Read NHS for Sale: Myths, Lies & Deception Online
Authors: Jacky Davis,John Lister,David Wrigley
Vast amounts of money are involved here, £95.6bn in the case of NHS England alone, and it is simply not acceptable that there is no clarity or clear accountability for that kind of public expenditure … The architecture is not meant to be reminiscent of the film
The Matrix
where doors open on virtual worlds which are insulated from reality and hidden from the public and from those meant to be accountable for them.
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NHS England itself is now headed by Simon Stevens, a onetime political advisor to Tony Blair, who then spent ten years in the private sector, working for giant US health insurance corporation UnitedHealth, (where he became Executive Vice President). It is chaired by Professor Sir Malcolm Grant, former provost at University College, London, who has complained of ‘meddling’ by government ministers in the running of the NHS.
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NHS England’s plans to cut the ‘minimum practice income guarantee’ which supports GP services in deprived and rural areas produced an angry reaction from hard-pressed GPs
who warned it could trigger substantial numbers of practice closures. Amid street protests led by GPs in East London, NHS England had to retreat, shelving the problem for at least two years. NHS England has also been found in the High Court to have repeatedly departed from the provisions of the HSC Act by imposing changes in primary care services without any mechanism to consult or engage with patients and public in the affected localities.
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NHS England has been prone to blunders. It is so isolated and remote from the real world that it has been slow to recognise its mistakes. For example, a formula for commissioning specialist services for the care of offenders with severe mental illness proved to be ill-conceived. It was based on the ostensibly lower daily fee for secure placements charged by some private sector providers, below the cost of delivering the superior and more effective services in specialist NHS Trusts. The result would have been a long-term increase in costs, since the lower levels of therapeutic treatment in the private units would mean that offenders would stay there for far longer, and would be more likely to reoffend after discharge. NHS England had to retreat on this plan – although the problem is still not finally resolved as this chapter is completed.
In October 2014 further fears of NHS England incompetence were provoked by new plans to stop commissioning specialist renal services i.e. dialysis and transplants. NHSE announced a minimal six-week ‘consultation’ spanning the Christmas period. Thereafter (from April 2015) they looked forward to dumping the problem onto ill-prepared Clinical Commissioning Groups. This move has been roundly
condemned by the British Kidney Patient Association as endangering access to care and potentially putting lives at risk.
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There is also widespread and growing chaos at the local level. Inexperienced Clinical Commissioning Groups, pressed by the Health and Social Care Act and associated regulations, and often led by a handful of maverick GPs or, from behind the scenes, by management consultants, are drawing up ever more far-reaching and irresponsible plans for contracting out services. Some are doing this regardless of the potential impact on local NHS trusts if the contracts – and the funding – are won by private sector bids.
Already some CCGs are awarding contracts to the private sector for Musculoskeletal (MSK) services, and these potentially destabilise local NHS trauma services and therefore the viability of A&E departments. Elsewhere a variety of other services – care of older people, cancer care, end of life care, and a range of community health services such as community beds, specialist community nursing, community therapy, podiatry, early supported discharge and intermediate care – are being put out to tender, with a combined value of billions over five to ten years. If private sector firms succeed in winning these contracts, they will undermine the viability of dozens of local trusts which provide other vital services to their local communities.
It’s all getting out of hand, but it’s important to remember that the new drive towards privatisation and fragmentation is not the only aspect of government policy that threatens the future of the NHS. The crisis in the NHS dates back to the great 2008-9 banking crash which heralded the end of a record ten successive years of investment in the NHS from 2000 to 2010, and which has taken five years to come fully to the surface.
It’s a crisis which combines the impact of the unprecedented five-year spending freeze (which is driving indebted hospital trusts to rationalise and cut back local services to save money), with a growing fragmentation and dislocation of the newly-reorganised system. The fragmentation certainly began under Tony Blair’s Labour government, but it has been vastly accelerated and deepened by the impact of the Health and Social Care Act.
The driving force in this latest crisis has been the Tory-led coalition government, which has cynically seized upon the pretext of the economic dislocation triggered by the banking crash as justification for imposing its neoliberal austerity policies on the NHS. Of course Cameron and his ministers energetically deny this, and profess their total commitment to the NHS and its values. When challenged on the inadequate level of funding, along with lengthening waiting times and queues for treatment and the rising debts of local NHS and foundation trusts, David Cameron insists the government has put ‘an extra £12.5bn’ into the NHS since it took office. Over five years, that works out roughly £2.5bn per year – just a fraction above inflation, but increasingly falling short of the rising costs of meeting the health needs of a growing population.
Tory chancellor George Osborne has planned for this freeze to continue at least until 2021. However, almost all experts not on the government payroll are agreed that this would result in a massive potential £30bn gap between NHS income and costs of delivering services. Despite the Tory rhetoric before and since, the election of 2010 brought not only a change of government, but the start of a new era of
frozen real terms budgets, which will have risen by a total of just 0.1 per cent above general inflation in five years.
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The same period has seen a significant rise in the total population, and in numbers of older people, who tend to make greater demands on the NHS. The Institute for Fiscal Studies estimates that if the spending freeze is maintained it could cut age-related per capita spending on the NHS by 9.1 per cent from 2010 to 2019.
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Other cost pressures, including the bill for new drugs and techniques, have continued to mount up. Estimates of the rising cost pressures vary – but it is commonly assumed that increases in spending above inflation of 3-4 per cent each year are needed to maintain and grow services and maintain performance.
Up to the arrival of the coalition, spending had risen on average just over 4 per cent a year since the NHS was formed (although this average is itself inflated by Labour’s big spending increases from 2000 to 2010).
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The NHS budget had never before been frozen for any sustained length of time. We are in unexplored waters.
On top of the regular pressures there have been costly pressures from ministers, too. Health Secretary Jeremy Hunt has insisted that NHS trusts – regardless of financial pressures – must increase nurse and other staffing levels to comply with the recommendations of the Francis Report on the catastrophic failures of care at Mid Staffordshire Hospitals from 2005-2008.
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As a result thousands more nurses have been recruited, leaving many trusts facing deep deficits, while the Care Quality Commission is warning that more than three quarters of trusts are failing to deliver adequate safety for patients.
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Estimates in the McKinsey report
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made back in 2009 suggest that the cumulative gap in resources for the NHS would reach a total of £20bn by
2015. The report, commissioned by then Health Secretary Alan Johnson, outlined ideas (many of them impractical) for ‘cost savings’. Despite being officially disavowed both by the Labour government that commissioned it and by the Tories, who denounced it in opposition and then published it once elected – these ideas have shaped subsequent plans of trust boards and local commissioners for ‘cost savings’.
Also in 2009, amid growing concern over the need for a mechanism to force through unpopular local decisions to close hospitals that failed in the new, emerging competitive ‘market’ for health care, Labour tweaked its 2006 legislation to create the ‘Unsustainable Provider Regime’,
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which has now been tweaked again by Jeremy Hunt, seeking even more draconian powers in the aftermath of his bruising defeat over cuts at Lewisham Hospital (see
Chapter 10
).
The coalition has outlined financial plans that include a continued freeze on NHS budgets running right up to 2020, while other sectors of public spending face further cuts. Even in the ‘ring-fenced’ NHS the proposals would open up an unprecedented decade of standstill funding, culminating in what forecasters – including the Nuffield Trust, King’s Fund, Monitor, NHS England and its chief executive Simon Stevens
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– have calculated as
another
£30bn gap in spending over the five years from 2015. To give some idea of the scale of the problem, had Labour in 2000 implemented a similar freeze rather than their big increases in spending up to 2010, England’s NHS budget would now be just £75bn per year – almost 30 per cent lower than the current £105bn.
So far the impact of the squeeze on spending has been to a large extent concealed by a disproportionate cut in the real salaries of over one million NHS staff covered by the ‘Agenda for Change’ pay structure. Pay for these staff has either been
frozen or risen well below inflation each year since 2009, bringing real terms reductions in pay of upwards of 12 per cent since 2010 for lower paid staff, and 16 per cent or more for nurses and professionals above Band 5 on the pay scale. But all observers of the unfolding situation are now warning that the pay cuts cannot go on for ever, and that the additional £30bn cuts, at a time when most trusts are already mired in deficits, simply cannot be absorbed without doing serious damage to the NHS. The NHS Confederation has pointed out that one consequence could be reopening the question of charging patients to see GPs or for stays in hospital.
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The King’s Fund’s Barker Commission
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began from the assumption that that no government party would raise taxes to spend enough to protect the NHS. The Commission drew up a list of unappealing options to raise money in less progressive ways, including wider imposition of prescription charges, and a series of taxes and costs for those over retirement age. The more right-wing ‘think tanks’ have of course wheeled back out their vintage plans to impose charges for treatment, for a £10 per head annual ‘membership fee’ for the NHS, or to drive those who can afford it towards private health insurance.
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As the commentator Roy Lilley has observed, whether health funding comes from one pocket through charges for treatment or drugs, or from the other pocket through taxes, it is ‘the same trousers’. Health spending has to go up, or services have to be cut. But of course if the extra is raised through charges, the burden of cost falls least fairly and sustainably on individuals (often the very young, very old or the poor) who are sick and obliged to pay, while those who are not sick make no contribution.
The 2014 party conferences, at which Labour, Tories and Lib Dems largely set out their stalls for the next election, saw each party timidly sidestepping any commitment to restore the purchasing power of the NHS or substantially break from the continued decline in real terms funding proposed by the coalition until at least 2020. Labour promised a ‘Time to Care Fund’ of £2.5bn per year – but to be funded through taxes on ‘mansions’ worth more than £2m, hedge funds and tobacco industry profits – which may not yield any revenue until 2017.
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The Lib Dems offered an even more feeble injection of £1bn in 2016 and again in 2017, while the Tories stuck to their misleading claim to be ‘increasing NHS funding’ and again pledged to ‘ring-fence’ the NHS budget, suggesting at best a microscopic percentage above inflation up to 2020.
None of these policies offers any hope for sustaining current levels of service to the end of the decade, meaning that whichever party wins the election in 2015 will be plunged almost immediately into a chaos of cuts and closures, in which (as we have seen in every previous such period) opportunist individual ministers and MPs inevitably break ranks with their government to side with local campaigners.
The scenario of recent cuts is further complicated by the menacing tide of competitive tendering and privatisation leading to increased fragmentation.
The drive towards privatisation has been accelerated and intensified by the Tory-led coalition. By contrast, immediately prior to the 2010 election, Andy Burnham, who had taken over as Secretary of State from Alan Johnson in June 2009, had moved swiftly to end the pressure for community health services to be opened up for tenders from ‘any willing
provider’ that had been initiated as part of Labour’s plans under Patricia Hewitt, and driven forward by Johnson.
Instead, to the fury of Blairites in his own party, along with the private sector and some of the voluntary sector organisations that were queuing up for NHS contracts, Burnham ruled that the NHS should be the ‘preferred provider’.
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This left the purchaser/provider split and the framework of a competitive market intact. This was strenuously challenged, but Burnham managed to hold the line until the election, after which the new Health Secretary, Andrew Lansley, within weeks unfurled plans to open up not just community health services but many other parts of the NHS to any willing provider – later grudgingly and ambiguously amended in the Health and Social Care Bill to ‘any qualified provider’.