Staked out for the vultures

By John Lister information director of Health Emergency

The new coalition government white paper Liberating the NHS could reduce the National Health Service in England from one of Europe’s largest single employers, with around 1 million staff, to near zero by the time of the next general election.

Tens of thousands would face redundancy through wholesale cuts in “bureaucracy” or lose their jobs through so-called “efficiency savings.”

Hundreds of thousands more could find themselves effectively privatised and transferred to non-NHS employers in the biggest shake-up ever to hit this popular public service.

The NHS itself, which currently spends £105 billion, will remain in name only as a “brand,” transformed from a major public service into little more than a central fund drawn from general taxation.

This cash mountain would be used to commission a variety of services delivered by non-NHS organisations in a competitive health-care “market” in which a growing number of private providers, including multinational corporations, would be encouraged to operate.

Continued central funding would ensure that patients would mostly not be required to pay for services at point of use, preserving the illusion of continuity of the NHS, while even more non-profit and profit-seeking providers slice off lucrative portions from the public budget.

At present the NHS is divided internally into three sectors.

“Commissioners” of services operate locally through 152 primary care trusts and 10 strategic health authorities. These hold or allocate budgets for the various sectors of health care.

“Providers,” a network of local NHS trusts covering acute, mental health, community care and ambulance services, together with local community services agencies

129 free-standing NHS foundation trusts. These work outside the main NHS management structure and are accountable to an independent regulator, Monitor.

The majority of staff working in all these organisations are NHS employees, enjoying nationally negotiated pay scales and terms and conditions including sick pay and pension entitlements.

In addition around 60,000 family doctors, general practitioners (GPs), work largely as independent contractors to primary are trusts, delivering primary care to a defined list of patients. They work with teams of nursing and other staff, some of whom are employed directly by the GP practice and some through PCTs.

Several years of efforts by the new Labour government have failed so far to persuade more than a small minority of GPs to take on the responsibility of “practice-based commissioning,” in which they would shape the policies and spending decisions of their local primary care trust.

The new white paper would completely reorganise this structure. The “commissioning” bodies (PCTs and SHAs) are to be scrapped altogether with the loss of tens of thousands of managerial and administrative jobs.

The public health function of PCTs is to be hived off to local government and the Department of Health itself would be reduced to a small rump organisation.

The commissioning role is instead to be taken over by GPs, who will be obliged to participate, working through local consortia of GPs and, if necessary, forcibly incorporated into a consortium.

It is clear that these consortia would need to enlist substantial additional expertise and administrative assistance, either from former PCT or SHA staff or from private-sector management consultants who in many PCTs have been playing an increasingly influential role for some time.

But while NHS employment among commissioners is set for near-extinction by 2013, the providers too will increasingly be forced out of the NHS.

Foundation trusts, already detached from the mainstream NHS, are to be pushed even further by the white paper proposals to become “social enterprises.”

They would be encouraged to set their own pay scales and lift restrictions so they could expand provision of private medicine and their links with the for-profit private sector, “regulated the same way as any other providers.”

Health Secretary Andrew Lansley is also known to favour shifting foundation trusts “off balance sheet” from the NHS and allowing them to run as normal companies, regulated by Monitor.

This raises the prospect that new staff recruited to foundation trusts would be employed outside the NHS, its pensions and terms and conditions. Existing staff would initially have their terms and conditions protected, but there is little doubt that growing numbers of trusts would soon set about changing these contracts.

There is no escape for NHS employees. The white paper stipulates that all remaining NHS trusts are either to become foundation trusts, or be taken over by foundation trusts, by 2013, when their current legal status will be repealed.

Community health and primary care services, currently run at “arm’s length” from PCTs, would also be systematically put out to tender and either reorganised as “social enterprises” outside the NHS, taken over by foundation trusts or by “any willing provider,” whether for-profit or not.

This would be imposed on staff from above. We already know that virtually every sector of the workforce that has been allowed to vote on whether or not to join in a social enterprise has voted by 90 per cent or more to reject the idea. The hostility to private companies would be even greater.

All of these moves to whittle down the NHS to a bare minimum handful of employees will also take place in the context of the fastest and largest spending cuts in history.

Lansley’s white paper makes clear that the £20 billion target for “efficiency savings” is to be achieved by 2014, two years earlier than previously planned.

Such a massive and unprecedented squeeze on spending could only be carried through by axing tens of thousands of staff, closing beds, wards and hospitals, and massively increasing the workload of the staff remaining.

However it’s by no means certain that things will go the way Lansley expects. His apparent master stroke of handing commissioning to GPs is itself highly controversial even within the government.

The Treasury in particular attempted to prevent the plan to hand £70 billion in commissioning budgets to GPs with no managerial or commissioning training or experience.

The department’s fear is that GPs in many areas will take the line of least resistance, avoiding making unpopular cuts and closures which might antagonise their own patients – making it almost impossible for cutbacks to hit the £20 billion target.

In addition the previous track record of GP commissioning, when the previous Tory government imposed the controversial system of “GP Fundholding” in the early 1990s, was that many GPs did precisely that.

Under that system GPs held back £1 for every £6 they were allocated for patient care, leaving millions unspent. Administrative costs elsewhere in the NHS were forced sharply upwards, with an estimated £500m of additional bureaucracy as each trust was obliged to negotiate one by one with a variety of fundholding practices.

And even the new white paper admits that under fundholding the varying priorities from one GP practice to another brought a “postcode lottery” for patients, with widely varying access to health-care.

Despite this, the system is set be made even more arbitrary by the scrapping of any form of planning, along with many performance targets and any incentive to co-operate, collaborate and share best practice.

Now, as then, the apparent power given to GPs is being backed up with a blunt threat that they have to drive the cuts and rationalisation and stay within financial limits, warning that any GPs or providers that go bust will be allowed to fail in a ruthless, competitive marketplace.

On top of this threatened workload is the introduction of patient “choice,” backed up by voluminous information which will no doubt delight some of the sharp-elbowed middle classes, but will confuse and irritate many other less confident and articulate patients. Most just want to be able to access good quality care from their local NHS provider.


But it is far from clear that GPs, even if they want to, would have the time to work through the exhaustive process of offering each patient this choice of not only which hospital or provider to use but which consultant to see, let alone provide detailed studies to back it.


In London and elsewhere the pressure for “efficiencies” in primary care has been for GPs to spend less time, not more with each patient. The white paper makes this almost impossible to achieve.

Will GPs be persuaded to take on this work, which ministers have made clear would not be rewarded by any extra pay? The British Medical Association has waged a strong campaign against a market in health-care, but with GPs themselves divided on the issue it is not clear how it will respond.

The other big question is how strongly the TUC health unions will resist this root and branch attack on the jobs, pay and conditions of their members and the dismemberment of the NHS as a public service, which builds on all the worst aspects of Labour’s “reforms.”


One thing is clear. If the white paper is carried through, the new system will eviscerate the NHS, wiping out much if not all public-sector provision, and installing the untrammelled competitive market in place of any form of planning, co-operation or collaboration.


It will offer a bonanza for private providers and ring the death knell for any serious attempts to implement policies aimed at reducing inequalities in health.

It can and must be stopped.

From the Morning Star


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