At the Budget two years ago, Gordon Brown, Tony Blair and Alan Milburn walked like three gunslingers of old into the Last Chance Saloon - taking the National Health Service with them. Yesterday all three made clear that now they are in, they are not only prepared to gamble, but to gamble mighty high.

The growth promised to the NHS at the start of the last comprehensive spending review in 2001 was large by historical standards - 6.1 per cent annually in real terms. That sum has since been topped up, but there was more to come yesterday. The Budget amounted to a far bigger commitment, and over a longer period of time.

It stretches out for five years - an unprecedented period for the health service to know the minimum that it is going to get. And the minimum is huge: another 43 per cent on NHS spending in real terms by 2007-08, taking spending above £105bn from £68bn today.

If this plan fails, then we can kiss goodbye to the NHS as we have known, loved, and occasionally hated it over the past 50 years. Certainly for the first time in at least 25 years - perhaps for the first time in 50 - the NHS is being given a real chance to succeed. Will it?

There are huge uncertainties, both short and long term. Consider just a few. There are three big pay negotiations under way at the moment - for consultants, general practitioners, and for all other NHS staff, who are expecting a new pay system intended to reward equally work of equal value. Each will cost hundreds of millions of pounds in restructured pay in return for new working practices - costs on top of normal annual pay rises.

If any one of these negotiations goes badly wrong, industrial strife could result. Even if it does not, doctors in particular could choose to retire early. Since yesterday's report by Derek Wanless points out that there are barely enough health professionals as it is, disaster would result. The government's stated targets for the next five years would become impossible to meet.

Many other things also need to go right. Mr Wanless emphasises the dire nature of NHS information technology, for example. There have been at least three reports in the past decade proposing measures to put that right. None has been acted upon, and it would be a big and risky undertaking to put the problems right. The list goes on.

The tragedy is that, by over-centralising in its first four years, the government stifled initiative and wasted time. At the same time it foolishly raised expectations. In 1998, it claimed that the relatively small extra sums it was then allocated would "transform" the NHS. The cash now being poured in may help the NHS to feel better by the time of the next election, but it is unlikely to feel cured.

Gordon Brown tacitly acknowledged that yesterday by spending plans that stretch out to 2007-08. It is also the key message from the Wanless report, which envisages high spending growth not just for the next five years but for a decade. Only after that would growth rates level off to nearer the 3 per cent a year that the NHS gained up to 2000.

The question is whether the public will feel at the next election that enough progress has been made for it to remain loyal to the public funding model for the health service. By planning so far into the future, the chancellor may have got voters on his side for long enough to give the NHS a last, extended, chance. He has also presented the Conservatives with the toughest of challenges. Will they be prepared to renege on the government's commitments to NHS spending yesterday and change the way that the service is funded?

The difficulty for the government is that the Wanless report foresees spending increases far out into the future, past even the chancellor's five-year horizon. That will encourage a debate about the way the NHS is funded, rather than solidify the consensus the chancellor would prefer behind a publicly funded NHS.

The key message from the Wanless report is that a good quality health system is an expensive endeavour. It will cost the extra billions to improve it, no matter how that money is raised - from taxation, social insurance, charges or private insurance. The figures are subject to uncertainty, but anyone who wants to change the funding system will have to explain in detail how the costs of that would fall on individuals, employers and patients.

As to whether the existing system will work, that depends on a number of factors. Labour must get its approach to management right; it must introduce more competition into the supply of services; use the private sector and the resources available overseas; devise new financing mechanisms; and provide NHS managers with the freedoms and incentives to perform better.

It must also persuade the public that it is right in the short-term to buy in some services that are not ideal value for money but that are necessary stop-gaps. Time is needed before it can expand capacity in terms of staff, equipment and facilities. Here, the government's rhetoric is right, but its actions to date have been unconvincing.

This is a sizeable challenge. If the government gets it wrong, the NHS will be replaced by something else in less than a decade. History will record a sad epitaph: that the party that established it and professed to love it most ended up killing it. And the NHS died not because it was necessarily a flawed system, but because of the managerial failures of politicians.

more from FT.com
Health charts
NHS set to embrace US-style system of payments
Health bill paid by upbeat forecasts
Health bill in 2022 could be an eighth of national wealth
Brown raises taxes by £8.3bn to fund health

EMAIL THIS PRINT THIS MOST POPULAR