Blueprint for a People's Health Service

We are entering a new era for public sector reform. Labour's approach - more money and more central control - has reached its limits. 10 years of investment have helped improve our NHS from the desperate state of 1997, after decades of Conservative neglect, but it still isn't good enough.

Britain is, literally, the sick man of Europe. Cancer survival is below the European average; we have the worst outcomes for stroke patients in western Europe; and a baby born in the poorest ward of Sheffield will die 14 years before a baby born in a wealthy ward. The centralised system has failed for the people who need it most.

The big question for us all is how we can improve our nation's healthcare and even-out these gross inequalities. Even if there were billions of pounds to pour in - and with the current state of public finances, there aren't - the centralised, target-driven system would not deliver.

The NHS needs to be reinvented for the 21st century, built from the people up, not from Whitehall down. Of course, it must always remain true to its founding principles: free at the point of use, and accessible to all on the basis of need, not income. But I want people to take more control both of the management of our NHS, and their own healthcare. In essence, I want a People's Health Service.

Real improvement requires a new approach, based on personal empowerment, local control, and fairness. This is a liberal solution, which helps the poorest by empowering everyone.

A People's NHS would replace top-down targets with personal entitlements to high-quality care. To drive the NHS to deliver, everyone should have the right to private treatment, paid for by the NHS, if the waiting time is not met. In Denmark, this works to reinforce the public health system, not undermine it.

To give patients more control over their care, I want to extend direct payments and personal budgets - so people with long-term and chronic conditions choose what care they need. This system has operated for social care in some areas for many years, and should be extended and widened as much as possible, in particular for mental health patients. Their treatment in today's NHS is a national disgrace: there aren't even targets for mental health treatment, let alone entitlements, so people wait months or years, often on incapacity benefit, for help.

If we put patients at the centre of services, we really can reinvigorate the health service. But they must get reliable, easily accessible information, so I would develop a network of patient advocates to provide information, guidance and support to those who need it.

And I want to see a dramatic shift in our care for the elderly. The growing needs of older people in Britain will turn into a crisis if we do not tackle them now. I'm committed to an extra investment of £2bn a year to create shared responsibility between the citizen and the state for long-term personal care. Our proposals, modelled on Derek Wanless' ideas, would introduce a Care Guarantee, entitling elderly people to a personal care payment based on need not the ability to pay, and setting out the entitlements of the patient and their carers.

We would guarantee older people payment to cover the great majority of care they need. Individuals could then top-up their care package by making private contributions which would be matched by the state - pound for pound - until the maximum benchmark is reached. People on low incomes would have the additional contributions made through the benefits system, so no one would go short. Those who currently receive care for free would, of course, continue to do so. By having a universal payment and slashing existing charges, this system would help many more people to take up care or improve what they're getting.

On top of daily control of their care, people must have input into the local management and decisions of our health service. Directly elected local health boards would put people in charge via the ballot box. Communities should have the right to raise, or lower, a local income tax to suit the needs of their health service. And they could choose to have the council commissioning services, too, if they preferred.

By reforming the NHS from the bottom up, not the top down, we can deliver a health service to celebrate for generations to come.