ABSTRACT
New Labour's rhetoric rejects the 'direct provision' state for the regulatory state. Performance management was New Labour's replacement for the internal market in the early years. New Labour has a tendency to construct policy on the basis of image rather than remain open to the counter-intuitive approach which nevertheless makes policy sense. Health policy in England – in the sense of 'high politics' that is political decisions as to the shape of the health system – is driven primarily by ideological factors, rather than technical factors aimed at increasing the cost-effectiveness of public expenditure and/or improving quality. Resource allocation to health authorities has the advantage of allowing local decisions as to how to produce 'health gain'. The Foundation Trust should not lead to a divorce from the 'local health economy'. The idea of the new regulation is that the state is 'hollowed out' - with regulation replacing provision in a welfare state which mirrors the wider 'post Fordist' economy.
