Socialist Worker

Privatisation and cuts wreck the NHS

Blair’s supporters argue that he has boldly improved the health service. John Lister disagrees and looks at the real legacy of the last ten years

Issue No. 2050

Tony Blair’s claim that we had just “24 hours to save the NHS” was one of the finishing touches to New Labour’s crushing victory over the discredited Tory government in 1997.

Now as Blair steps down his supporters are rallying to the notion that he did save the NHS – despite driving through far more profound and wide-reaching privatisation than even Margaret Thatcher dreamed of.

Blair was the first prime minister to concede that spending on the NHS had to be substantially increased to reverse decades of underfunding. That was a welcome change.

The decision to more than double NHS spending, to recruit more staff and open more facilities was the key to the second major change for which Blair can claim credit – the reduction in waiting lists since 2000.

The problem is that neither Blair, nor his advisers, are willing to admit that it was the old fashioned expansion of public sector capacity that improved services.

Instead they claim that the transformation has been brought about by a series of “reforms”, and by the dramatic expansion of private sector facilities delivering NHS-funded care.

The NHS managers’ magazine, the Health Service Journal (HSJ), in a editorial eulogy to Blair, claims that, “The reduction of waiting lists has gone far beyond what was envisaged in 1997, driven by competition.”

But the reduction was in fact driven by central targets, combined with increased resources.

Of the ten million people who were admitted as in-patients to hospital in England in 2005-6, more than six million required medical treatment.

This is largely unavailable from the private sector, which centres on profitable, low risk surgical procedures. Both foundation hospitals and private sector treatment centres depend for their “competitive” edge on the complex and controversial system of “payment by results”.

This means that NHS trusts are now paid for each item of treatment they provide on a fixed tariff, ensuring that every patient who opts out takes the money with them out of the NHS.

Private providers, however, are exempt from payment by results. They get a privileged rate, long term contracts, and help with start up costs.

As the private sector carves out an ever larger share of the NHS budget, one conspicuous failure is not mentioned – the Private Finance Initiative (PFI).

According to the Commons Health Committee, PFI has racked up the cost of new

hospitals to unaffordable heights and delivered spectacularly poor value for money for the NHS. But it has handed huge windfall profits to PFI companies.

These large sums are being siphoned out of the NHS budget, which also faces the rising costs of administering an unnecessarily complex market system.

With increasing privatisation of primary care, diagnostic services and other sectors of the NHS, it is striking that one of Blair’s final interventions was to bless the appointment of a top boss from a scandal-ridden US private health company to the department of health.

Blair is passing on to Gordon Brown the task of forcing through a highly controversial round of closures of hospital services.

This is driven by the need to slim down public sector provision to make room for a significant and viable new private sector that nobody but Blair wanted.

Maybe Blair did “save the NHS”. But as the delighted shareholders of private treatment centres, hospitals and PFI consortia toast his legacy, health workers are preparing for action to prevent a substantial pay cut.

The question must be, saved it for whom?

John Lister is the information director for London Health Emergency.

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