Patricia Hewitt: 'The stakes are high. If we fail to reform the NHS, the privatisation agenda will take over'

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"This is the toughest job I have ever done and I am loving it," said the Secretary of State for Health as we sat down in her private office at the Department of Health.

She may be accused of being in denial but she clearly meant it. However, before the interview, Patricia Hewitt had a text message to send on her mobile phone.

"I'm sending a message to my son," she said. It was 10.45pm but she was making sure he was awake. "He has his A-levels to prepare for."

The discipline she is applying to the NHS is clearly also employed at home. However, Ms Hewitt's efforts to knock the old monolithic health service into shape may be more daunting.

Last week, as hospitals warned they were being forced to make nurses redundant to cut deficits, Beverley Malone, the general secretary of the Royal College of Nursing (RCN) accused the Health Secretary of using a "scorched earth" policy against the NHS. This week Ms Hewitt will address the RCN at its conference. She will tell the nurses, who are angry at the threat to their jobs, that she has ordered Chris Beasley, the chief nursing officer, to work with Dr Malone in ensuring that most nurses are not sacked but redeployed in nursing at community level.

"I understand why nurses and the RCN are seriously worried when nurses are facing possible redundancy. It's not the thousands of redundancies you read about in the press - most of those are cutting back on agency nurses. By managing down your agency staff and redeploying staff in more efficient ways you can do it without redundancies. Redundancies are horrible and they come as a huge shock after years of enormous growth," she said.

I pressed her, asking whether the RCN leader was right? "I am not going to comment on what Beverley Malone is quoted as saying," she curtly replied. "What I say is I understand the legitimate concern about the changes but that shouldn't overwhelm the enormous improvements that have been made. Just as the Prime Minister was saying about the need for more balance in the media coverage, the unions need to emphasise all the good that is happening at the same time ..."

She is prepared to have a go at the managers of one hospital trust in North Staffordshire who resigned en masse in December leaving the new management to propose massive cuts in staff, including making nurses redundant, to reduce their deficit.

"I was shocked by what I found there," she said. The litany of incompetence included keeping patients in hospital for 11 days for hip replacements when the average in England in the NHS was about five days and "best practice" was even lower thanks to the advances in technology. North Staffordshire was one of the worst examples of old ways leading to huge deficits and drastic staff cuts. "I am quite shocked the board has not seen fit to apologise to the staff, who are faced with consultations on up to 1,000 redundancies. They should not have been put in that position."

I did not dare suggest that some patients might have needed 11 days in hospital after having a hip replaced. The Health Secretary was already marching briskly to point out the future of the NHS was in Dudley. Kenneth Clarke, a former Tory health secretary, used to complain about a wet night in Dudley but now it is shining like a beacon, according to Ms Hewitt. Here, in contrast to North Staffordshire, the local hospital, GPs and nurses have identified 120 patients who together had called on the emergency services 500 times in a year. By providing community nurses to treat illnesses at home, they drastically reduced the number of visits to accident and emergency units and stays in hospital.

In a nutshell, that is what Ms Hewitt wants to see in England and Wales. And it means that the nurses and the patients will have to get used to the idea that before long, wards will be closing because they are redundant.

After years of campaigning against ward closures, Labour MPs are now having to swallow the bitter pill that they can actually be good for patients. Tony Blair, having campaigned in 1997 on the slogan that Britain had "24 hours to save the NHS", is so worried about the consequences of ward closures that he warned last week that his party had to hold its nerve.

How many ward closures will there be? Ms Hewitt, if she knows, is not saying. She said they were being decided at the grass roots. It was a "bottom-up" revolution, not top-down. So, I wondered, how long will the party have to hold its nerve?

She is surprisingly precise. 2008 is the target date for the recovery plan to deliver recognisable improvements. "By the end of 2008 we will have achieved the next target of 18 weeks' maximum waiting from GP referral right through to the operating theatre. By then we will have effectively abolished waiting lists."

But 2008 is also the year in which the big increases in spending on the NHS will end and she will have to bid for more money. Ms Hewitt was adamant that the future for the NHS, providing the reforms were accepted, was going to be secure. She revealed she was bidding for money from Gordon Brown, the Chancellor, to pay for the switch from old district hospitals to an expansion of greater care in the community.

The danger, of which she is keenly aware, is that even supporters of the NHS will see the current cuts as clear evidence that the billions poured into the health service by Mr Brown and Mr Blair have proved that the old tax-based health service cannot deliver. Britain will turn, like the rest of Europe, to some sort of social insurance system.

She believes that the "crunch point" has arrived for the NHS and it is a fight the reformers like herself and Mr Blair must win. Otherwise, the Tories under David Cameron will privatise the health service.

"Already we are seeing a clamour from the right building up in the media, think-tanks and organisations like Doctors for Reform to abandon the NHS as a tax-funded service and move to some combination of social insurance, private insurance or charges. That is the not-very- hidden agenda of the right.

"So the political stakes could hardly be higher, because if we fail to make the improvements and the reforms we set out to make in the NHS then that agenda - which is essentially an agenda of privatisation - is waiting to take over."