The excessive costs of NHS privatisation

20141123_231110In my previous post on the NHS pay dispute I highlighted the need to broaden our struggles against poverty pay to include the ongoing part-privatisation of the NHS, enacted by successive governments over the past three decades, and exacerbated by the current coalition. I had originally hoped to cover both pay and privatisation in one piece, as they are intrinsically linked and symptomatic of the same neoliberal austerity agenda undermining our health care system. Unfortunately, this was too mammoth a task to complete in a length that was accessible for the blog format; so I’ve split them into two.

Jeremy Hunt maintains that we’re spending too much on the NHS and we can’t afford to give staff even the less than 1% cost of living rise recommended by the government’s independent review board; and that to find the money for a rise within the NHS budget would cost the jobs of 15,000 nurses. This argument is fairly spurious as the government can always find more money to increase budgets for expenditures it prioritises; like MPs own massive pay rise for example. Even if we act within the current NHS budget constraints, the argument that there’s no money to pay for staff falls flat.

We spend about 8% of our GDP on our health service; this is far lower than comparable countries such as Germany (10.5%), France (12.2%) and the USA (16%); and with far better results (as recently highlighted in an international study, ranking the NHS as the best in the world). Even within this internationally relatively low figure there are colossal amounts of money wasted. This is mainly by artificially forcing the NHS to work like a market (especially the biding process for services); the overlapping and unnecessary bureaucracy; the money ferreted out to private companies – either through profits for providing health services or the extortionate rent on rip off PFI contracts; and the excessive pay of chief executives and managers.

The worst of these is the wastage in forcing the NHS to work like a market. Hospitals are turned into separate trusts and made to act like corporations, bidding against one another and private health providers for contracts to run services– through a hugely complicated and fragmented system.  Governments refuse to collect accurate statistics on just how much of a massive drain on NHS resources this is, it has been estimated to cost as much as £30 billion a year by a group of rebel Lib Dems. It is most likely to be around £10 billion a year. This is nearly 10% of the NHS’ entire £108.9 billion budget. Apparently there’s spare money to pay for ideological vanity projects like this, but not for staff.

It has been a long process over the last three decades to get us to this point; but coalition reforms have greatly exacerbated it. The 2012 Health and Social Care act (that massive top down reorganisation Cameron promised he wouldn’t do) forces almost all services to be put out to tender for private companies to bid on. Since 2012 70% of contracts have been won by the private sector. As time goes on and more and more contracts come up for renewal, and get exposed to biding by private companies, this is going to have an ever increasing impact. These private health companies then extract a profit from running the services. This is public money collected as taxes being paid into private hands. Before this money would have been put back into the system, now it’s lining the pockets of these private companies and their shareholders.

Private Finance Initiatives (PFI) allow private companies to build hospitals (and other infrastructure) and rent them back to us. This doesn’t sound so ominous, but for some reason the terms of the contracts are usually much to the detriment of the tax payer – locking hospitals into 30-60 year contracts that will see them pay back the price of the hospital many times over.  The perilous situation our NHS is in, is extremely complicated. But one thing is clear; these reforms are pushing an already stretched system to the point of collapse.

As mentioned early, the NHS was ranked the number one health care system in an international league table. The greater the influence of a market system in each of the countries in the study, the worse it performed. The US has the most fully developed market model and was ranked last on the table, despite spending the most on its health care. The US spends around £5,017 per person on health, compared to just £2,008 here in the UK, and with considerably worse results. Yet this seems to be the model our government wants to pursue.  Purely on the basis of cost effectiveness and value for money, privatisation is a massive failure; and that’s without considering the moral implications and its impacts on patient care and people’s lives.

That is why as Greens we will continue to support all NHS staff in their struggles for a decent wage, and any and all efforts to resist privatisation (such as the NHS reinstatement bill http://www.nhsbill2015.org/ ); which diverts funds desperately needed for health care into the coffers of private companies. We believe the profit principle has no place in our Health Service, and all examples of where private companies have been given greater control have led to reduced standards of care and scandal after scandal. Just look at the flagship privatisation of Hinchingbrooke completely run by private health company Circle. Quality of care, hygiene and patient safety are all sacrificed for profit. There is another way. A properly funded health service, available to all, free at the point of use – paid for from progressive taxation. By creating a fairer, more equal and more sustainable society that tackles the causes of sickness (such as pollution and lack of access to nutrients as a result of poverty) instead of just the symptoms, and by ending the needlessly fragmentation internal market, we can significantly reduce the cost of healthcare.


3 thoughts on “The excessive costs of NHS privatisation

  1. Pingback: The #PeoplesMarch4NHS #Bristol #NHS | A Green Trade Unionist - In Bristol

  2. Pingback: In search of #SocialJustice: From #LibDem to #Green | A Green Trade Unionist - In Bristol

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