Politics Magazine

Burnham: Pause NHS Privatisation

Posted on the 30 July 2014 by Thepoliticalidealist @JackDarrant

NHS privatisation is being forced through at pace and scale. Commissioners have been ordered to put all services out to the market. NHS spending on private and other providers has gone through the £10 billion barrier for the first time. When did the British public ever give their consent for this?


It is indefensible for the character of the country’s most valued institution to be changed in this way without the public being given a say.

Shadow Secretary of State for Health, Andy Burnham MP

Andy Burnham has written to the Chief Executive of NHS England to ask him to postpone all outsourcing deals until after the next General Election. He has made the request, which will not be agreed to, on the grounds that it would be undemocratic to proceed with such a radical change to a public service without implicit public endorsement. Burnham will be accused of gimmickry: don’t all governments accelerate the introduction of their policies before an election so as to render them irreversible if they lose? However, the Labour spokesman on Health is correct to say the Coalition lacks a mandate for the Health and Social Care (i.e. NHS privatisation) Act. The manifesto of the dominant Coalition partner guaranteed that no such Act would be approved. Politicians are often prone to neglecting their election commitments.

So what would a Labour government actually do for the NHS?

Despite agreeing with Burnham that the composition and purpose of the NHS should not be further distorted until/unless there is a popular mandate for the policy, I see no prospect of his request being heeded, which is a shame. There is also the risk that, if Labour were to win next year’s election, they would quietly drop their pledges to reverse the Coalition’s privatisations. Critics point to New Labour even accelerating the privatisation of public services after 1997.

When it comes to the NHS, I think this is unlikely, for several reasons.

Firstly, Ed Miliband is not Tony Blair. Tony Blair was much more of a despotic presidential leader, and excercised tight control over his Cabinet’s actions. Accordingly, his Health ministers would not have enjoyed the same security and independence that Andy Burnham (who is almost a Labour heavyweight now) does. Also, I doubt Ed Miliband has the ability to carelessly lie to the electorate that Blair has demonstrated. The Miliband fan club isn’t huge, but even his opponents are likely to concede that he’s honest.

Secondly, Labour has generally lived up to its stated main aim on healthcare. In 1997, it promised more resources for a service that was intentionally being run down. The NHS budget was then tripled in just 13 years. Blair might have discarded his opposition to PFI contracts (see below) and outsourcing, but he was only disappointing the few policy wonks who were paying attention.Today, Labour is stressing the importance of a publicly-owned NHS, and so this is where they will have to deliver.

Lastly, Andy Burnham is almost certain to retain the health brief for the duration of a Mililband government’s first term. Burnham is hugely popular with the party (and no threat to the leadership) and knows the health brief exceptionally well. His personal record is a sound one: as Health Secretary for the last year of the Brown government, he did not sign off a single PFI deal. He resisted further privatisation quite well for a relatively unknown figure in under a neo-liberal prime minister.

However, there are important limitations to what Labour is currently offering. They are merely proposing the restriction of outsourcing in the NHS, not its outright elimination. I don’t understand how the NHS can “put people before profit” when it is still infested with for-profit organisations running key services in a ridiculous ‘internal market’. This conflict of interests; of public good and commercial gain, is what leads to absurdities like Burger King franchises opening in NHS hospitals- which are struggling with a heart disease epidemic caused by excess consumption of junk food!

Furthermore, Labour is silent on the continued use of the awful Private Finance Initiative to fund almost all hospital construction projects. PFI deals see large corporations, not the Treasury, lending NHS trusts (or other public institutions) the money for project, in exchange for massively inflated and protracted repayments. Some hospitals pay 12 times the actual cost of a PFI construction project. A south London NHS Trust was recently bankrupted by its PFI deal, and many could follow in the next couple of decades. So why are politicians so in love with PFI?

PFI deals are kept off the Treasury books, so are not included in the National Debt. In this way, the £300 billion that Brits will pay for £55 billion worth of PFI projects is spirited away. We’ll still pay it, but at least we think the National Debt is 20% lower than it effectively is. Also, New Labour and the Tories were convinced that the private sector is more efficient than the public, even though we pay more than £5 for every £1 borrowed using PFI.

So in order to save the NHS, the government must spare it the drain on its resources that PFI repayments inflict. The government should enact a mass buyout of all PFI contracts at their face value; ban all new ones; and put in place a multibillion public works loans fund to replace PFI. This move would save the NHS over £40 billion over the next 25 years.

If the demise of the NHS were a horror film  (it feels like one!), Labour is offering to hit the ‘pause’ button. But Britain really needs somebody to reach a little further and ‘rewind’.

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