Whitehall permanent secretaries placing bets that John Major's last health secretary will return to the cabinet
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Andrew Lansley, the health secretary, is in a precarious political position. Photograph: Dan Kitwood/Getty Images
Buy Dorrell and sell Lansley. That is the advice doing the rounds at senior levels of the Whitehall stock exchange.
Britain's grandest share market, run by the Sir Humphreys who preside over Whitehall departments, has reached a settled view. Stephen Dorrell, Sir John Major's last health secretary, is on course to replace Andrew Lansley, the current holder of the post, when the "listening exercise" on NHS reforms ends next month.
The mandarins have concluded that Lansley is a busted flush for one simple reason: the coalition will never be able to sell its NHS reforms as long as he remains in office.
Over the cheap coffee served at their meetings – the days of a whisky in grand clubs are long gone – the permanent secretaries believe Lansley is now a liability as David Cameron and Nick Clegg attempt to strike a difficult balance on the NHS.
On one hand the prime minister and his deputy need to continue with the spirit of the reforms to hand commissioning powers to GPs. On the other hand Cameron and Clegg have to show that real and substantive changes are being introduced to the reforms.
While relations among coalition ministers are tense ahead of Thursday's AV referendum, the interests of Cameron and Clegg on the NHS are combining, though for different reasons:
• The deputy prime minister will not be able to persuade Liberal Democrat MPs and peers to vote for the health and social care bill unless he can point to real changes.
The Lib Dems will also need to show they can influence a key and controversial area of government policy as they recover from an expected defeat in Thursday's referendum. The party's ministers have recently come to realise that they are not house guests in a Conservative government. They are joint, though not equal, tenants and can demand changes.
• The prime minister needs to show some contrition and to demonstrate that the NHS reforms have been amended. This is because Andrew Cooper, his director of strategy who is a distinguished pollster, has made clear that he will risk heading into the next general election with poor poll numbers on health unless he acts. Better to take a hit now, however humiliating, than squander six years of work which reassured voters that the NHS is safe in Tory hands.
This is where Lansley enters the picture. The prime minister is furious with Lansley for failing to build a foundation for the reforms by explaining why it is necessary to transfer commissioning powers from Primary Care Trusts to new GP-led consortia. They will be responsible for 60% of the NHS budget by 2013.
Cameron believes Lansley, who was first appointed to the health post in opposition in 2003, is so close to the subject that he failed to understand the need to explain how a series of challenges meant that reform is essential. These are: a tough budget settlement, compared with funding over the last decade when NHS spending rose by up to 5 percentage points above inflation a year; an ageing population; and the need to make £20bn of savings over four years inherited from Labour.
So the mandarins believe that removing Lansley – and probably his Lib Dem ministerial colleague Paul Burstow as well – will be the best way to demonstrate that the "listening exercise" is real. Michael Crick speculated in a blog last week that Lansley could switch jobs with Philip Hammond, the transport secretary. But Lansley told the RCN last month that he would not do any other job in cabinet.
This is where Dorrell enters the picture. He is currently chairman of the commons health select committee which concluded in a recent report that the GP-led consortia should be widened to include representatives of nurses, hospital doctors and public health experts. This is what Cameron told the Andrew Marr Show on Sunday of the "listening exercise":
I've been...going to hospitals quite quietly, no fanfare, sitting in a room with doctors and nurses and midwives and others, and managers, and asking them what they think. And some very clear messages are coming back. They like the basics of the reform, but they've got some clear pointers about hospital doctors having greater involvement in these things and I hope we'll be able to satisfy those demands and bring together.
So Cameron has warmed to Dorrell's ideas. Whether the prime minister will reward him with a cabinet post is probably not as clear as the mandarins think. If Lansley leaves the cabinet he might be tempted to point out that he was keen to explain his reforms which were included in the Tory manifesto. He was, however, blocked by Andy Coulson who feared unsettling voters on the NHS ahead of the election.