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NHS staff continue to do their best, despite the introduction of the internal market |
2008 sees three score years since the
NHS was founded by the post-war Labour government of Attlee and
Bevan. But, Gary Fraser argues, despite both Tory and New
Labour governments assuring us that the NHS is ‘safe in
their hands’, the sixtieth birthday of that great
institution finds it under attack as never before.
This year marks
the sixtieth anniversary of the National Health Service. There is
much cause to celebrate. Universal health care for every man,
woman and child is one of the great political achievements of the
past century. Furthermore, there continues to be widespread
support for the principles of the NHS, namely that it should be
free at the point of use and funded out of general taxation.
However, at a time when people are marking the sixtieth
anniversary of the NHS, it is also important to highlight that
not all is perfect with the NHS. Two decades of neo-liberal
reforms, by both Conservative and Labour governments have
subjected the NHS to privatisation and to internal markets, a
process referred to as ‘marketisation’. Many of these
reforms have taken place bereft of a critical public debate. In
2004, the book ‘NHS Plc’ by Allyson Pollock was
published. Pollock’s book offers detailed research and
analysis regarding the NHS and the impact of neo-liberal reforms.
The conclusions are alarming. The NHS is being subject to
creeping privatisation, which is undermining the quality of care
provided, and the creation of internal markets are destroying the
public service ethos that should inform health care provision.
Making reference
to Pollock’s book this article will examine these
neo-liberal reforms in detail.
The founding NHS
legislation made the health service susceptible to market reforms
by successive Labour and Tory governments. Inherent within the
original NHS settlement was an attempt to balance the interests
of both the public and the private sectors. The Labour government
was under pressure from powerful interest groups like the British
Medical Association to prevent the state from having a monopoly
over health provision. As a consequence, GPs were allowed to
remain self-employed small businesses or ‘independent
contractors’, as were dentists, opticians and community
pharmacists. The original legislation, the NHS Act 1946 and the
National Assistance Act 1948, introduced two parallel systems of
care. On the one hand the NHS would be a universal system
‘free at the point of use’ whilst under the National
Assistance Act, ‘local authorities would provide a
subsidiary system for those in need of care and attention’
(Pollock 2004). Unlike the NHS this was means tested and subject
to statutory change.
Despite the
original inadequacies of the NHS settlement it was not until the
1980s that the NHS underwent a major transformation. The Tories
introduced a series of reforms that created an internal market
within the NHS. The health service was divided into service
‘purchasers’ and ‘providers’.
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NHS staff continue to do their best, despite the introduction of the internal market |
The
‘purchasers’ included health authorities and GPs whilst
hospitals and community services became service
‘providers’. Moreover, ‘providers’ became
organised into ‘Trusts’ and responsible for raising
their own funding (Pollock, 2004). Unsurprisingly, market reforms
created a business culture within the NHS with publicly owned
institutions being asked to operate increasingly like private
companies. The 1993 Patients Charter reflected this change of
direction. The ‘patient’ was constructed as a
‘customer’ or ‘consumer’ of health care.
One of the main
reforms to take place under the Tories was the removal of long
term care of from the NHS, and from local authority control. The
consequence was the creation of a predominantly private care
industry. In 1979, the figure for the number of people in private
sector care was 16% - by 2003 that figure was 69% (Pollock,
2004). The privatisation of long-term care would be
precipitated by the selling of care homes owned by the state at
‘rock bottom’ prices. Land associated with long-stay
hospitals was sold to make way for golf courses, property
developments and supermarkets.
The Community
Care Act 1990 radically restructured the provision of care. The
rhetoric was ‘care in the community’ but the reality
was somewhat different. In the same period that ‘care in the
community’ became prevalent there was an actual drop in the
number of people in receipt of community based care. For example,
between 1995 and 2000 there was a 22% drop in home helps and a
32% drop in the number of people receiving meals on wheels
(Pollack, 2004). The Community Care Act helped to facilitate an
offloading of responsibility for providing care from the state to
the private sector. The project of ‘rolling back the
state’ was complimented by an increase in the number of
people receiving care in their own homes. This care was usually
preformed by family and friends, particularly women. Describing
this as an ‘invisible workforce’ a report by the Royal
Commission on Long Term Care estimated that 5.7 million people
are providing unpaid care with 800,000 working 50 hours a week or
more (Pollock, 2004).
On the eve of
Labour’s election victory in 1997, Tony Blair warned the
public that they had just 24 hours to save the NHS. Despite the
successful ‘sound-bite’ the reality was rather
different. Labour would stick to the previous Tory
government’s public spending plans for the first two years
in office, which the then Tory chancellor Ken Clarke said was
extreme. The process of marketisation was continued unabated by
Labour a process euphemistically referred to by the Labour
government as ‘public sector reform’ and
‘modernisation’. Two particular aspects of Labour
policy have contributed towards the internal privatisation of the
health service- the Private Finance Initiative (PFI) and the
contracting out of NHS workers to private companies.
PFI was first
introduced by the Tories in 1992 and opposed by Labour. However,
when Labour came to power in 1997 PFI, rebranded as PPP (Public
Private Partnerships), became central to the new
government’s public sector reform agenda. Labour politicians
often boast that as a consequence of PPP there has been the
largest hospital building programme ever in mainland Britain.
What they omit is that it also led a programme of hospital
closures. Many local services were closed as service provision
became increasingly centralised. Pollock notes, that PPP was paid
for by major cuts in clinical budgets and the largest service
closure programme in the NHS history (Pollock, 2004).
| The other huge downside for the NHS of
PPP is long term cost. PPP is a consortium of bankers,
builders and service operators who raise money on the
government’s behalf and in return they get a
contract to design and build a hospital and operate the
supporting facilities for 30 or more years (Pollock,
2004). PPP works like a mortgage. For example, the Royal
Infirmary in Edinburgh is owned by a consortium of 4
companies that includes the Royal Bank of Scotland. By
the time the debt is paid off the hospital will have cost
a grand total of £990 million. If the same hospital had
been built under the old public procurement borrowing
system it would have cost only £180 million (Monbiot,
2000). |
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| Edinburgh's Royal Infirmary was paid for using expensive PFI |
Hospitals are
responsible for paying off the PPP debt from their annual income.
As a consequence, money is being spent on debt repayment instead
of essential health care. PPP hospitals are also more expensive
because the private sector cannot borrow as cheaply as government
to finance construction work. Furthermore, PPP consortiums
include additional costs - for example, servicing new
bureaucracies which are needed to monitor contract costs.
Hospital trusts that pay for PPP/PFI out of their existing
operational budgets have been forced to save costs by building
smaller hospitals, decreasing the number of beds and introducing
charging for car parking (Pollock, 2004).
Alongside a
reduction in beds and declining standard in health care,
Labour’s market reforms have led to a reduction in staff and
the creation of a two-tier workforce. Labour have presided over a
culture of ‘contracting out’ NHS staff to the private
sector. ‘Contracting out’ has led to increased
impoverishment for many in the workforce. Cleaners, porters, and
caterers who once worked in the NHS now work for private
companies - 70% of ‘contracted out’ workers are women.
A 2001 study of outsourced hospital workers in East London found
that almost all those interviewed earned less than £5 per hour.
Furthermore, workers employed in the private sector have received
reduced benefits from holidays to pensions (Pollock 2004).
Conclusion
The sixtieth
anniversary of the NHS presents an opportunity to reflect on the
contemporary state of the health service. Socialists need to
engage in a concrete analysis of the NHS and contemporary policy
discourses. It would be a mistake to dichotomise policy
developments into a simplistic private versus public debate. The
reality on the ground is much more complex.
What has happened
under Labour is not an outright privatisation of health care.
Instead Labour has introduced a mixed economy into the NHS.
Labour’s neo-liberal agenda has been implemented with
limited public debate. As a consequence, there is no democratic
mandate to transform the NHS from a welfare orientated service
into a commoditised good that is subject to market conditions. A
recent survey by YouGov revealed that 73% of respondents
disagreed with more ‘competition’ in the NHS. The same
survey also found that 89% of the public agreed with the
statement that ‘public services should be run by the
Government or local authorities, rather than by private
companies’. A study this year by the Work Foundation
highlighted that 85% of people believed that public services
should be funded by the taxpayer and free at the point of use.
Yet, despite public opposition to privatisation a study by Oxford
Economics in 2007 revealed that £44 billion worth of public
services are now delivered by bodies outside the public sector.
The story of the
neo-liberal agenda in heath care is a story of winners and
losers. The winners are the private companies that form the PPP
consortiums like the Royal Bank of Scotland. The other
benefactors have been the insurance groups, private hospital and
nursing home owners, nursing agencies, pharmaceutical companies,
property development companies and facilities management
companies. In short, big business! The losers are those who work
in the health service, particularly those who have been
‘contracted out’, patients who have had to suffer cuts
in essential health care accompanied by the closing down of local
facilities and a reduction in beds.
One of the
biggest losers is the taxpayer who will have to pay for PPP for a
generation. Developments in regards to NHS policy remain uneven.
In Scotland, there has been a change of administration at
Holyrood with the SNP being elected on a left of centre mandate.
One of their commitments has been to end PPP. However, their
alternative proposal, the Scottish Futures Trust, does not
represent a return to the public sphere. Moreover, the trade
union movement has failed to offer a detailed strategy on how to
reverse the process of ‘marketisation’.
There is also the
prospect of the Conservatives returning to power at Westminster.
This would undoubtedly see market based approaches continue in
the NHS and the role of the private sector expanded and
accelerated. Moreover, both Labour and Conservatives are keen to
see the ‘voluntary’ or ‘third’ sector play
more of a role in the public services delivery market. In this
context, ‘social enterprises’ could be placed in a
position to provide services for the NHS.
There are many
aspiring ‘social entrepreneurs’ who would no doubt
welcome cuts in NHS spending. Recently, the Tories launched a
Green Paper entitled Voluntary Action at the social enterprise
Sunlight. Sunlight provides everything from health care to a
radio station. For David Cameron, social enterprises have the
potential to become a model of providing public services without
the public sector. The Green Paper ‘Voluntary Action’
outlines an extended role for social enterprises and the
voluntary sector in detail in providing public services.
This should sound
alarm bells ringing for the left and all those that want to see
public services like the NHS publicly funded and democratically
controlled.
References
Monbiot, G,
(2000), Captive State, Macmillan, London, UK
Pollock, A,
(2004), NHS Plc, Verso, London, UK