While experts argue, the health service is going bust. The coalition must accept Labour’s offer of a compromise

The NHS Bill is on life support. Encrusted with amendments, the Bill survived some eminent assaults in the House of Lords yesterday. But it is time to put it out of its misery.

So much political capital has been sunk into the Health and Social Care Bill — not least by the Prime Minister, who has had to travel the country to reassure people that it won’t wreck the health service — that the Government is determined to see it pass. No one seems to care much about the detail any more, as long as it goes through. But it would be better to abandon it.

There are three reasons why. First, it was never going to make much difference to patients. It does nothing to turn the NHS into a 24/7 operation, rather than one where you dread falling ill out of hours. It will not close failing hospitals. It doesn’t address the shocking standards of nursing care in some hospitals. Worse, it is an exasperating distraction from the explosion in chronic diseases and old age that could bankrupt the NHS while people argue about the difference between “promoting” and “providing” a service.

The second problem is political. Once there is a new Act, anything that goes wrong will be blamed on this Act and this Government. A great deal is bound to go wrong before the next election because of cash constraints, the growing demand for healthcare, the tiers of poor managers and the total refusal to spell out the reality of the situation. People have been led to think that ring-fencing the NHS will mean that there will be no cuts. But cuts must come, because costs are outstripping increases in the budget. This will be a huge issue at the next election.

The terrible irony — and the third problem — is that there is nothing transformational in the Bill that requires primary legislation. Competition and GP commissioning were not invented by Andrew Lansley, the Health Secretary; they began under Labour. The most successful GP consortium I have visited, in Bexley, started in 2007. Competition was unleashed by Alan Milburn’s “any willing provider” policy in 2000. When the coalition took over, the NHS was spending £1 in every £20 on services from the private sector or charities. A private company was shortlisted to take over Hinchingbrooke NHS hospital in Cambridge before this Bill was even dreamt of.

You wouldn’t know any of this from the current hysteria. By presenting these ideas as new and creating a Bill that needs parliamentary assent, Mr Lansley has given vested interests the perfect platform to complain about “a secret plan to break up the NHS”. So all the old arguments about the internal market that were made about the Clarke reforms of 1990 and the Milburn reforms of 2000 are now being replayed unnecessarily, in stereo. Mr Lansley has even managed to create controversy about whether he will remain responsible for the NHS. This should never have been an issue: the political reality is that the secretary of state will always have to answer for a taxpayer-funded service.

I am a supporter of competition, if properly regulated. I have seen it work in other countries where it is simply not a political issue. I have read the studies from Bristol and the LSE that suggest that competition in the UK has generally improved quality. So I have been surprised by how few private sector providers strongly support the Bill.

Stephen Dorrell, the chairman of the Commons Health Select Committee, has had a similar experience. “It is not at all obvious that the Bill, either in its original or amended form, contains significant changes to the application of competition in the NHS,” he says. Even Reform, the pre-eminent think-tank arguing for health reform, is lukewarm. It is a political axiom that controversial policies need intellectual advocates on the outside. But this Bill has none.

The big issue facing the NHS, and every healthcare system in the world, is financial. The three D’s — depression, dementia and diabetes — are likely to bankrupt the system unless it becomes more efficient.

By 2010 there was a clear private consensus between the three main parties: that tough choices had to be made to keep the NHS affordable, that failing hospitals should be closed, and that choice and competition were essential to raise standards. In 2011 we are back to political posturing.

When it came to power, the coalition had a chance to explain that the only way to protect the NHS was to change it. A review was already under way in London that proposed closing surplus A&E units and some hospitals where care was inadequate. But the Government scrapped it and pledged to keep maternity units and A&Es open to avoid controversy, substituting a Bill that has proved more controversial for far less reason.

Understandably, the Government does not want to give in. It claims that the Bill is essential partly because it would abolish primary care trusts in order to free up GPs to commission their own services.

Good managers have left PCTs in droves, pre-empting the legislation. Yet a possible way out of this quandary has been offered by Andy Burnham, appointed last week as Labour’s Shadow Health Minister. He has offered to support the coalition on GP commissioning if it drops the Bill. He has had short shrift from Mr Lansley, who accuses him — fairly — of having slowed down the pace of reform when Gordon Brown took over from Tony Blair.

But the offer is a potential opportunity if Mr Burnham were prepared to publicly support efficiency savings. Which he might. Labour needs to re-establish its credibility. And Mr Burnham is a former Health Secretary, who is pragmatic about the need for change and who argued for reducing the number of maternity units in his own backyard at the last election, despite local opposition.

Accepting Labour’s offer would be humiliating in the short term, but politically better in the long term. And better for the NHS. Many of the amendments to the Bill have been sensible. But it has also been weighed down with a profusion of quangos. And as opposition has become a totem of political virility, many reformers fear that some of the progress made by previous administrations could actually be reversed in Parliament.

The Bill is a colossal political and communication failure, made worse by crazed organograms and impenetrable technocratic statements from the Department of Health. What is needed is political will and courage, not new rules and not misplaced machismo.