The NHS at 75: lessons from the birth of the welfare state

William Beveridge and Aneurin Bevan built the national health service on a foundation of radicalism and pragmatic compromise. Public service reform—once again urgently needed—may depend on leaders showing such qualities

July 04, 2023
A patchwork of ideas: student nurses learn the art of bandaging in 1948, ahead of the creation of the NHS that same year. Image: Trinity Mirror / Mirrorpix / Alamy Stock Photo
A patchwork of ideas: student nurses learn the art of bandaging in 1948, ahead of the creation of the NHS that same year. Image: Trinity Mirror / Mirrorpix / Alamy Stock Photo

Had you wandered up Kingsway in central London on the night of 1st December 1942, you might have seen a curious spectacle: a long queue of people, waiting for hours to buy copies of an official report that would be released at midnight. The great social reformer Sir William Beveridge had finally delivered his much-anticipated plan for a more caring state to be built once the war was won. During the Depression of the 1930s, the sight of people queuing—for dole, for soup—had symbolised the wastefulness of the old system; now all that was to be swept away. After one last long wait, a new, universal welfare state would be born, on 5th July 1948.

Yet 75 years after its creation, the centrepiece of that 1940s vision—the National Health Service—seems to be in terminal crisis. If Labour is to keep its promise to save it, what should it take from the competing traditions that created the modern welfare state, and the two contrasting figures who led the way?

Beveridge—a haughty, impossible man, who thought nothing of treating cabinet ministers like office boys—had been an expert on unemployment insurance since the Edwardian era. In response to the crises of the 1930s, he had lurched to the free market right, then leftward towards comprehensive state planning. His 1942 plan for universal social insurance carried traces of all this: his enthusiasm for voluntarism and self-help jostled with a zest for centralised command and a revulsion at the indignities of means-testing the poor. This complicated heritage reflected the thicket of existing welfare provision he was endeavouring to simplify, in which charities and councils, churches and trade unions, friendly societies and insurance companies all played a part. Beveridge proposed to tidy all this up into a single system: every citizen would have to contribute to one social insurance scheme at a flat rate. In return, they would receive a flat-rate subsistence benefit when they lost their job, or fell ill, or grew old.

However, beneath the contributory principle, Beveridge’s plan depended on the other approach that fed into the new system—the tax-and-spend powers of the state. His report explained that it would only work if there were “comprehensive health and rehabilitation services”, provided according to need. You could not have national insurance without a national health service. To push through this worryingly radical idea, and so secure the creation of the new welfare state, a very different political figure was required.

If Beveridge grew up surveying society from the social peaks, Aneurin Bevan first saw it from the Welsh valleys—and the pits, down which he followed his miner father at 14. Beveridge was a scholar of unemployment; Bevan had experienced it first-hand. By his early thirties, he was the Labour MP for Ebbw Vale, and in the face of the Depression his politics veered far to the left. When Labour swept to power in 1945, Clement Attlee made him minister of health, and he set about building the NHS in three years flat, in time to coincide with the start of Beveridge’s insurance system. On the evening before the launch of the new welfare state, Bevan recalled the “bitter experiences” of his early life. He blamed the Conservative party, for which, he said, he harboured “a deep burning hatred… So far as I am concerned they are lower than vermin.” 

Beveridge was given to fiery rhetoric too, declaring that he was slaying the “five giants” of disease, idleness, squalor, ignorance and want, that this was a time for “revolution, not for patching.” Yet look closer, and both approaches involved significant compromise.

Beveridge was a Liberal, and to many on the left, his contributory approach was not the way forward. The flat rate was regressive; better to fund social insurance from taxation. Beveridge wanted to phase in his universal pension over 20 years, as contributions grew sufficient to fund it, but Labour chose to start issuing payments as soon as the scheme took effect. After all, ministers noted, the old people concerned had lived through two wars, and the 1930s. On top of that, Beveridge’s contributory, universalist, non-means-tested benefits were very meagre and had to be supplemented with “national assistance”: a non-contributory, means-tested safety net for the poor, funded by taxation.

Bevan, meanwhile, did not start from a blank slate, any more than Beveridge had. The healthcare system inherited from the 1930s had many strengths, but was a patchwork of vested interests, not least the powerful insurance companies and the medical profession itself. Bevan conceded to the consultants the right to continue to treat paying patients, and accepted GPs’ resistance to being absorbed into the new NHS salariat. Residential accommodation for the elderly remained under local authority oversight, with charitable and private organisations still involved.

At the same time, both innovations produced unexpected consequences. Beveridge hoped that his main insurance scheme would soon do away with the need for a means-tested safety net. In fact, national assistance (later renamed “supplementary benefit”) expanded apace. His cherished flat-rate contribution system, on the other hand, was eventually scrapped as regressive and inadequate. 

Likewise, expectations that the NHS would improve the nation’s health and so reduce costs were not borne out. Bevan was soon having to ask the Treasury for additional funds, and eventually resigned over the introduction of prescription charges for dentures and spectacles. By the 1970s, the issues troubling the NHS in 2023—employees chafing against inadequate pay, a government grappling with economic turmoil and unable to offer much help—were already familiar.

Today, after decades of grand structural changes, and the ebb and flow of funding, much of the effort on rescuing the NHS is focused on basic issues like making the organisation function more efficiently, on recruiting and retaining enough staff, on preventing people falling ill or caring for them at home. The most obviously innovative thinking lies in the possibilities offered by new technology. But the dilemmas Bevan and Beveridge faced in the 1940s are still with us. In January, the shadow health secretary Wes Streeting seemed to suggest that he planned to do what Bevan had been unable to do: ending the small business-style partnership model many general practitioners still operate, and bringing them into the NHS salariat instead. The Telegraph promptly reported that this would cost £7bn, given the cost of buying out GP-owned surgeries. The Times made it £15bn. By April, Streeting was abjuring talk of “nationalising GPs”, but noted that increasing numbers “are choosing to take the salaried route”, and insisted that “the status quo is not an option.”

But perhaps the most obvious echo of the 1940s sounds through the fraught question of social care, which Bevan left to the local authorities. Should this be taken on by the central state? And if so, should it be funded Beveridge-style, by contributions, or by the taxpayer—or by individuals and their families? 

The struggle to answer that question reads like a farce in slow motion. In the 1980s, the Thatcher government encouraged councils to move from providing care to commissioning it from the non-profit and private sectors. In 1990, the Department of Health declared that it expected that “local authorities will institute arrangements so that users of services of all types pay what they can reasonably afford towards their costs.” In 2010, in the dying months of the New Labour era, the health secretary Andy Burnham began the process of establishing a publicly funded National Care Service. This was then aborted by the incoming coalition, which charged a commission under Andrew Dilnot with examining how social care might better be funded. Dilnot recommended generous means-testing and a lifetime cap of between £25,000 and £50,000, but this too was abandoned, and despite further plans, the issue remains unresolved.

Having promised a universal National Care Service funded from taxation under Jeremy Corbyn, Labour is still proposing to “build towards” such a model, though how it would be paid for has now become an open question. In June, a Fabian Society report recommended fusing councils, private care providers and government together in a single public service, with support available to all, “regardless of their means”. Along with the Dilnot cap, one charging option it suggests is a “universal contribution”. Meanwhile, in Scotland, a new National Care Service is due to launch in 2026.

Even if England does finally see something similar, the competing traditions that shaped the model of the 1940s will remain. The most striking lesson, looking back at 75 years’ distance, is that trying to make complex public service reform happen pushes radicalism and pragmatic compromise close together: much closer than a more heroic narrative might suggest. Bevan and Beveridge both exhibited both qualities. If the reforms needed to give the NHS a new lease of life are to be achieved, similar suppleness will be sorely needed. Seventy-five years on, with queues of ambulances outside hospitals, recovered patients stuck in much-needed beds, vital operations delayed for months, and patients spending whole days unseen in A&E, many people are waiting once again.