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NHS for Sale

Myths, Lies & Deception

The Merlin Press Ltd

Setting the scene

I don't know how much any of you realise that with the Lansley act we pretty much gave away control of the NHS, which means that the thing that most people talk about in terms of health [the NHS] ... we have some important strategic mechanisms but we don't really have day-to-day control.

Jane Ellison MP, Tory public health minister, June 2014

It's hard to believe, but it was not so long ago that the Conservative Party was saying – 'We'll cut the deficit, not the NHS'. Cameron promised there would be no more 'top-down reorganisation' of the NHS and pledged to halt further closures of Accident & Emergency and maternity units. Before the election of 2010 Conservatives were touring the country challenging Labour's record on the NHS, promising year by year increases in NHS spending in real terms.

All of those promises were worthless. The Tories – kept in office by servile Liberal Democrats – have cut public spending, but they have not, as promised, cut the deficit. Indeed even stiffer cutbacks to public sector budgets are required in the next parliament. They have effectively frozen NHS spending, with increases only microscopically higher than inflation, in the meanest five years for funding increases since the NHS was established in 1948.

This funding squeeze has also ensured that the 'moratorium' on closures of A&E and maternity units so proudly announced by Andrew Lansley in the summer of 2010 had become ancient history by the autumn of the same year. The Daily Telegraph now calculates that some 66 A&E and maternity units have been closed or downgraded since 2010, or are still under threat.

To make matters worse Cameron's government has forced through the biggest top-down reorganisation in the history of the NHS, with a piece of legislation longer and more complex than the 1946 Act that took hospitals into public ownership and established the NHS as a ground-breaking, integrated public service free to all at point of use, and funded from general taxation.

Eviscerating the NHS

Health Secretary Andrew Lansley's White Paper 'Liberating the NHS', published in July 2010, tore up both Tory and Lib Dem manifesto promises and set out plans for the wholesale top-down reorganisation of the NHS. It was followed swiftly by the Health and Social Care Bill, which eventually received the Royal Assent in 2012 and took effect from April 2013.

The Tories' own verdict on the legislation shifted from uncritical support for Lansley's massive and complex 400-page Bill, to uncertainty mixed with dogged determination to force it through during the brief 'listening exercise' in the spring and summer of 2011, which changed little of substance. By February 2012 David Cameron had to deny stubborn rumours that he and other leading Tories wanted Andrew Lansley 'taken out and shot' for his handling of the Bill.

The NHS market

Section 75 of the Bill – later reinforced by powerful regulations implemented on the eve of the Act coming into force – set out far-reaching requirements for Clinical Commissioning Groups (CCGs) to put services out to competitive tender. The foundation trust regulator, Monitor, was given wide new powers to regulate the NHS as a whole and, in the amended Bill, to enforce both competition and integration of services.

The competition rules brought completely new players into the regime of competition in the NHS: the Competition Commission and the Office of Fair Trading, both since superseded by the Competition and Markets Authority, began ruling on mergers of trusts, and obstructing collaboration between trusts to improve patient care – on the grounds that it impeded competition.

EU competition law has also become a factor, with its insistence on a so-called 'right to provide' which allows companies to force the opening up of public services to competition. More recently the controversial Transatlantic Trade and Investment Partnership – being negotiated between the EU and the US administration, with full support from the British government, and leading members of the Parliamentary Labour Party – has also become a potential factor. It may create major obstacles to bringing privatised services back into public ownership and control.

Labour's opposition to Lansley's Health and Social Care Bill was weak at first. The party mounted no significant campaign outside Parliament. The unions, following suit, were also slow to develop any real campaign. In bizarre fashion the most influential early opposition to Lansley's Bill came from the Tories' coalition partners, in particular from LibDem rank-and-file party members. At their spring conference in 2011 they were manoeuvred out of a vote that could have overturned Liberal Democrat support for the Bill.

The LibDem reservations were enough to force Cameron into a highly unorthodox 'pause' in the process of legislation in late spring and early summer of 2011. The tame former GP leader Professor Steve Field was brought in to head up an NHS Future Forum in a 'listening exercise' which managed to avoid listening to any significant numbers of the general public or campaigners. After the 'pause' it was back to business as usual. The huge and complex Bill, barely altered, ground on through the Commons, where it seems that among the many Tories who voted for it without understanding it was Jeremy Hunt, later to be named as Lansley's successor as Health Secretary.

GPs reject Lansley plan

One group who remained unconvinced from beginning to end were GPs – whose main voice challenging the Bill was not the docile, ambivalent BMA but the Royal College of General Practitioners. Each RCGP poll showed a large majority of those allegedly empowered by the Bill declaring their opposition to it. Early in 2012, recognising this huge credibility gap, Lansley issued a letter to all GPs, which appeared to reassure them that – contrary to all but ministers' reading of the Bill – there would be no requirement on CCGs to privatise or put services out to tender (see Chapter 4). It was only at this stage that Labour – with Andy Burnham now leading the way as shadow health secretary – began to wage a belated, but largely inward-looking campaign against the Act. The TUC unions threw resources into a big, lively but again belated rally in Westminster Central Hall, in March 2012, but it was too little, too late.

The LibDem spring conference in 2012 saw the definitive collapse of any real opposition as another critical motion was blocked by party leaders, terrified that a breach in the coalition would trigger an early election. Shirley Williams, the party's proclaimed standard-bearer, meekly accepted Tory assurances and threw in the towel, giving her support for the Bill, thus ensuring it passed the Lords on the strength of LibDem votes. LibDem votes also carried the controversial Regulations that gave real teeth to Section 75 of the Act. Among other things the Regulations set out the few, wholly exceptional circumstances in which CCGs might be excused from putting services out to tender.

The effects of the Health and Social Care Act

The consequences of this wholesale reorganisation of the National Health Service via the Health and Social Care Act are already starting to make themselves felt. Organisational upheaval, the fragmentation of services and organisations due to new requirements for services to be put out to tender, and the underlying, worsening financial squeeze on the NHS (driven by the Cameron government's commitment to austerity and cuts in public spending until at least 2021) are combining to push the system ever further into crisis.

There are indications that even the Tories themselves, having pushed the Act through, are now beginning to view this huge piece of complex legislation as a major mistake, with David Cameron reportedly admitting he did not know what it entailed, even when he took personal charge of getting it onto the statute book. Other Tories have been equally baffled or critical of the Act and its outcome. Tory public health minister Jane Ellison (as quoted above) was recorded in June 2014 telling a Tory Reform Group meeting that as a result of the Act the government had effectively given away day-to-day control of the NHS. Clause 1 of the Act was the key factor in giving away control, abolishing as it did the duty of the Secretary of State to provide universal and comprehensive services in England.

Section 75 of the Act, backed up by wide-ranging additional regulations, focuses on creating a competitive market in health services, and increasingly the contracts offered up are being won by the private sector. Vital cash from NHS budgets is flowing out of the NHS into private companies seeking profits from health care. While the private sector revels in its rising revenues, the money they win in contracts is taken from the limited NHS budget, leaving less for the NHS trusts and services which remain the bedrock and only option for many key services which the private sector sees as risky or unprofitable.

Emergency services and care of the most seriously ill suffer cuts, while managers have to focus their attention on tenders offering the easiest elective and community services to profit-hungry companies seeking to slice out the safest returns. NHS management time and resources which should be concentrated on patient care are increasingly being squandered on complex contractual arrangements and 'commercial' activity, supervised by the regulator Monitor (with its additional powers to enforce competition) and even by the newly-formed Competition and Markets Authority.

NHS England

What has all this done to our NHS? One of the first casualties has been the accountability of the service. The Commons Public Administration Select Committee has raised searching questions over the level of accountability, if any, of the new, all-powerful national commissioning board, known as NHS England, which controls some £95.6bn of NHS funds. Asked what the system of accountability was between the Department of Health and NHS England, the civil servant responsible gave the committee a bafflingly convoluted 300-word answer. At the end of 2014, Bernard Jenkin, Tory chair of the Committee questioned the complex relationship that the Act has established between the Department of Health and NHS England, the 'arm's length' commissioning board.

Vast amounts of money are involved here, £95.6bn in the case of NHS England alone, and it is simply not acceptable that there is no clarity or clear accountability for that kind of public expenditure ... The architecture is not meant to be reminiscent of the film The Matrix where doors open on virtual worlds which are insulated from reality and hidden from the public and from those meant to be accountable for them.

NHS England itself is now headed by Simon Stevens, a onetime political advisor to Tony Blair, who then spent ten years in the private sector, working for giant US health insurance corporation UnitedHealth, (where he became Executive Vice President). It is chaired by Professor Sir Malcolm Grant, former provost at University College, London, who has complained of 'meddling' by government ministers in the running of the NHS.

Level playing fields?

NHS England's plans to cut the 'minimum practice income guarantee' which supports GP services in deprived and rural areas produced an angry reaction from hard-pressed GPs who warned it could trigger substantial numbers of practice closures. Amid street protests led by GPs in East London, NHS England had to retreat, shelving the problem for at least two years. NHS England has also been found in the High Court to have repeatedly departed from the provisions of the HSC Act by imposing changes in primary care services without any mechanism to consult or engage with patients and public in the affected localities.

In October 2014 further fears of NHS England incompetence were provoked by new plans to stop commissioning specialist renal services i.e. dialysis and transplants. NHSE announced a minimal six-week 'consultation' spanning the Christmas period. Thereafter (from April 2015) they looked forward to dumping the problem onto ill-prepared Clinical Commissioning Groups. This move has been roundly condemned by the British Kidney Patient Association as endangering access to care and potentially putting lives at risk.

There is also widespread and growing chaos at the local level. Inexperienced Clinical Commissioning Groups, pressed by the Health and Social Care Act and associated regulations, and often led by a handful of maverick GPs or, from behind the scenes, by management consultants, are drawing up ever more far-reaching and irresponsible plans for contracting out services. Some are doing this regardless of the potential impact on local NHS trusts if the contracts – and the funding – are won by private sector bids.

Already some CCGs are awarding contracts to the private sector for Musculoskeletal (MSK) services, and these potentially destabilise local NHS trauma services and therefore the viability of A&E departments. Elsewhere a variety of other services – care of older people, cancer care, end of life care, and a range of community health services such as community beds, specialist community nursing, community therapy, podiatry, early supported discharge and intermediate care – are being put out to tender, with a combined value of billions over five to ten years. If private sector firms succeed in winning these contracts, they will undermine the viability of dozens of local trusts which provide other vital services to their local communities.

It's all getting out of hand, but it's important to remember that the new drive towards privatisation and fragmentation is not the only aspect of government policy that threatens the future of the NHS. The crisis in the NHS dates back to the great 2008-9 banking crash which heralded the end of a record ten successive years of investment in the NHS from 2000 to 2010, and which has taken five years to come fully to the surface. It's a crisis which combines the impact of the unprecedented five-year spending freeze (which is driving indebted hospital trusts to rationalise and cut back local services to save money), with a growing fragmentation and dislocation of the newly-reorganised system. The fragmentation certainly began under Tony Blair's Labour government, but it has been vastly accelerated and deepened by the impact of the Health and Social Care Act.

The long freeze

The driving force in this latest crisis has been the Tory-led coalition government, which has cynically seized upon the pretext of the economic dislocation triggered by the banking crash as justification for imposing its neoliberal austerity policies on the NHS. Of course Cameron and his ministers energetically deny this, and profess their total commitment to the NHS and its values. When challenged on the inadequate level of funding, along with lengthening waiting times and queues for treatment and the rising debts of local NHS and foundation trusts, David Cameron insists the government has put 'an extra £12.5bn' into the NHS since it took office. Over five years, that works out roughly £2.5bn per year – just a fraction above inflation, but increasingly falling short of the rising costs of meeting the health needs of a growing population.

Tory chancellor George Osborne has planned for this freeze to continue at least until 2021. However, almost all experts not on the government payroll are agreed that this would result in a massive potential £30bn gap between NHS income and costs of delivering services. Despite the Tory rhetoric before and since, the election of 2010 brought not only a change of government, but the start of a new era of frozen real terms budgets, which will have risen by a total of just 0.1 per cent above general inflation in five years.

The same period has seen a significant rise in the total population, and in numbers of older people, who tend to make greater demands on the NHS. The Institute for Fiscal Studies estimates that if the spending freeze is maintained it could cut age-related per capita spending on the NHS by 9.1 per cent from 2010 to 2019. Other cost pressures, including the bill for new drugs and techniques, have continued to mount up. Estimates of the rising cost pressures vary – but it is commonly assumed that increases in spending above inflation of 3-4 per cent each year are needed to maintain and grow services and maintain performance.

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Excerpted from NHS for Sale by Jacky Davis, John Lister, David Wrigley. Copyright © 2015 Tamasin Cave, Jacky Davis, Paul Evans, John Lister, Martin McKee, Harry Smith, David Wrigley. Excerpted by permission of The Merlin Press Ltd.
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