Much has rightly been said in recent weeks about the spectre of a trade deal with America and Donald Trump after Brexit, which may or may not include our NHS. The truth is that the health service in this country has already been opened to marketisation – giving American companies a foothold.
Privatisation exists in many forms. It’s important not to confuse ‘privatised services’ with ‘charged for’ services: a service which is privately run can still be provided free to patients, while some NHS services – an increasing number, in fact – are actually charged for. In addition, NHS services are increasingly rationed, so more and more patients now pay privately for treatment that was previously freely available on the NHS.
Privatisation is incredibly wasteful and expensive. For example, the Private Finance Initiative (PFI) payback for new hospitals will amount to £80 billion on just £11 billion of contracts. There is no guarantee that in the future that these hospitals will be owned by the NHS.
But privatisation runs far deeper than new hospitals. Private sector companies own – and get NHS payments for – many of the expensive scanners and other healthcare technology we all use. NHS IT services, including patient records, as well as administrative services are also frequently provided by the private sector.
Recent decades have seen the rise of management consultants in our health service – who receive huge payments but have been shown to deliver little in terms of results. De-skilling the core management workforce of the NHS has placed heavy reliance on external consultancies who are adept at writing proposals that make themselves indispensable.
Interestingly – but frustratingly – there are no reliable, publicly available figures for the total cost of privatisation. Individual examples, however, can be quite eye-watering. In South East London for instance, a pathology contract due for renewal worth a staggering £2.25 billion will go to a private company at a scale and length of time not seen before.
We can say that the costs of the internal market in our health service, as expanded by the 2012 Health & Social Care Act, are estimated by the Commons Health Select Committee to be £5-10 billion annually.–
Relying on profit making companies to deliver NHS services is risky. Recent years have provided plenty of notable examples. Carillion famously went bust in January 2018 with £900 million in debt. They left staff pension funds with a £587 million hole and 20,000 staff at risk. They also left £1.7 billion contracts and two hospitals half-built.
In 2015 and 2016 Leicester and Nottingham Hospital trusts each had to end their cleaning contracts with Interserve and Carillion due to health and safety hazards. Their hospitals were in dire states of cleanliness, including dirty wards, broken-down lifts, failure to provide enough sheets for patients, nursing staff forced to make up for the lack of cleaners and rats seen in hospital kitchens.
Enforced tendering has prioritised finance and led to failed contracts, reduced collaboration and wasted money. One recent example of this was seen in Staffordshire, where a £687 million tender to privatise cancer services had to be abandoned after a process which cost the four local CCGs £840,000. In Cambridgeshire a five-year, £800 million outsourcing contract for care of the elderly had to be scrapped after eight months because it wasn’t “financially sustainable”.
In 2012 a whole hospital – Hinchingbrooke – was given to Circle after they promised what the Public Accounts Committee later called an “unrealistic” and “unprecedented” level of savings. In the end, the deal collapsed and Circle gave the hospital back only three years later. Private companies can and do walk away when the going gets tough, leaving the NHS to pick up the pieces, and foot the bill.
They are also a threat to the workforce. Since the 1980s catering, cleaning, security and portering in our health service has often been the domain of private companies – and this separation was ramped up with the introduction of PFI from the 1990s onwards.
However, for purely financial reasons, including VAT avoidance, we see NHS trusts taking this separation to the next level by setting up wholly-owned subsidiary companies. This is disastrous for the mainly low-paid staff affected, who are are transferred from the NHS to a private company without their consent and inevitably suffer inferior terms and conditions, while risking the loss of their NHS pension. The obvious message sent to staff is that they don’t belong to the core NHS team – they are peripheral and expendable.
There are also serious ethical concerns about private companies involved in the NHS, many of which are suffering from a sense of entitlement. Virgin Care famously settled out of court with the NHS in November 2017 after their contracts for community children’s services were not renewed in Surrey. The NHS was forced to pay £2m of taxpayer’s money or risk a heftier court case.
Contracts for services to our most vulnerable – children in need of safeguarding, people with serious mental ill health and disabled children and adults – are increasingly going to private companies like Virgin Care. In fact, the majority of community tenders are going to non-NHS companies like Virgin, including mental health, learning disability and child safeguarding and disability. Of the £7.2 billion tendered in 2016/17, 43% went to the private sector, 21% not-for-profit and only 35% to the NHS – these are hugely concerning numbers.
The Extent of Privatisation
There is still much to take heart from. Thanks to the stoic efforts of NHS campaigners around the country, only 7% of the NHS has been properly privatised. (Although according to David Rowland, director of the Centre for Health and the Public Interest, that figure jumps to 18% if more honest costings are used.)
From its inception, the landscape of the NHS has changed considerably in terms of the scope of its provision. Aneurin Bevan introduced the NHS in 1948 as a truly comprehensive service – but it hasn’t worked like this for years. Pharmacies and opticians, for instance, have long been provided by outside companies and eligibility criteria for these services must be met by the individual patient or an upfront fee is applicable.
At the moment around 30% of private hospital income comes from the NHS utilising their services due to a lack of capacity in the system, and 50% of patients to private hospitals are NHS referrals. It would seem that if large scale privatisation is to happen, this is how it will come about. Not with pomp and ceremony but silently and by default.
This is the what the gradual erosion of our public system looks like. Patients who once received treatments that were available on the NHS – such as so-called treatments ‘of limited value’ (e.g., for heavy periods) – are now prey to private providers and forced to pay. There are also tighter eligibility criteria. People are not able to have cataract operations, for instance, until their sight is very limited, or a hip replacement until they are in severe pain.
This begins to create a two-tier system where those who can pay get preferential treatment. The private sector is poised to mop up the most profitable procedures. It should not be forgotten in all of this that there is a significant financial link between many Conservative ministers and private healthcare interests.
So, what does the future hold? If the Conservatives really were ‘the party of the NHS’ as they are now rebranding themselves in a desperate attempt to win votes, they would commit to reversing or at the very least halting their damaging policy of privatisation. Instead they are telling their candidates not to sign NHS pledges in this election.
In the brave new post-Brexit world, we must rely on politicians to treat our NHS sensitively in a way that safeguards it for future generations. In the hands of a Conservative government its future is anything but assured.
This article is by Samantha Wathen, Keep Our NHS Public’s Press Officer, and was originally published in Tribune Magazine on 9 November 2019.