TONY BLAIR has received a disturbing report about modernisation of the NHS.

As always with NHS crises, this is followed by a cry for more resources and reassuring noises that all will be well - eventually.

The difficulty in reforming the health service lies in its grip on our memory of its very great virtues. It was a pioneering attempt in postwar Britain to provide health services free at the point of use, promising to eradicate inequalities in health outcomes and regional anomalies in health provision. It was and remains the one act of nationalisation for which the 1945 Labour Government is fondly remembered.

Yet that is its very problem. It is a political totem, a sacred cow - untouchable and unalterable.

But the NHS does need real and deep reform - not timid experiments such as internal markets and fundholding GPs, or primary care trusts and foundation hospitals. Nor are greater resources ever going to suffice, even if we attain EU levels of health expenditure as a proportion of national income.

Wedded to the past, we have ended up with a service free at the point of access, but not always available - somewhat like supermarkets in the old Soviet Union with empty shelves for free goods. If you are old or infirm, if you require special mental or physical care, if you have cancer or need a new hip, chances are that you are probably on a waiting list.

Yes it is cheap, compared with the continental models, as some politicians like to point out - but then, we're not spending money on all those patients on waiting lists.

Worse still, the NHS does not do justice to poorer patients. Complaints about postcode inequalities persist. Health outcomes are still widely different across income, classes and regions.

This is because the system allocates resources in response to who shouts the loudest. As a result, the poor suffer most from our underperforming NHS.

Centralisation of decision making is the big problem. Any Prime Minister accused of privatising the NHS soon runs away from radical reform. No Secretary of State for Health wants to give up power over resources, and if he did, his Chancellor of the Exchequer would stop him.

So even when there is a bit of devolution of power, a small degree of freedom for the local hospital or GP, there follow targets and priorities and monitoring bodies making quite sure that the freedom is not being fully used.

The system has ended up with patients having no freedom to shop around for the best treatment, no choice but to wait. Doctors and nurses, consultants and even nonmedical staff feel overworked and exploited. The latest boost in expenditure has cost 27 per cent and yielded only a one per cent increase in NHS capacity. The rest has gone in higher pay - and not for the lowest paid either.

We cannot - should not - go on like this. We need a system paid for out of taxation but based on social insurance as France, Denmark, Germany and Sweden have. It is possible to give patients choice once they have a social insurance contract. And we can protect the idea of free core health services, with Parliament defining what that core should encompass.

But patients need a sense of ownership and of entitlement which they lack at present. They need to be given incentives to take up healthy practices which will ease the burden on the NHS. They need to be made aware of the price of treatments they receive - even if their insurance pays it.

Hospitals and Primary Care Trusts in their turn should be set free and mutually run by patients and NHS professionals. They could lease the buildings and equipment from the Government. Then they would cater for local needs as they see them - and not as dictated by some bureaucrat in Whitehall.

Prime Minister, do yourself and all of us a favour. Give up controlling the NHS. Give it back to the people.