Understanding Privatisation and the National Health Service

Privatisation, as a word and a concept, is saturated with ideological tension and negative connotations. There is no wonder that we struggle to understand what it actually means. It has been wielded by the left of politics to convey everything apparently capitalist and greedy about the Conservative and other right-of-centre political parties. And forwarded by these people on the right to condemn everything apparently inefficient and socialist that Labour et al. support.

David Cameron recently said, in a speech recorded on GOV UK, “They said we would privatise the NHS. It’s just not true. The founding values of the NHS are my values. The NHS will always be free for everyone under a Conservative government”. Our newly elected Prime Minister has it on the record that his government will not introduce fees for the National Health Service, so why do so many insist that privatisation spells the end of a free service?

Our current understanding of privatisation derives from the offloading of various facilities in the 1980s. This period said farewell to a nationalised British Telecom, British Gas, Jaguar, Britoil, British Steel, British Petroleum, Rolls Royce, British Airways and water and electricity utilities. And whilst market driven competition has forced some of these companies to wane and wither, others have flourished. Jaguar Land Rover currently holds assets worth £15.5bn.

“Our newly elected Prime Minister has it on the record that his government will not introduce fees for the National Health Service”

Therefore our existing experience of privatisation is that any fees required to use the service are passed on to the customers. We pay directly for the water that comes out of the tap, the electricity that charges our phones, and the train that gets us to work. The market largely dictates how much we pay through the basic economic concept of supply and demand. The open market theoretically forces prices down as firms compete for customers.

This market is not problem free. Opponents of the privatisation of utilities often argue that such services are natural monopolies and therefore can only be controlled by one company. Perhaps one reason why rail fares are disproportionally expensive is because only one train can run at a certain time, therefore there is limited scope for competition.

But the privatisation of the NHS largely differs from these previous examples. The Health and Social Care Act 2012 created a competitive health market where the government pays for, but does not supply certain health services. The treasury will continue to fund the NHS and the public will continue to contribute through tax.

Privatisation of the NHS means that the government sells contracts for companies, and often charities, to run the services. Those in charge of medical services, the Clinical Commissioning Groups, can commission services to ‘any qualified provider’. That provider no longer has to be owned by the state. But the service will, as Cameron promised, remain free at the point of delivery. In other words, we are not going to descend into some American style insurance based system that requires us to run a meth lab in order to pay for chemotherapy.

For example, Circle took on a £1bn ten year contract to run Hinchingbrooke hospital in 2011. The first, and currently only, contract of its kind. Admittedly, Circle exited the contract in January 2015 citing the tenure was financially unviable and following recommendations from the Care Quality Commission to put the hospital into special measures.

“That provider no longer has to be owned by the state. But the service will, as Cameron promised, remain free at the point of delivery”

This demonstrates that companies have to further develop financial, clinical and personal care skills before taking on such a grand commitment. And the government also needs to review its strategies for commissioning contracts. But, before we berate the poor care of Circle too much, let us not forget that thirteen state operated hospitals are also currently in special measures. Not to mention the numerous abuse scandals that have rocked the core of the NHS.

Alas, the experiment has not yet failed. Staffordshire hospital are currently offering a £1.2bn contract to provide cancer treatment and end-of-life services.

Whether or not allowing private companies is, in theory or reality, the best way to run care services, remains to be seen. However, under this government at least, there will be no change in the way that Joe Bloggs pays for the NHS. The nation will continue to cling to the idea of a state run health service for many a year. But, for now, its high tide we stopped running afraid of the word privatisation and sought a proper clarification of the politics that govern us.

Rachel Lewis

Image by Lee Haywood via Flickr

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3 Comments on this post.
  • Chris Blackmore (The Walrus)
    30 June 2015 at 00:13
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    There’s no struggle to understand.

    The Tories are stealing the health service we built for ourselves, so that they can make money from it.

    There, explained it for you.

  • Scott Jennings
    23 July 2015 at 15:50
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    I’m a little disappointed no reference has been made to the successful Referendum at our union calling for NUS to campaign and support the NHS Reinstatement Bill (link to impact article below). The article fails to reference the cost of these contracts directly and via proxy, the poor care from private providers has caused NHS legal costs to rise, quality of care has fallen, competency and promptness has also fallen – just look at the outsourced non emergency ambulance services they are less prompt and less reliable than their NHS counterparts.

    Look at the situation in mental health which is massively outsourced, they honestly ask mental health patients which provider they want!!! Why are we asking people with depression or other conditions who they want to be dealt with they were refereed under the NHS they should be cared for under the NHS all they care about is getting the help and support they need.

    UoN Left Society, the Young Greens and Environment and Social Justice Committee are likely to continue work in this area alongside Nottingham Keep Our NHS Public to engage students on the future of NHS as it is so important to students.

  • Andy
    7 August 2015 at 13:32
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    Interesting article. I reccomend anyone interested in this area and studying at the University of Nottingham enrols on the Public Service Management module run in the business school.

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