Socialist Worker

Blair restarts his war at home

A new wave of NHS ‘reform’ could close hospitals, warns John Lister

Issue No. 1952

John Lister

John Lister

Despite Tony Blair’s reduced majority, ministers seem determined to step up the pace of “modernising” reforms in the NHS — with wholesale privatisation of healthcare and wider “freedoms” for foundation hospitals.

The tone was set by health secretary Patricia Hewitt’s hardline speech to NHS employers on Friday of last week. Just three days after taking office pledging to act as a “listening health secretary”, she has closed her ears to critics and announced a massive expansion of spending on private sector “treatment centres” to carry out routine operations.

The £3 billion extra spending over the next five years will buy 1.7 million more operations, effectively doubling the NHS’s use of private hospitals — NHS hospitals have been forbidden to compete for this work.

Private hospitals

By the end of this year, primary care trusts — which hold the NHS purse strings — will have to send at least 10 percent of NHS waiting list operations to private hospitals. Hewitt has set her course to increase this still further, towards a longer term target of 15 percent.

The tax funded expansion of the private sector will have a severe knock-on impact for NHS hospital trusts as they lose the funding for routine waiting list operations.

They will also lose crucial nursing and medical staff, who will increasingly be poached by the growing private treatment centres, leaving frontline NHS services struggling to cope.

NHS hospitals will face a more complex and costly caseload of patients — the people the private sector has no interest in.

The removal of routine “bread and butter” work from the NHS will force up the costs of the services that remain, and undermine the viability of many NHS trusts, which are currently struggling with large deficits.

Some hospitals also face the loss of accreditation to teach doctors and nurses — leading to future skill shortages.

To make matters worse, next year NHS trusts will face the introduction of “payment by results” — a market system that will bring back competition and seriously disrupt NHS hospital finances.

Hewitt is spending billions of pounds of taxpayers’ money on these policies, which have been denounced by health unions and doctors.

And she has warned that any “failing” NHS hospitals — those that lose out in this new, unfair competition with the private sector — will be closed down.

New laws announced in the queen’s speech are expected to include measures to widen the powers of foundation hospitals and expand private provision of GP services.

The legislation is expected to relax limits on foundation hospital trusts’ rights to borrow from the private sector, which were originally imposed at Gordon Brown’s insistence.

These and other foundation hospital powers were drastically restricted as ministers battled to force the legislation setting up foundation hospitals through the Commons. Even so, 68 Labour MPs rebelled and the government scraped through with a majority of just 17.

Brown is concerned that foundations could run up big debts. This happened in New Zealand, where “crown health enterprises”—equivalent to foundation hospitals—were allowed unrestricted borrowing from the private sector in the early 1990s.

They ran up massive debts before being brought back under government control. The bills are still being paid off.


Concerns over the future direction of foundation trusts will be heightened by recent reports in the Health Service Journal revealing that Monitor, the “independent regulator” charged with overseeing foundation trusts, has itself been largely privatised.

Two thirds of Monitor’s £15.5m first year budget has been spent on hiring private management consultants from the US, flying in whizz-kids from the McKinsey consulting firm — including Chelsea Clinton.

The US has the most expensive, least inclusive, most privatised and most bureaucratic healthcare system in the world, where $1 out of every $3 of health spending goes on administration—$400 billion a year.

What lessons does Ms Hewitt think McKinsey has got to teach the NHS?

John Lister is information director of London Health Emergency

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Sat 21 May 2005, 00:00 BST
Issue No. 1952
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