. However, there were many proposals to introduce charges for aspects of NHS treatment, such as prescriptions and dental care. These were introduced through the National Health Service Act of 1952.

Despite this, concerns about the cost of the National Health Service (NHS) continued, dominating Cabinet records. In 1952 an enquiry led by Justice Danckwerts granted an additional £27 million in back pay to General Practitioners (GPs). In February 1953 a Treasury enquiry looked for ways to stop further increases in NHS spending, but accepted it would be impossible to cut the cost of the NHS. Even Bevan complained about 'cascades of medicine pouring down British throats', but nevertheless did not want to see his principles compromised.

Greater public contributions

The issue of cost remained at the top of the agenda for the rest of the Conservative period in office. The Guilleband Report of 1955 found that costs within the National Health Service (NHS) were not excessive and there was no way to make cuts without reducing services. The government looked at options that involved greater public contributions and in 1957 the Conservatives passed the National Health Contributions Act. The Act doubled people's national insurance contribution and was an attempt to raise money without officially raising income tax. In the early 1960s the Conservatives looked at further measures to increase public contributions. Direct charging was politically unacceptable, so a further increase in national insurance contributions was introduced at the end of 1960.