The scale of the NHS Logistics privatisation reflects Labour’s wider ambitions to entrench the market in the health service. These plans are driving the NHS into crisis.
The scheme for NHS Logistics alone will see 1,650 jobs and a quarter of the NHS’s non-wage spending handed over a private corporation.
The government claims that privatisation will lead to savings and greater efficiency.
In fact privatisation and the creation of an internal market in the health service are the key to understanding why the NHS is in crisis.
Money invested in healthcare pours out into the hands of shareholders, or is wasted on private sector consultants and “transaction costs”.
Over 15 percent of the NHS budget is swallowed up in administrative costs compared to 4 percent before the market reforms.
Hospital building carried out through the Private Finance Initiative and the creation of independent sector treatment centres drain away resources.
Health secretary Patricia Hewitt said this week that there was no limit to the amount of private sector involvement in the NHS.
Huge financial deficits accumulated by NHS Trusts have led to bed cuts, department closures and threats to shut entire hospitals.
Over 20,000 jobs have been lost since the start of the year. Campaign group Health Emergency accused the government of planning “the biggest wave of hospital cuts and closures since the infamous ‘Lawson Cuts’ more than two decades ago”.
Geoff Martin, campaigns officer of Health Emergency, said, “The cuts programme to NHS jobs and services will escalate this autumn as trusts come under heavy duty pressure to balance the books.
“We now know that the £1.2 billion deficit in the NHS can only be squared by hitting frontline services hard.”
Currently 60 hospital departments are under threat as part of a sweeping “reconfiguration” of NHS services.
The closures are causing problems for New Labour. Secret meetings between Hewitt and Labour chair Hazel Blears led to the production of “heat maps” showing where cuts are causing public outrage.
Opposition parties have accused the government of avoiding cuts in marginal Labour seats.
In Rochdale, a marginal Liberal Democrat constituency, the local accident and emergency unit is being threatened with closure.
Amna Mir, a Labour Party member in Rochdale, was planning to attend the Time To Go demonstration in Manchester this Saturday—to demand that money is spent on health rather than warfare.
She said, “I have five children who all do judo - so I need to have a local emergency department in case of any accidents. I am diabetic and have problems myself.
“If they close Rochdale’s accident and emergency ward we would have to travel to Bury or Oldham, which is too far to go in an emergency. These cuts will cost lives.”
The GMB union is balloting medical secretaries in Barking, Havering and Redbridge NHS Trust against job cuts.