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Privatisation of NHS Services
(6 years, 8 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mike Hill (Hartlepool) (Lab)
I beg to move,
That this House has considered e-petition 205106 relating to the privatisation of NHS services.
It is an honour to serve under your chairmanship, Sir Graham. I pay tribute to a young constituent of mine, Connor McDade, whose father, John, is a friend and a former work colleague. Connor was run over in Newcastle last weekend, but despite the most excellent care provided by NHS staff in the critical care unit at the Royal Victoria Infirmary in Newcastle, his life support was switched off yesterday. On 14 May, he would have been 22. He passed in the early hours of this morning. The standard of care delivered by staff at the RVI was second to none, so it is fitting that I pay tribute to them and all hard-working NHS staff at the beginning of my speech.
Privatisation in the NHS is not new. When the NHS was founded in 1948, agreements had to be thrashed out with GPs, doctors and consultants to allow private practice to continue and sit alongside the new national health service. Private healthcare insurance has been around for longer than the NHS. The British United Provident Association—BUPA—was founded in 1947, and it currently has about 15.5 million health insurance customers and 14.5 million people in its private clinics and hospitals.
The NHS itself has always had a private treatment offer, although between 1974 and 1976, Barbara Castle, the Labour Secretary of State for Social Services, campaigned to abolish pay beds in the NHS. That was achieved after her tenure in 1977, but the Tories repealed it three years later in the Health Services Act 1980. On abolishing pay beds and separating out private and NHS facilities, Mrs Castle said:
“The existence of pay beds, with the opportunity it gives to a few senior doctors to make private gain and the opportunity it gives to patients with money to jump the queue, is seen as a bitter affront to those thousands of other staff who are dedicated to the principle of a free Health Service.”—[Official Report, 21 November 1975; Vol. 901, c. 355.]
Tens of thousands of health workers, citizens and patients would echo that opinion today. It is also the opinion of the British Medical Association, which believes that the NHS should always be free at the point of use and has campaigned for many years to halt the spread of privatisation. Its focus is not just on private practice, but on private provision—the privatisation of services, commissioning and procurement.
It is worth noting that, on private practice or healthcare provision, an update to the BMA’s 2016 report entitled “Privatisation and independent sector provision in the NHS” shows that in recent years, the number of NHS patients treated in private hospitals has increased substantially. In 2015-16 alone there were 557,200 admissions—an increase of 8%—and in the same period 5% of NHS-funded elective surgical admissions were to independent sector facilities.
Thelma Walker (Colne Valley) (Lab)
We are witnessing the fundamental dismantling of the NHS and creeping privatisation, which is undermining its dedicated, hard-working staff. Does my hon. Friend agree that we need to halt all privatisation and legislate against the selling-off of our world-renowned health service?
Mike Hill
As a member of the Petitions Committee, I am independent; as a Labour MP, I agree. I will come to that point later.
Private practice is only one aspect of the worrying trend towards the increased privatisation of NHS services. As the BMA points out, the recent legal action that Virgin Care brought against several clinical commissioning groups should serve as a stark reminder of what can happen when the relationship between the NHS and the private sector sours.
Paula Sherriff (Dewsbury) (Lab)
My hon. Friend is being very generous in giving way. Many Members know that I worked in the NHS for more than 10 years. That service was privatised and taken on by Virgin Care, which destroyed it. What concerns me is that I have given Conservative Health Ministers, including the Secretary of State, the opportunity to talk to me on a number of occasions about Virgin Care’s many failings, some of which were very dangerous, but they have never taken up that opportunity. Does my hon. Friend share my concern?
John Spellar (Warley) (Lab)
Is it not the case, as the two previous examples show, that we are not comparing like with like? The supposed savings are actually achieved by an immediate reduction in service or by the service becoming unviable, which means that the Government have to pick up the pieces. If anything goes wrong with a private healthcare operation, the patient has to go into the national health service, which has to bear the burden.
Mike Hill
I entirely agree. The forecasts for the next three years indicate that £10 billion-worth of NHS work will go to the private sector.
A settlement reported to be in the region of £330,000 was paid to Virgin Care in December 2017, following a procurement process in which an alliance between a foundation trust and local social enterprises won a contract to provide children’s services across Surrey. Such interventions and the ability of private companies to challenge NHS procurement provisions are precisely why there are fears about the transatlantic trade and investment partnership—a proposed trade agreement between the European Union and the United States. Many fear that our separate post-Brexit trade agreements with the United States will mean that NHS services will be exposed to the competition and might of the American private care market.
Laura Smith (Crewe and Nantwich) (Lab)
Hundreds of my constituents in Crewe and Nantwich signed this petition because they want their Government to put people before profit. Fourteen hospital trusts have had to trigger emergency contingency plans and delay hospital building because of the collapse of Carillion earlier this year. Given that Capita’s annual losses are rocketing, does my hon. Friend agree that the Government’s response shows that they remain dangerously obsessed with privatisation in our NHS?
Mike Hill
I agree. As I said, it is estimated that, over the next three years, up to £10 billion-worth of NHS contracts will go to the private sector, including the provider that my hon. Friend mentions.
Are such fears irrational or are people right to be concerned about the privatisation of NHS services, given the fact that the influence of private healthcare providers has risen sharply in recent decades? The use of the private sector has been progressed by successive Governments over many years. The present Government blame Labour for introducing private finance initiatives, which they say have burdened the NHS with eye-watering debts, but the Government compounded the problem through PF2. They also blame Labour for opening up the NHS to marketisation by splitting primary care trusts into commissioning and provider arms, and introducing the concept of “any preferred provider” in its transforming community services programme, even though the Secretary of State at the time, Andy Burnham, expressly stated that the NHS would always be the preferred provider of services. Yet from 2010 onwards this Government extended that model, creating clinical commissioning groups and pursuing competition and commercialisation with renewed vigour. Today, therefore, many traditional public health services are run by private providers such as Virgin Care and GP consortiums in their own right—services such as out-of-hours urgent care, sexual health and mental health residential care.
The Health and Social Care Act 2012 was designed to bring in a far greater private sector element to the NHS through expansion of the internal market. Since then, the privatisation picture has been more mixed than had been feared, not only as a result of campaigns by Unison, the GMB and others, but because various Government initiatives to boost privatisation fell flat. However, there is still significant evidence of increasing privatisation, with companies such as Virgin, Serco and Spire continuing to prosper.
John Spellar
My hon. Friend mentioned the care sector. Is there not a fundamental flaw in that sector, because it is based on offshore location of ownership of the assets and on heavy leveraging and gearing of the companies? That has meant that many of them are on the brink of bankruptcy, and they seek either to be bailed out or to throw many thousands of very vulnerable and elderly people straight back to the Department of Health and Social Care. The Government have no real plan, as far as we can see, to deal with such a contingency.
Paula Sherriff
I want to be clear about some of the dangers of privatisation. When Virgin Care took over our dermatology service, it would not subscribe to the SystmOne computer system, so we had to use another system, which was not operable for more than a year. Patients were coming in, but we had no idea what they were coming in for—we had to ask them questions such as, “Is the lesion on your left or right arm, or on your leg?” That is particularly difficult with patients who have dementia or learning difficulties, for example, and it represents a significant hazard to patient safety.
Mr George Howarth (Knowsley) (Lab)
Will my hon. Friend give way? I know he has just said, “One more time”, but perhaps he will make it two.
Mr Howarth
I am grateful to my hon. Friend. He has made a powerful case for how it is wrong in principle to privatise the national health service, and he has alluded to comparisons with the social care sector. Is not one of the major risks the fact that private sector provision sometimes fails—the business fails—so there is a complete and, in the short term, irreplaceable loss of capacity in the healthcare categories catered for by such a company?
Mike Hill
I cannot disagree with such a well made point.
The impact of austerity has been a double-edged sword, according to the union Unison. On one hand, less money can be made from the NHS, so some firms have shrunk away. On the other hand, the NHS has opted increasingly for short-term fixes as it struggles with insufficient funding, and that has created opportunities for the private sector. For example, the Carter review includes the threat that hospitals that cannot make sufficient savings in their support services or pathology functions might have to use outsourcing instead. Most recently, the development of wholly owned subsidiary companies has brought a whole new set of fears for the NHS, and for health staff in particular.
The old fears from the 1980s and 1990s are beginning to resurface. When we add social care into the mix, those fears multiply. The NHS is one of our proudest achievements, and we need to protect it, not privatise it. To do so, we need to revoke section 75 of the Health and Social Care Act.
Andrew Selous (South West Bedfordshire) (Con)
I am grateful to be called to speak in this important debate, Sir Graham.
Let me say at the outset that I very much support our national health service, paid for out of taxation and available for all at the point of need, irrespective of the ability to pay. The NHS saved my life when I was 24—it was there for me when I needed it, and I always want to be there to defend it for all those who will need it.
I have the privilege of serving on the Select Committee on Health and Social Care. Given that advantage, because some of these issues have come up recently at our evidence sessions, I want to quote some of what people who know an awful lot about the NHS have said about the alleged privatisation of the NHS, and particularly about sustainability and transformation plans, which the Government are rightly introducing to give us proper, integrated place-based care.
Simon Stevens is the chief executive of NHS England, and on 20 March he gave evidence to the Health and Social Care Committee. In particular, he responded to some of the claims made by Professor Allyson Pollock. I have met her only the once, when she came to give evidence before the Committee, but I have no doubt that Professor Pollock is sincere about what she believes. Members, however, should listen with an open mind to what Simon Stevens—first appointed to a senior position by a Labour Government, incidentally—says about her concerns. I hope that it will be helpful to the debate.
On the sustainability and transformation plan agenda, which is all about integrated care systems, Simon Stevens said in answer to question 270:
“We will probably see a significant decrease in the number of services that are subject to procurements.”
Talking about some of the comments made recently about the issue, he went straight on:
“Having had a chance to look at some of the evidence that you received from one of the panels of activists”—
Professor Pollock—
“I have to say that, frankly, some of the claims that were being made are made year in, year out, almost regardless of what is happening in the national health service. Indeed, I came across an article talking about how the NHS was being turned into an American health system, which it is not.
The article talks about the fact that the Government’s reforms are going to ‘move the NHS towards an insurance model,’ where ‘primary care groups could sound the death knell of equity, universal coverage and care free at the point of need in the NHS.’ That privatisation and Americanisation article was written 20 years ago by Allyson Pollock. Then I see in the British Medical Journal in 2001 an article by Allyson entitled, ‘Will primary care trusts lead to US-style health care?’ The answer is no, and they did not. We look forward to 2010 and see another article from the same author saying that the NHS in England is to be dismantled, and instead healthcare will be run on US healthcare lines. That is not true.
We see a subsequent article saying that Brexit is in fact going to lead to the destruction of health as a human right in this country. We see the really curious claim that ‘the Health and Social Care Act 2012 abolished and dismantled the NHS in England.’ The million patients who are being looked after by their GPs, in A&Es or as hospital outpatients, let alone the 1.3 million staff who are working in the NHS today, will find it a curious claim that the NHS was in fact abolished four years ago.”
I am grateful to Simon Stevens for giving us a bit of historical perspective on some of those claims, which have been doing the rounds for 20 years or more.
Let us move on to some respected, independent observers of the health scene. Those who follow health will probably agree that one of the most respected is Professor Chris Ham of the King’s Fund. On 6 March he said to the Health and Social Care Committee:
“If you look at what is happening in the partnerships—places such as Salford, Northumbria, Wolverhampton, Yeovil and south Somerset—there is absolutely no evidence of privatisation. These are public sector partnerships based on collaboration between NHS and local government organisations working around their populations and places.”
Mike Amesbury (Weaver Vale) (Lab)
Equally, I have some information that was released to The Independent under a freedom of information request, which states that the Royal Marsden in London had an income from private patients in 2010-11 of £44.7 million. By 2016-17, that had risen to a massive £91.9 million—a rise of almost 105%. That clearly demonstrates that there has been a considerable rise in the private income of that world-leading NHS hospital.
Andrew Selous
I am not aware of where exactly that income came from. The Royal Marsden is a world-leading hospital; perhaps some of that was from foreign patients who had come to the United Kingdom and would not have been entitled to NHS care.
Professor Chris Ham of the King’s Fund went on to say:
“In some of these areas”—
sustainability and transformation plan areas—
“we are actually seeing previously privatised services coming back in-house.”
I will not quote any more from that session of the Committee, but Nigel Edwards of the Nuffield Trust and Professor Katherine Checkland, a professor of health policy and primary care, gave evidence—much respected, independent witnesses who also agreed with Professor Chris Ham.
I have to say to Opposition Members that a number of Labour MPs have a slightly different take from some of the remarks that have been made today. The right hon. Member for Exeter (Mr Bradshaw), who serves with me on the Committee and is a former Health Minister, said in question 24 of our session on 27 February:
“The other advocates of these integrated models are not just people such as Chris Ham”—
of the King’s Fund, who I have just spoken about—
“but people we have spoken to on the ground, trying to deliver a service for their local population. First, it helps them overcome the purchase-provider split, which has already been referred to, and, secondly, it makes it less likely that they are going to be private contracting.”
A lot of the accusations have been around for a long time. It is important that we look at what happened to those previous accusations: did they have a basis in fact? Often, that was not the case. Let us just be fair, because to me, STPs are about taking a sensible approach to integrated place-based care to join up health and social care and to get the world-class health service that we all want to see.
Graham P. Jones (Hyndburn) (Lab)
It is a pleasure to serve under your chairmanship, Sir Graham. I thank my hon. Friend the Member for Hartlepool (Mike Hill) for introducing the petition and the petitioners for instigating a very worthwhile debate.
I will speak briefly, because I know that many Members want to speak, about fragmentation, accountability, privatisation, and how the NHS in Lancashire is going backwards. We will hear from across the United Kingdom —or certainly England—about the fragmentation of the NHS. It is not providing the services that patients expect.
The Health and Social Care Act was introduced in 2012. It was a top-down reorganisation, although it was promised that it would not be, that cost £3 billion and has caused chaos in Lancashire. That was a promise made by David Cameron that he broke. It has fragmented the NHS: we have lost accountability, we have opened the door to privatisation and we have reintroduced the purchaser-provider competition, which has been mentioned. In the 1990s, that was implemented in social care—it failed, and there was a U-turn.
In Lancashire, we have the high-profile case of Virgin Care’s £104 million contract signed by the Conservative Lancashire County Council, which has been blocked by a High Court judge for reasons of “considerable cost and disruption.” We are seeing the fragmentation of our NHS through the desire to privatise and move towards the purchaser-provider model. There has also been the removal of the Lancashire Care NHS Foundation Trust from Calderstones. The trust has been involved in taking up contracts and being relieved of contracts. The Walton jail mental health service unit is in crisis. It is an important service because we are trying to tackle the issue of mental ill health, yet there is a significant problem at Walton jail. Lancashire Care NHS Foundation Trust picked up the contract from somebody else, but it is struggling; it is underfunded, and the provider keeps changing. That fragmentation is having an impact on those who require these services.
At Calderstones, there was a very large mental health unit on the fringes of my constituency—in fact, it was just inside the constituency of the hon. Member for Ribble Valley (Mr Evans). The unit was rebuilt in 2007, costing £11 million, to provide a cutting-edge mental health service. It was rated “good” by the Care Quality Commission, but it was closed in 2016. How can the £11 million Calderstones unit, which was rated good and moving towards outstanding, be closed in this age and only nine years after that refurbishment? Calderstones Partnership NHS Foundation Trust itself will cease to exist, to be replaced by the Mersey Care NHS Foundation Trust, which will provide services. One service provider is being swapped for another. We are not getting continuity, and there are problems in NHS services, particularly mental health services, in my area.
The public want to say no to the Health and Social Care Act—they do not like these changes. GPs were told that they would hold budgets; I will come to that, but first I want to talk briefly about STPs. Again, there is little democratic involvement; the changes are being ushered in across the north-west and across Lancashire.
Kevin Hollinrake (Thirsk and Malton) (Con)
The hon. Gentleman mentions what the public want; is he aware that a slight majority of the public are in favour of third-party private providers providing care in the health service, as long as they demonstrate better value for money?
Graham P. Jones
I think the public are primarily concerned not with better value for money but with better healthcare, and they are not getting it.
Paula Sherriff
Going back to my hon. Friend’s point about fragmentation, the service I worked in had pathways to the acute trust, so that if somebody came to us with something that looked malignant, we could refer them to the acute trust and the patient would have an appointment within two weeks. When Virgin took over the service, there was no aspiration or desire from the people at the top to create those pathways, so the patient had to go back to the bottom of the waiting list. Ultimately, it is a lose-lose situation for patients.
Graham P. Jones
My hon. Friend makes a powerful point and states the case well. My caseload of NHS issues is rising, and often they are about the gaps in service because of that fragmentation. Sometimes it is about poor service, or privatised services that are not providing what people once received when they were under the NHS. It is a complete disaster for my constituents; I have yet to meet a constituent who says that the changes since 2012 have improved the health service and are for the better. Everyone who comes to me—from all parties, of all types and from all walks of life—says exactly the opposite. The fragmentation, the lack of accountability and the cuts need to be looked at again. Healthcare inflation is outstripping the money going into the NHS, resulting in cuts and the STPs.
We are getting a different provider model for our local walk-in centres—it is starting to be swapped again. Our centre is a much-valued service but it is being closed, despite 23,000 people signing a petition. Its 42,000 patient visits will be transferred somewhere else—perhaps off to the second busiest A&E in the country. At the same time as all the fragmentation and chaos, we found out this week that in Clitheroe, the out-of-hours GP service is about to be closed, with patients being told to go to Accrington.
The fragmentation of our NHS is a complete and utter disaster. We are trying to outsource and privatise services or shift them to another trust and shuffle them around to try to save some money, but that will not save money. A patient visit at Blackburn A&E costs £120; it costs £60 at the walk-in centre. The change is a false economy. We shift more patients at the walk-in centre, but it is going to close. Where in all this is a system that is not fragmented, that is holistic and that thinks about the patient and puts them first? I completely agree with my hon. Friend the Member for Hartlepool: it is about time that we revoked section 75 of the Health and Social Care Act.
Gillian Keegan (Chichester) (Con)
It is a pleasure to serve under your chairmanship, Sir Graham. I thank the hon. Member for Hartlepool (Mike Hill) for introducing the debate. It is important to get the facts out in the open and to ensure that erroneous arguments about the use of third-party companies in the NHS are put in context and understood. It is also important that the 1.3 million people who work in our NHS are assured that they will continue to do so and that they are not about to work for a private company.
We have all turned to the NHS for help at one time or another, and I think it is safe to say that we are all proud of our doctors, nurses and community carers. However, our healthcare system, which is regularly rated the best in the world, will have to adapt as we all demand more from its services. This change may include the use of third-party companies—they are already used to build our hospitals and sometimes to transport patients, or in key services such as dentistry and GP practices—all of which are private.
The NHS faces significant challenges. In tackling them, we must adopt a collaborative approach among all sectors to ensure that patient outcomes remain the driving force and that the health service remains a patient-first system. My right hon. Friend the Health Secretary recognises that better integration of health, social care and community care services is a big part of improving our health system. If we achieve more integration, we will improve services, save money and reduce some of the fragmentation that was referred to, which is a function not of who runs the service but of how the system is designed.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Does the hon. Lady not recognise that if parts of the service are in competition with one another for their financial survival, it is very difficult to integrate them and that that causes fragmentation?
Gillian Keegan
I recognise that as a challenge. It is not just competition but organisational ownership—organisations sometimes want to control things themselves. We certainly saw that in West Sussex when we tried to put together two public sector pieces under an accountable care organisation. At the moment, we are going to have to find a different model to do that. That is not to do with finances or competition, although that can occur; it is to do with the will of the leadership to work in a more collaborative way. I accept that we face many challenges in the future that we must go towards.
Integration has a worthwhile prize: improved services that are delivered more effectively. When I served as a governor at my local hospital, St Richard’s, I saw at first hand acute beds being occupied by patients who, in medical terms, were perfectly fit for discharge but who still needed care. There were not sufficient community care services for patients to be discharged to. That situation would be exacerbated if private community bed options were removed as a result of petitions such as the one we are debating.
It has been the ambition of all major political parties to implement a modern health model that is fit for purpose and fully integrates community and acute care, but I think we can all agree that, despite our best intentions, that is easier said than done, for some of the reasons we have discussed. It is like someone trying to change the tyres on a car while they are driving—it is difficult because the system is operating.
In my constituency, we have capitalised on the support offered by this Government, such as the public health grant and the better care fund. West Sussex County Council is working on preventive action. Chichester is home to one of seven wellbeing hubs across the county. That hub, which is run by the district council, supports people one to one to reduce their risk of developing diseases such as heart disease, cancer and type 2 diabetes through sustained lifestyle changes. It helps people to lose weight, to be more active and to develop techniques to reduce their risk of falling, to name but a few things. Those services are provided in conjunction with local community and voluntary organisations, and with third-party companies, which provide a wealth of different expertise.
More than one quarter of my constituents are over 65, so adequate social care integration is vital. West Sussex County Council, in partnership with Coastal West Sussex CCG, has connected local authorities, GPs, voluntary and community sector partners, third-party companies, primary care services and our community foundation trust to form two local community networks. That list spells out some of the complexity there is even today, with many services delivered through the public sector. Those networks divide the more populated south, where there is a city, and the more rural areas in the north, recognising that needs are different in each locality. A social prescribing project has been formed as part of that work: a team of community referrers will be co-located in GP practices across the district to find community-based solutions to non-clinical issues.
The charitable sector is heavily involved in the delivery of many of our healthcare services. I recently visited the Sussex Snowdrop Trust, which works with children who have life-threatening illnesses and is funded in part by the NHS and in part by charitable donations. Its nurses give specialised care at home and teach parents how to care for their seriously ill children. The impact of its work is clear, and we should not underestimate the importance of working with such specialist community partners. The corporate structure of those partners is less relevant than the importance of the work they do. The Government have set out not only to better integrate the entire healthcare system but to allow local commissioners to dictate health provision to suit their populations. In cases such as the Sussex Snowdrop Trust, which provides specialist local services to a very small and specific portion of the population, the outsourcing funding model is effective and provides an invaluable service to families.
I fully support the work that is being done by local authorities in Chichester. They have already put plans in place to tailor services to different parts of the population—rural and urban—with different needs, and to focus on prevention and adult social care, in line with the Government’s five year forward view. Those changes are long overdue and will take time to bear fruit, but they are key to achieving a truly integrated health service. Being overly prescriptive about who can be involved in delivering services would limit options as we move towards integrating health and social care, using technology more widely and placing a bigger emphasis on preventive treatment, much of which will be new. It is important that the right level of patient care is delivered quickly and efficiently, and that it is free to all citizens who need to rely on our wonderful health service.
Faisal Rashid (Warrington South) (Lab)
It is a pleasure to serve under your chairmanship, Sir Graham. I congratulate my hon. Friend the Member for Hartlepool (Mike Hill) on bringing the petition forward for debate.
I thank the 237,462 individuals who signed the petition and gave us the opportunity to raise the issue of NHS privatisation, which is important for many of my constituents. I know that the same is true for all Members present. The petition was signed by 442 of my constituents, and I was proud to join 200 of them outside Warrington Hospital in February to protest against NHS privatisation. The level of public concern about this issue shows just how important the NHS is to our country and its citizens.
The NHS is our most sacred and treasured institution. It was founded 70 years ago on the fundamental principle that everyone is entitled to free healthcare, and it does not discriminate on the basis of wealth, gender or race —it does so only on the basis of need. Every day, thousands of lives are saved by NHS staff at NHS hospitals, and we are extremely grateful for their extraordinarily hard work. The Government have a duty to protect the NHS and its staff, and to ensure that they can continue to provide world-class healthcare to the British public, free at the point of use.
We all use the NHS, and we all have a vested interest in ensuring that it is run effectively and efficiently, but let us be clear: privatisation and outsourcing do not do that.
Privatisation forces NHS hospitals to outsource vital services to private companies, which are often more interested in making a profit than helping sick people. That is a fundamental conflict of interest. The NHS has a duty to its patients, whereas private companies have a duty to their shareholders, but shareholders care about profits, and often the only way to make a profit is by cutting corners. That compromises the quality of care.
The Government claim that private sector outsourcing is good for the NHS and that it allows patients access to treatments based on the best quality of care and value for money.
Paula Sherriff
My experience is that we used to offer one-stop surgery shops, so that when patients came in they could have minor surgery on the same day. We were stopped from doing that. Patients had to come in on two occasions, and we were told explicitly by the management of Virgin Care that it was because it generated two tariffs, and made more profit. I should be interested to hear the view of those who defend the privatisation of healthcare about that.
Faisal Rashid
That supports my point, and is a great example.
The Government view of outsourcing does not reflect the reality of privatisation. Did patients receive the best quality of care from the private firm Circle when it took over management of Hinchingbrooke Hospital in 2012, making it the first privately run NHS hospital, only to withdraw from its contract two years later after it was placed in special measures by the Care Quality Commission because it had found serious failings in its emergency and medical care services? What about the 2013 Public Accounts Committee report on Serco’s running of GP out-of-hours care in Cornwall, which accused the private company of bullying employees, providing a short-staffed and substandard service, and manipulating data to hide the truth? Were patients receiving the best quality of care then? What about the imposition of financial penalties on the same company by NHS commissioners in Suffolk in 2014, after it missed key targets in its community health services contract? In 2012 Harmoni, a private provider of NHS out-of-hours GP services, having put in place an aggressive cost-cutting agenda, faced allegations from senior doctors that its service in London was so short-staffed that its patients were unsafe. I could recount many more examples of failed healthcare privatisation, but we do not have time.
The Government also claim that outsourcing allows the NHS to save money, but that is not necessarily true. The process by which private companies bid for contracts allows them effectively to cherry-pick the most profitable forms of treatment—usually low-risk elective surgeries. That allows the private sector to benefit from the predictable, and usually low, cost. That is far from providing the best quality of care for patients.
Why, then, do the Government insist on continued NHS privatisation? Since 2010, under successive Conservative-led Governments, the private sector’s involvement in NHS services has more than doubled. Evidence shows that that has seldom made the situation any better for staff or patients. The NHS is in crisis. Chronic underfunding compounded by a growing and ageing population has put an unbearable strain on the NHS and resulted last year in yet another winter crisis. My local NHS Trust, the Warrington and Halton Hospitals Trust, is on track for a forecast financial deficit of £16.8 million, and in December 2017 only 73.8% of A&E patients were seen within four hours, which is well below the target. Yet the Government’s only answer to the crisis is more privatisation.
Let me review the facts. Privatisation is bad for quality, budgets and the NHS. More privatisation is not going to help the NHS. The only way to help it is to give it the funding that it needs and that it has been telling us it needs. If we truly love the NHS, we will stop privatisation.
Richard Graham (Gloucester) (Con)
Perhaps we should start with what we agree on, which seems to me fundamental for all of us in Parliament: the NHS is more precious than perhaps any institution except our monarchy and democracy. We all agree that it is and should remain a public institution available to everyone, no matter what they earn, and free at the point of delivery. We absolutely agree on those tenets of the NHS and the health services that our constituents benefit from. However, there are also things that we disagree on.
I suggest that the debate has frankly more to do with imminent local elections in London and elsewhere than with the health of the national health service. It is at least the fourth time in my short eight years in Parliament that the left, or some of the left, have tried to weaponise the NHS. When I hear Labour MPs talking as the hon. Member for Colne Valley (Thelma Walker) did about the “dismantling” of the NHS, I say to them that if the Conservatives had ever intended to privatise the NHS it would have been done by now, for the Conservatives have been the party of government for much longer than Labour since 1948. Secondly, privatisation of the NHS has never been in a Conservative manifesto. I defy any Opposition Member to find a single Conservative Member of Parliament who would want it, although it is normally possible to find one MP to sign up to most things. There is a challenge to Labour MPs, and particularly to those new ones who have known only the right hon. Member for Islington North (Jeremy Corbyn) as their leader. If anyone really believes that real privatisation is anything more than a fantasy threat, I ask them please to go and find a single Member of Parliament from the Conservative party Back Benches who would support it.
Stephen Pound (Ealing North) (Lab)
I have huge respect for the hon. Gentleman and have come to admire him over the years, but clearly he has not visited a hospital lately and seen privatised portering services, privatised catering services, privatised nurses being provided by privatised banks, privatised doctors being provided by privatised agencies, and patients being delivered by privatised hospital car services. I suggest he should pop down to Ealing Hospital while it is still standing. I will show him the true horror of privatisation. It is prevalent, endemic and everywhere.
Richard Graham
That is an interesting point, but the hon. Gentleman may not be aware that I volunteer in my local hospital, and have done for the past eight years. I have not only seen porters in action; I have worked alongside them—and ditto for a variety of wards. The situation he paints about what goes on in Ealing is completely different from what happens at the Gloucestershire Royal Hospital in my constituency, where those services are carried out by employees of the NHS—and will continue to be, whether they are in a subsidiary company or not—effectively and well. I pay tribute to all four of the NHS trusts in my constituency, one of which, Gloucestershire Care Services, received a good rating, alongside the already highly rated 2gether mental health trust. I shall put that issue to one side, but the hon. Gentleman is a distinguished Member of the House and knows better than to scaremonger about privatisation. Real privatisation is what happens in America, as he knows. It does not exist here in the United Kingdom.
The narrative today is, I am afraid, about scaremongering, with the favourite Labour bogeyman, privatisation, to the fore. There is one sentence from the petition that in a sense gives it away:
“Companies should not be profiteering from NHS contracts”.
The logic of that is that every single provider of equipment or services to the NHS, from pencils to EpiPens to imaging machinery to software, should do so at a loss. They should not. It is crucial that businesses make profits, invest and innovate for the future, reduce paperwork, increase scientific solutions to all sorts of difficult health issues and improve the life chances of our constituents. The opposite logic, of businesses making no money at all and going bankrupt, and the state trying to do everything, has been tested to death—literally—in both Russia and China. If Opposition Members, as socialists, want to understand why China has been so successful, I commend to them joining my all-party parliamentary China group, to visit China and understand what socialism with Chinese characteristics looks like and means.
Graham P. Jones
I hope the hon. Gentleman takes up the opportunity to visit Ealing Hospital. He argues that this is not the USA, but that is not the point being made. Of course the current NHS is not the US healthcare model. Does he accept that we are not privatising purchasers with insurance policies, as in America, but that what is happening in the United Kingdom is the fragmentation and privatisation of providers? That is the issue we are discussing. Does he agree?
Richard Graham
I thank the hon. Gentleman for his comments. That is part of an issue that he is certainly keen to discuss, and part of what is in the petition.
The point I was going to make, which is relevant to that, is that there is a difference between sensible, profitable and innovative businesses and profiteering. There has been, in my view, one clear example of profiteering taking place in the NHS since 1948. It came with the private finance initiative policy during the new Labour period of Blair and Brown, which brought capital into the NHS that was off balance sheet and not recorded in the public finances, at exorbitant cost. It saddled hospitals around our country with interest rates that they could not afford to pay back, and it was the Conservative-led coalition Government who did what was legally possible, although not as much as any of us in this House would wish, to dismantle those contracts.
I think I am right in saying that we took out about £2 billion of costs a year by renegotiating the PFI contracts that could be renegotiated—somebody may know the precise figure. Opposition Members, some of whom were here at that time, should be ashamed of their complete responsibility for introducing the only obvious example of profiteering that has happened in the NHS since it was created.
Paula Sherriff
I wonder whether the hon. Gentleman is attempting to remove the architect of privatisation within the NHS, who I understand was Sir John Major. I agree with the hon. Gentleman about PFI; there have been some arrangements where it is difficult to argue that value for money is being achieved. But we must remember history, and it was Sir John Major who introduced the PFI scheme.
Richard Graham
I am happy for the hon. Lady to correct the record on John Major’s introducing PFI, but the point about PFI and all private financing is that the devil is in the detail. The principle of bringing private finance into the public sector is fundamentally a good one and approved of by, I think, all major parties. I am afraid that what went wrong during the 13 years of new Labour, as she knows and has implicitly agreed, was rampant exploitation of the NHS, with public servants signing agreements that frankly should never have been signed.
That is in the past—the fairly recent past, but the past. We have moved on since then. Since the petition was written, other things have also moved on. The most important is the issue of pay, with the Government committing several billion pounds from taxpayers to give 1.1 million NHS staff significantly higher pay over the next three years. I think we all strongly applaud what has happened—we know what an enormous job the NHS does in all our constituencies.
I will briefly raise what matters more in the longer term about the NHS, a subject that this petition could have tackled. The real issue is the long-term funding of the NHS. As a nation, we cannot lurch from year to year with the Secretary of State for Health and Social Care effectively going cap in hand to the Chancellor of the Exchequer for more cash to bail out the NHS. We need a longer-term, agreed basis on which to fund the NHS; I suggest at least five and ideally 10 years, so that everyone can plan ahead on what is needed to fund our NHS, with cross-party consensus. That way, never again can we face a situation in a general election of leaflets saying, “24 hours to save the NHS”. It is an old bogeyman that we must do away with.
I believe that the only effective way to do that is by bringing in equal contributions from the self-employed as well as the employed, and from those still generating income over a certain limit in retirement, through a dedicated source of funds or a hypothecated fund. The most obvious of those is national insurance, which does not really insure anybody for anything. It should be renamed the NHS fund. I put that proposal to our party before the last general election; understandably, there was not really enough time for it to be seriously considered. It would be a major change of direction and one not entered into lightly. There would be huge challenges with it. For example, what would we do in times of high unemployment, such as 2008 to 2010? Could the Budget effectively top up the NHS fund in such times?
That is why I am so pleased that the King’s Fund is researching that very issue now—would it be possible to have a hypothecated fund to fund the NHS? Would national insurance be a good starting point? What sorts of hazards and potential would that throw up? The King’s Fund report will be an important guide to hon. Members on both sides of the House about whether we can look at having a serious, long-term source of funding for the NHS around which we can have consensus, so that some of the endless debates and arguments, particularly around the word “privatisation”, can be dealt with and we can know that we have a source of long-term public funding for our NHS.
That is where I wish to finish. I regret attempts by some Opposition Members to try to create differences between political parties on something as precious as the NHS. All of us—all our families and all our constituents, wherever we were educated, whatever sport we like, whatever job we have and whatever sort of retirement we have—depend on the NHS for our health and, I contend, for our care as well. That is the other reason we need to find a hypothecated source of funds for the NHS—so that it can deal with care as well. That is a subject that the Health Secretary is wrestling with in his Green Paper as we debate. That is why in today’s debate we should leave the partisan efforts at point-scoring on privatisation and focus on what we can all contribute to the bigger debate about a long-term source of funding for a fully publicly owned NHS.
Dr David Drew (Stroud) (Lab/Co-op)
It is a delight to serve under your chairmanship, Sir Graham. I thank my hon. Friend the Member for Hartlepool (Mike Hill) for introducing the debate. It is an interesting opportunity to make some comments, perhaps sandwiched between two other Gloucestershire MPs. I will not say that is a delight, but there is much wisdom in what the hon. Member for Gloucester (Richard Graham) says.
Sadly, I have always believed that the NHS has been a party political issue from its very start. However, there is some ground for consensus on properly funding the NHS. There may be some disagreements about how we achieve that, but we have to lay down the ground by which we might know what we should fund, which of course includes the care service.
I intend to make a brief speech that is really only about subsidiary companies, because that is particularly apposite to us in Gloucestershire. However, I make one rejoinder: we actually defeated the PFI deal in Gloucestershire. We were offered one, but I thought it was very bad value for money, and I was one of those who spoke out against it. I think we did the right thing. We now have two fit-for-purpose hospitals, even though to get to this stage we have had to go down a pretty rocky road.
I will devote my comments to the setting up of a subsidiary company in Gloucestershire, about which the hon. Member for Gloucester made an aside. It was something I opposed, because I felt that it was the wrong direction to go in. More than anything, I felt very strongly that it was not properly scrutinised. It is the only time I know of when there has been a major change in the structure of our hospital provision in Gloucestershire, including to staffing, and the public and their representatives—including the health and care overview and scrutiny committee, which was effectively told to take its nose out of its interest in the change—have been excluded from the consultation.
The big change is that up to 700 members of staff will be taken out; there is an argument about exactly how many. I have met the chair and the chief executive of the trust, and I know why they have done it. It is about money and about trying to make good the real funding shortfall that has affected us in Gloucestershire because of the deficit that we have built up over quite a long period of time, and which we at least have to be seen to be talking about.
I will concentrate on a number of issues. I hope the Minister listens, because I will ask him several questions specifically about where we will go as a result of the changes. I resent the fact that representatives from Gateshead Health NHS Foundation Trust are going around the country as snake oil salespeople and telling trusts how they can save money. I and other Members have asked parliamentary questions on this subject, and my first question to the Minister is this. Can we have it on the record that the setting up of subsidiary companies will not be financed by some sort of VAT exemption? That is where the proposal initially came from. Although I have had assurances from the NHS, the Health team and the Treasury, the message does not seem to have gone back to those who still propose the idea. Can we have it on the record that there will be no VAT opportunities because of these new so-called subsidiary companies, in Gloucestershire and elsewhere in the country?
The second point I will look at is where the benefit of this change will be. I would have liked to see the full business case, but we were precluded from seeing it. We saw, dare I say it, a fairly anodyne version that looked as though it was all things to all people, but that did not really say how the change would be better—initially for the staff but also for the people of Gloucestershire—given that a large number of staff who worked for the hospitals trust are now in a different company.
Does the change preclude tendering? One of the advantages sold to the staff was that they would not have to face any tendering, because they would join a subsidiary company that was part of the NHS but that was necessarily different from the NHS because of the changed terms and conditions. My second question to the Minister is: is that fair, or could this company at some future date be passed over—I will not say sold on —to A.N. Other, who could be either a not-for-profit third party or, dare I say it, in the private sector? That would suggest that this change is not much of a defence against tendering.
The third issue I raise is that our hospitals trust—I say our, because there are three Gloucestershire Members here—finds it difficult to recruit, and faces a lack of money. There is also an element of desperation, rather than innovation. My third question to the Minister is: if, as I am led to believe, there will be a major pay increase for ancillary staff of as much as perhaps 15% over the next year, how can that be squared with other changes that will come further down the line?
My worry is that we—the proverbial we—have sold people an idea that they can get more money now and it will not affect their future prospects, yet we know from what has been suggested that it will have an impact on pensions. I know we do not have an NHS pension scheme any more; there is a series of NHS pension schemes, some of which are much more generous than others. However, it seems that those who are now in a subsidiary company must end up with a worse scheme, because how can they have a 15% pay increase and the same pension provision as those in existing pension schemes? It is the same for job protection and some other elements of the way in which the NHS looks after its workforce. I know the Minister is a fair person—we have discussed things privately—but I genuinely do not understand how this will all add up.
I worry that we are offering people something in the short run that may be beneficial and may get them out of working in supermarkets and into working in the NHS—that is a good thing—but, worryingly, they may come out of working in the care sector to work in the NHS, and that will not solve our problem. Our problem is that there are a lot of staff who are underpaid and very mobile, and we need those people to be brought into the NHS, to stay with the NHS and to be secure in the NHS.
My last point is one that I am, if you like, quizzical about. Gloucestershire’s sustainability and transformation plan, which has now been published, was seen as the overarching way in which our NHS would develop. However, all these changes, including the merging of two trusts—a mental health and learning disability trust and a community trust—and the setting up of the subsidiary company, happened in advance of the implementation of the STP. What is the point of the STP if many of the changes have already been made? It would help me when I am talking to my constituents, who feel quite worried about what is going on, to know what these things genuinely mean and what they will result in. At the moment there are a lot of questions but very few answers.
I do not want to see fragmentation. We can make the argument about privatisation, but fragmentation weakens the bond that the NHS is about. It is the national health service, delivered free at the point of use to constituents in the various parts of the country, including Gloucestershire. At the moment, however, we seem to be seeing further fragmentation, which may lead to all sorts of risks.
The answers to my questions have not come forward. That may be because we did not have a consultation; that was wrong. We should have had a full-blown consultation so that these questions could have been asked, not just in Gloucestershire but elsewhere in the country in the places that have been mentioned. It is our duty as parliamentarians to make sure that we ask those questions and to try to get the answers.
The Minister has heard what I have said. I could go on about other aspects of the healthcare system in Gloucestershire, but the subsidiary company is of primary concern at the moment. We have one in Gloucestershire. We do not know who will run it, how it will be run or what the future implications are. If the Minister hears what I am saying and can answer some of those questions, it would help us in Gloucestershire and people much further afield.
Kevin Hollinrake (Thirsk and Malton) (Con)
It is a pleasure to speak while you are in the Chair, Sir Graham. I add my congratulations to the hon. Member for Hartlepool (Mike Hill) on his introduction of the debate. May I start by clarifying a point in his opening remarks? He conflated, I think, paying for healthcare and outsourcing, which to my mind are two completely separate things.
Let me explain something that informed my thinking on this subject many years ago. When my son, who is now 21, was only one, my wife and I went to Menorca as new parents, and our son took ill on the last day, after a lovely week there. He deteriorated quite badly in the middle of the night, and we were told by the doctor to take him to a hospital. We went to a lovely, shiny steel-and-glass hospital and rushed him in. By the time we got to the hospital, he was barely breathing, and new parents panic so much in those situations. We carried him to reception, thinking that he was only a few gasps from passing away, and we were asked, before they treated him, to present our credit card. We waited for 20 minutes while that was dealt with, and those were the longest 20 minutes of our lives, so I think that any Government Member or, indeed, anybody in the Chamber today who would consider moving the current system from a system of taxpayer-funded care to one in which people pay at the point of delivery would be misguided, to say the least.
This debate is not about whether we pay for care, and let us be clear: healthcare in this country is not free; it is taxpayer-funded. But the foremost principle—the foremost thing we must get right—is what is in the best interests of the patient. That is the principal thing that we should be discussing. The second thing that we should be discussing is what is in the best interests of the taxpayer, who funds the care of all the people who need care in this country. The third thing is who provides that care. This is patient first and certainly profit second. No ideology about private sector interest or involvement, or purely public provision, should get in the way of that. This debate should be about how we deliver the best service most effectively and efficiently. The question we should be asking today is how we provide a world-class service to get the best outcomes for patients and the best deal for the taxpayer.
To me, what the evidence points to is clear, despite the very good points that Opposition Members make about fragmentation. I accept that there are at times problems with commissioning that we need to resolve and get right, but to me a blend of public and private sector interests—a partnership between the two—would provide the best outcomes. Indeed, a report by the World Health Organisation emphasised the value of competition and the incentive structures of private organisations as spurs to good performance, while recognising the need for a public role in resource allocation. That, to me, says everything about how we should manage our health system.
As has been said, there are a number of different private providers. I do not think that anybody is arguing that GPs, for example, should not be involved in our healthcare system, or community care or residential care, and they are all private sector providers. It is also fair to point out that the rate of growth for private sector provision over the last seven years, since the coalition Government of 2010, is very similar to that for private sector provision before that time. This issue should not be party political; those are the facts. The figure went from 2.8% in 2006-07 to 4.4% in 2009-10 and then, I think, to the current 7.7%, so the rate of growth is very similar. Those facts are from Full Fact, which is an independent fact-checking organisation.
Mike Amesbury
Does the hon. Gentleman agree that the great battle of ideas in the past resulted in something that seemingly we now all take for granted and claim to love—the NHS? Historically, the NHS was opposed; in fact, it was opposed 22 times on a three-line Whip by the Tory party, so the idea of the NHS, which is free at the point of delivery and based on need, is of course politically driven. My political party helped to create the NHS. It was a key driver in that and will certainly save and grow the NHS.
Kevin Hollinrake
I agree with that point entirely. We all love the NHS and respect so much the work of the people who work in that service, so congratulations on the fact that Labour introduced the NHS, but that is not the point. This debate should not be about ideology; it should be about what works.
Richard Graham
Just on a point of fact, about two weeks ago it was the anniversary of the first White Paper on a national health service, which was presented to Parliament by the wartime Conservative Health Minister, Willink. The thinking behind much of that came of course from civil servants, of whom Beveridge was undoubtedly one of the more important, and he was a well known Liberal. I therefore suggest to my hon. Friend that before conceding the historical point, which we should accept absolutely, that bringing the national health service into being was a Labour achievement, we should point out that there was in fact a huge amount of cross-party consensus, particularly during the war years, in the lead-up to the birth of the NHS. It is important that we all recognise the contribution of all parties in its origins.
Kevin Hollinrake
I am very grateful for that historical clarification. One thing I used to say in my business to any people who came to me with new ideas was that ideas are 10 a penny. What matters is how we implement things. What matters is how we implemented things then and how we implement things today. That is what makes the critical difference in whether something will succeed or fail.
Rachael Maskell (York Central) (Lab/Co-op)
I am grateful to be able to make an intervention, but will the hon. Gentleman not recognise that the Lansley reforms, which brought in a new funding formula, have completely broken the NHS? I am talking not only about the fragmentation, but about the fact that the funding fights against itself, and therefore it is a complete distraction from providing a planned NHS service, which is the solution that is needed in the system.
Kevin Hollinrake
I am grateful for the hon. Lady’s intervention. I absolutely think that funding needs to be fair. There are certain instances we can look at as to whether the funding for certain CCGs in York and north Yorkshire is unfair. We need to ensure that the funding is got right wherever people are. It is incredible that we have a postcode lottery for healthcare in this country; things differ in different parts of the country, based on many of those issues. They are issues that we absolutely need to resolve.
Kevin Hollinrake
May I make some progress? I have taken three or four interventions in a row.
Dr Whitford
I thank the hon. Gentleman for giving way. During the 33 years that I spent working in the NHS, the main aim was to get rid of postcode prescribing. He must recognise that the CCG system enshrines postcode prescribing.
Kevin Hollinrake
As I said, there are concerns. I have concerns: some of my constituents have difficulties. The overall quantum of healthcare funding—I will return to this at the end of my remarks—is putting pressure particularly on rural areas that I represent. We need to tackle a number of different issues. With regard to the future of healthcare funding, my perspective is similar to that of my hon. Friend the Member for Gloucester (Richard Graham): we should be working on a cross-party basis to deliver the solutions.
In terms of private or public, the public are absolutely behind the point that they have no preference. A greater number of people express no preference, in terms of a private sector or public sector provider, as to who provides their healthcare. Yes, of course the public are massively in favour—89% are in favour—of a taxpayer-funded healthcare system, but on the question whether the care should be delivered by private or public providers, it is a very different picture.
Stephen Pound
The hon. Gentleman has been extremely generous in giving way. I am reluctant to wander too far down memory lane, but when the NHS and I were born at the same time, in July 1948—[Laughter.] Two great institutions, both in need of considerable support! The NHS was born out of compromise. I spent 10 years working in the Middlesex Hospital. We had a private patients wing. The entire GP facility within the NHS has been private. GPs have always been self-employed. There has been compromise. The issue is not the fact that there is a compromise and private practice within the NHS, but the fact that there is a creeping expansion of privatisation, which my constituents and, I would suggest, those of every right hon. and hon. Member here feel is corrosive to the heart of the NHS. Yes, there is privatisation within the NHS, but we have to stop it. We must not expand it. We must return to core principles.
Kevin Hollinrake
It is only corrosive if it is not in the patient’s interest. There are clear commissioning rules that it must be in the patient’s interest for this commissioning to take place. The key is what is right for the patient. I do not doubt that the hon. Gentleman may be right that some of the commissioning is wrong, but whether it is private or public should not be the overriding principle; it should be what is right for the patient.
Kevin Hollinrake
I will make some progress, having given way a number of times. Some years ago, when I first became an MP, I met the chief executive of York Teaching Hospital Trust, Patrick Crowley. He talked about the fact that private providers are providing care in York—in the hon. Lady’s constituency—just as they are in my constituency. He was very comfortable with the relationship between the public sector provision at York Hospital and the private sector provision at Ramsay Health Care, where I have experienced treatment. It was incredibly efficient, and the people I spoke to who worked for that organisation spoke very highly of it. There should not be this ideological rejection of the private sector.
I want to make some key points. According to The Health Foundation’s report, more than 50% of people said that the NHS often wastes money. That is not a criticism but a reality in an organisation with 1.7 million people working for it. The way to try to reduce waste—again, this is our responsibility to the taxpayer—is to ensure that we eliminate it wherever we can. The public sector does a brilliant job in the NHS. I am not calling that into question. However, in my view, good businesses—I have been in business all my life—can have a positive impact on healthcare provision. Good businesses focus on the customer first, and therefore the patient first. They make the most of their most precious resource, which clearly is their people. They are good at innovating and reducing waste, and they should deliver at the best possible value. After all those things have been taken into account, a good business should then consider whether it can still make money, and if it cannot it should not enter that field. The principle should be what is right for the customer, or the patient.
I met one of the nation’s most successful and prominent business people, who told me—to illustrate how we can drive out waste and bureaucracy from a service—that he was approached in 2007 or 2008 by Tony Blair and Gordon Brown and asked to look at reshaping the health service to make it more efficient. He came back to them and said that he would be prepared to take this project on. He said that the first thing he wanted to do was to give all nurses a 30% pay rise—this is a private sector business man; I am not saying that Brown and Blair were going to privatise the NHS—but that he wanted no more money from central Government. He would put matrons back on the wards. He would put in a clinician-first approach, with admin and management second, and strip away the bureaucracy, which must be music to the ears of every nurse and doctor working in the health service. He planned to reduce admin and management by 20,000 people. He was also going to look at the purchasing system in the NHS.
Clearly, the private sector can look at these issues and drive out waste in whatever capacity as long as it is in the interests of patients. Waste in purchasing is a key element. John Abercrombie, the consultant who looked at purchasing in the NHS, established that one trust was paying £126 for a wound protector and another was paying 36p. There clearly are private sector providers that could come into this sector and help to reduce waste, delivering a better deal for the taxpayer.
My final point is about the long-term funding settlement. I echo the comments of my hon. Friend the Member for Gloucester. We need a long-term funding settlement not just for the NHS, but for social care, because they are inextricably linked, although we need different funding settlements for the two different elements. Unless we have that long-term funding settlement, whatever we discuss today, because of demand—and more money is going in—we will just be shuffling deckchairs on the Titanic. It should be cross-party and take into account rural needs. I have constituents who have seen services centralised to the point where they have to travel long distances to access healthcare. An elderly couple in Scarborough have to go to York for treatment because heart treatment has been centralised into York from Scarborough. They do not drive, so they have to take a bus to York and stay in a hotel overnight to get to the consultation appointment on time. The quantum needs to be greater and we need to ensure that we keep delivering our services right across the country, including in those rural areas. I agree with my hon. Friend that we should look at a hypothecated tax—either direct or indirect taxation—to increase the quantum of money to a significant degree.
The Select Committee on Housing, Communities and Local Government looked at the German system of social insurance for social care, in which people make a small payment from their monthly salary on a pay-as-you-go system. When they need care, instead of suffering the catastrophic cost in later life, on the basis of an independent assessment, that support can be provided through third-party care, or they can draw down the money and pay it to relatives to look after them in their own home, which can have a positive social consequence.
We need to look at these things in detail and on a cross-party basis. I believe in a taxpayer-funded system on the basis of the best outcomes for patients and the best deal for the taxpayer, and that we should move towards a long-term funding solution, so that ultimately we can let the clinicians get on with the job.
[Stewart Hosie in the Chair]
Alex Sobel (Leeds North West) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Hosie. I thank all those who signed the petition, including the 512 signatories in my constituency. I spoke at a “Save the NHS” rally a couple of weeks ago, and privatisation was one of the top issues for people who attended that rally and spoke to me afterwards. I will make some the points I made when I spoke at that rally.
Week after week, people stop me, come to my surgeries and write to me asking why their local GP has left and been replaced by locum doctors, why A&E waiting times are increasing or why the services they rely on are verging on unsatisfactory and in some cases negligent— I have some negligence cases running. The short answer to those questions is a lack of money in the system. The more complex answer is that the decline in NHS funding has placed strong pressures on healthcare providers right across the NHS to adopt new practices and governance structures. Many of those changes have taken place beyond the public eye and without sufficient scrutiny. The benefits from those changes are far from evident. My hon. Friend the Member for Stroud (Dr Drew) asked many of the questions I had intended to, which will reduce the amount of time I will take in this debate —so I thank him for that—but that allows me to make some broader points. I support all the questions he asked the Minister. However, there is one point, which I will come to, on which I have a slightly different point of view from my hon. Friend.
The Leeds Teaching Hospitals NHS Trust, in an attempt to balance its books, has proposed to take 1,000 NHS workers out of the public sector and place them in a wholly owned subsidiary company. There was a meeting on 29 March to make a decision. After interventions by myself, four other colleagues in Leeds, the trade unions, campaigners and members of staff, there was a stay of execution on that decision and it will be looked at again. Therefore we are not quite in the situation that my hon. Friend has in Gloucestershire, where the change has already happened, but we are approaching it, which makes it all the more important for us to have the debate and to engage with the Department of Health and Social Care and its Front-Bench team. The wholly owned subsidiary company would take staff who have spent their entire career in the public sector and place them in a highly uncertain position regarding their working conditions, salaries and pensions—all points that my hon. Friend made.
A wholly owned subsidiary company structure has already been implemented elsewhere in Yorkshire—in Airedale and Barnsley—and the primary driver is financial. Once the subsidiary company is in place, it can recoup VAT and make significant savings. What is the solution? My hon. Friend suggested that the Treasury close the loophole, but my suggestion is quite different: the NHS, at trust level, should also be able to recoup VAT. Let us create a level playing field in which the NHS has the same rights and benefits as a wholly owned subsidiary company. That would effectively just be a technical change. I hope the Minister will talk to his Treasury colleagues and look at whether those same benefits can be given directly to an NHS trust.
I am not asking for that change for ideological reasons, although I have heard a lot of ideology today. Rather, I am speaking up for the porters, cleaners, lab technicians, receptionists and administrative officers who work in the trust and in other trusts that are considering going down that road or have done so. They tell me that they are motivated to work above and beyond at the trust because they are part of the NHS. They work the hours that they need to work because they are part of a family. They and their colleagues are born of the NHS—an NHS born alongside my hon. Friend the Member for Ealing North (Stephen Pound) in 1948. They do not want to be seen as a moveable commodity. They view themselves as a core part of the NHS, just as much as the clinicians. We need to recognise that.
Rachael Maskell
York Teaching Hospital is going down the same lines in creating a wholly owned subsidiary company, yet the staff want to belong to the NHS—that is their ethos and that is what drives them. It is also important for full integration across the whole service, because people who work as porters and cleaners are as much about patient care as anybody else in the NHS. Does my hon. Friend agree?
Alex Sobel
Absolutely. When I go into our local hospitals as an MP or as a patient, I see that they are the beating heart of the NHS.
I ask trusts, such as Leeds, that are considering setting up a subsidiary company to put a halt to those plans and to work with their staff, representative trade unions and local MPs prior to making the decision. I ask them to do what is best for all involved, whether patients, staff or the community.
Cost pressures create perverse incentives for people to consider privatisation. We have rehearsed that argument quite well. They affect not just NHS hospital trusts but clinical commissioning groups for primary care services, NHS England and other NHS bodies. We need to take those perverse incentives out of the system so that privatisation does not happen by the back door—instead of being done by the Government through statute—which is what is happening.
Martin Vickers (Cleethorpes) (Con)
It is a pleasure to serve under your chairmanship in this important debate, Mr Hosie. Many people who signed the petition have genuine concerns about the NHS. I make it clear from the outset, just in case my remarks are deliberately misconstrued, that I am opposed to privatising the NHS, like my hon. Friends. My family and I rely on it. I support keeping the service free at the point of need, whatever the individual’s circumstances.
We need to establish what we mean when we talk about privatisation. To me, it means what we did in the 1980s with British Telecom, British Gas and so on— selling the shares to the public. We sold their assets lock, stock and barrel and handed them over to the private sector. That is not what is happening when we talk about an individual service in the NHS being privatised.
It is important to remember that having private providers in the NHS is not new. As other hon. Members have said, there has been a role for private provision since the service was established 70 years ago, most notably in the form of GPs. Other private engagement includes businesses, charities and independent contractors.
Just under 8% of NHS spending goes to the independent sector, which is money spent on supporting NHS patients. That includes spending on elective surgery, diagnostics and pathology services, clinical home healthcare and community and primary healthcare. In many cases, private providers are used to cut waste and provide essential services, such as catering and cleaning. To use a trivial example, would the Opposition recommend that we prevent private sector companies from running the coffee shop in a hospital? If we say no to any private sector involvement, that is what we are doing. The local window cleaner could not come to clean the hospital windows. It would be a nonsense.
Stephen Pound
I respect the hon. Gentleman, but the point made by my hon. Friend the Member for Leeds North West (Alex Sobel) was about the added value brought by people who work in the NHS. When I was a porter for 10 years at the Middlesex Hospital, we finished at 10 o’clock on Saturday night and started again at 6 o’clock on Sunday morning. We worked a rotating three shift system.
The Middlesex Hospital is now a hole in the ground, but when I last went to see former colleagues from the ancillary staffs council, I was told about the agency workers who turn up to do a day’s shift. They have no emotional connection with the hospital, or any feeling for it, so they simply cannot make the same commitment. Surely the hon. Gentleman, who is far from being a fool—he is actually a humane man—recognises that some people bring an immense amount of added value by working for the NHS rather than for an agency that works for the NHS.
Martin Vickers
I agree with the hon. Gentleman. I am not arguing for privatisation. I am arguing that privatising some services improves patient care, which is surely what we are all interested in.
Dr Whitford
Having graduated in 1982, I know that the first services that were outsourced were the cleaners. That has been blamed for contributing to later hospital-acquired infections such as MRSA.
Martin Vickers
The hon. Lady is obviously very knowledgeable, as we heard earlier. I cannot compete with 33 years’ experience, although I recognise those faults and I can recall the stories of dirty hospitals, which may have had something to do with poor procurement and bad management.
However, the reality is that the private sector has a role to play. Are we seriously suggesting that we should inconvenience people by forbidding Boots, Superdrug or a supermarket from administering prescriptions? Obviously not. Should we preclude social enterprise operations from taking part in NHS services? Surely not, because they can be extremely valuable and improve patient care.
Richard Graham
My hon. Friend makes some good points. Does he agree that the hon. Member for Ealing North (Stephen Pound) makes a different argument from that of his colleagues, who argue against companies that are subsidiaries of the NHS by definition? There is a considerable difference between someone who works for an agency that works for the NHS and someone who works for an NHS subsidiary company.
Martin Vickers
I thank my hon. Friend for that timely and helpful intervention.
The King’s Fund report, “Is the NHS being privatised?”, determined that the gradual increase in the use of private providers has improved the choice and service for patients. That must be for the good of everyone. It is the patients who are important; scaremongering does not help them. A focus on process rather than patient outcomes is unwise and a distraction from the real issues. The best interests of the patient are what matters. We must ensure that as much as possible of the resources that are made available goes into patient care.
The Leader of the Opposition has made repeated pledges to “save the NHS”. Frequently, those on the left whip up hysteria about how the Government of the day are doing something that will fundamentally alter healthcare in this country and bring the NHS to an end, but when exactly have these warnings been accurate? Were they accurate in April 1997, when Tony Blair famously declared that we only had
“24 hours to save the NHS”,
or when union leaders have spoken out about the NHS? Such reports have always proved false. As was said earlier, the reality is that the Conservative party has led government for 43 of the 70 years that the NHS has been in existence, so if the aim was to destroy the NHS, we have done a pretty poor job. The reality is that the Conservative party is as committed as any other party in this House to the continuation of the NHS.
What we see is outrageous hyperbole that is designed to prey on the worries of those who rely on the NHS, which—let us face it—is virtually all of us. That is irresponsible and in some cases cruel. Furthermore, it adds to a climate in which we cannot have a sensible discussion about the future of healthcare in this country. Within our politics, there is a paranoid conspiracy theory surrounding the motives of the Conservatives in relation to the NHS. It goes something like this: “Conservatives hate the NHS for ideological reasons, but given the toxicity of the subject and the reverence with which the public quite rightly regard the NHS, they realise the only way to implement privatisation is by stealth.” That is absolute and complete nonsense.
Let us face it, there have been changes to the NHS throughout its existence. We have had mention of fragmentation; I suggest that some of the fragmentation took place during the Blair and Brown Administrations. We spend around 8% of our GDP on healthcare, which is in line with countries such as Belgium and more than is spent by the likes of Australia and Canada, which have large private sector involvement. If, as we are told, we are underfunding healthcare to undermine support for the public system, what would be the motive for the apparent underfunding of healthcare systems elsewhere? The NHS turns 70 this year and, as I have said, the Conservatives have been in power for the majority of that time. There is no masterplan to replace the NHS with a privatised alternative.
There is also the question of what we mean by “privatisation”, which I mentioned earlier. “Privatisation” is a buzzword for ideologues to spread fear and embed an inefficient system that fails patients. Is Germany a private system, or is Switzerland? The answer is no. However, Germany and Switzerland embrace the market, while ensuring that no one slips through the net.
The German system shows that a healthcare system can be fully funded in the style of a pension system. The situation in Switzerland proves that even considerable levels of out-of-pocket patient charges need not be regressive. We can trust people to choose from a range of health insurance plans and identify the best option for them. Throughout Europe, healthcare systems offer universal high-quality care that is free at the point of use. In many cases, they make use of a greater number of private providers than our own NHS.
Social health insurance does not have to clash with the principles of the NHS that are so greatly entrenched in our society. We can still have a universal system of healthcare that is free at the point of use. We may have been the first country to establish a healthcare system based on those principles, but we are no longer unique in that respect. Virtually every developed country has some form of coverage.
The United States is an outlier in this regard. Canada offers universal healthcare that is free at the point of use. Germany offers universal healthcare, and while patients there may have to pay a small amount to see a doctor—around £10—the poorest in society are often reimbursed.
Dr Whitford
My husband is German and we lost his sister at this time last year, so I can point out that actually the German insurance system covers only 80% of costs and the bills continued to arrive for about six months after her death.
Martin Vickers
I thank the hon. Lady for that intervention. My understanding, and she will correct me if I am wrong, is that that 20% of costs could be reimbursed, depending on the individual’s circumstances.
Dr Whitford
If a member of the public in Germany wants to cover that other 20%, they take out additional insurance to cover it.
Martin Vickers
I thank the hon. Lady for her intervention and for her correction, which I am very happy to acknowledge.
The debate over healthcare in this country is insular and inward-looking. It is ruined by a counterproductive tendency to pretend that the only imaginable alternative to the NHS is the American system. That is the go-to response for the vast majority of those who oppose reform. In reality, opposition to the US system is the one thing that unites us all. We can deliver meaningful NHS reform while maintaining the principle of universal coverage, as well as ensuring that the NHS remains free at the point of need.
Another area in which there has been considerable scaremongering relates to accountable care organisations. These organisations are hugely important in ensuring that patients have access to high-quality care that is orientated around their individual needs. While a different name for them would have been helpful, it is the substance that matters. Again, we are often told that ACOs are a move towards the US system of healthcare, but other than the name they have little in common with the US system.
ACOs will not alter the universality of healthcare in this country, nor will they prevent services from being free at the point of use. To suggest otherwise is dishonest and unfair on patients, and causes needless worry for those who are in difficulties and worried about their future healthcare needs. Claims that sustainability and transformation partnerships and ACOs are vehicles for NHS privatisation or the Americanisation of the health service have been refuted by all the key health organisations, including the King’s Fund and NHS England.
Only 10 days ago I visited the excellent St Hugh’s Hospital in Grimsby, which serves patients from my neighbouring constituency. It is a private hospital, but 83% of its patients are from the NHS. Ashley Brown, the hospital’s director, explained to me how private providers are held to at least the same standards as public providers, and often—as in his hospital’s case—to higher standards. Private providers are subject to the same rigorous inspections as public ones and they receive ratings from the Care Quality Commission, which holds all providers to the very highest standards. As a result, 70% of independent hospitals are rated by the CQC as “good” or “outstanding”. Furthermore, the punishments for failing to meet targets are far stronger in the private sector. I was told that if St Hugh’s Hospital missed its 18-week target for referral it would face a significant fine.
Another concern that is frequently raised regarding the NHS is about profit. We are told that no one should profit from someone being ill. However, if someone needs an urgent operation, do they actually care whether the person carrying out that operation, or indeed the hospital that it is being carried out in, might make a profit from it? They have provided the capital costs of the investment. What matters is the quality of care for the individual. As I have said three or four times, patient care is absolutely critical.
Across the UK, about 10 million NHS patients are treated by the private sector every year. If we were to remove the private sector from the NHS altogether, there would be an additional 10 million people on NHS waiting lists, which, as we know, are strained to the limit already.
People value the benefits that private provision can allow. The British social attitudes survey found that there were more people—43%—who did not have a preference between receiving care from the NHS or from a private company than people who would prefer NHS treatment. Furthermore, at a time when mental health has finally reached the top of the political agenda, it is worth noting that more than one third of acute in-patient psychiatric beds are provided by the private sector. There are calls to strip back the private sector, but that would have a detrimental effect on patients in that area.
Not enough is done to publicise the fact that patients now have a legal right to choose where they receive treatment. They can choose any NHS or private hospital in the country. If they opt for a private provider, they will not have to pay a penny. That places the power in patients’ hands, giving them the opportunity to make personal healthcare decisions, as well as helping to keep NHS waiting times down.
The NHS can benefit from working with the private sector. That should not be viewed as providers competing in a zero-sum game. If the two co-operate and realise how they can spread the burden of work, they can radically improve patient outcomes overall. Provided that the service delivered is of the highest quality and remains free at the point of use, who provides it is irrelevant to a patient in urgent need. We are rightly proud of the NHS and the excellent service it provides, but if it is to remain sustainable as a service that is free at the point of need for our children and grandchildren, we must acknowledge that we need a sensible debate about how we achieve that.
I suggest that with our electoral system there are only four possible outcomes of elections in the foreseeable future—a Conservative or a Labour Government, or one of them in coalition with the Lib Dems. I can guarantee that none of them would be elected if they included privatising the NHS in their manifesto. It may have escaped everyone’s notice, but Governments quite like to be re-elected, so if, during their administration, they had made moves towards privatising the NHS, they simply would not be re-elected. Those who signed the petition need have no fear of privatisation from this Government. As I said at the beginning of my contribution, privatisation is a myth peddled for party political advantage, and nothing more.
Rosie Cooper (West Lancashire) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hosie. I thank my hon. Friend the Member for Hartlepool (Mike Hill) for securing the debate. It gives Members such as me the opportunity to talk about how the privatisation of NHS services affects us all and, in particular, our own constituents.
I will make three points about privatised healthcare, from commissioning right through to practice. First, it lacks transparency; secondly, it is removed from adequate accountability; and, thirdly, it prioritises shareholder gains over patient care. It only takes a glance at the situation over the past two years in my constituency, where privatisation is not creeping but galloping in, to witness numerous examples of those three points.
After NHS West Lancashire clinical commissioning group announced in February 2016 that it was liaising with two private companies, Optum Health Solutions and Virgin Care, to deliver urgent care services—among them walk-in centres, out-of-hours and acute visiting services and community health services, including district nursing—it quickly became clear that the process would leave residents, healthcare professionals and, indeed, me in the dark, unable to see the details of the selection process and the contract and now unable to see performance figures against that contract. At the time, Southport and Ormskirk Hospital NHS Trust was delivering those services, yet the CCG excluded it from bidding, amazingly without any real explanation from any of the bodies involved.
When I attempted to question the CCG, NHS England and NHS Improvement about the situation, the phrase “commercially sensitive” was frequently deployed to avoid answering. The people of West Lancashire and the people of this country fund those services, so I ask the Minister to explain why there are not more stringent procedures in place to ensure that the taxpayers know where their money goes and why.
I also ask the Minister to consider an investigation into the phrase “commercial confidentiality” and its very frequent use by CCGs. It should be stated clearly that the lack of transparency and accountability among private healthcare providers is a trend that continues nationally, and not just within commissioning. As many of us are aware, the British Medical Association has long warned the Government that there continues to be no obligation for private providers to report even on patient safety incidents and performance data. Although the Care Quality Commission requires non-NHS providers to abide by a duty of candour, there is no obligation to make publicly available any information about the nature or severity of any such incidents, and the CQC does not publish the information either. Additionally, private providers are not required to regularly update the CQC on less serious safety incidents and, according to the think-tank, the Centre for Health and the Public Interest, only 63% of hospitals do so.
Will the Minister address how the CQC, NHS England, NHS Improvement and Members of Parliament are meant to hold CCGs and private providers to account if information, including that relating to patient safety, remains behind closed doors, without the possibility of scrutiny, let alone action being taken about it? I understand that regulators may request some of the information, but that is simply not good enough. The regulators are not always on top of their game, as evidenced in Liverpool Community Health NHS Trust, where, as the Minister knows, every regulator missed the poor services delivered to patients, as evidenced by both Capsticks and Kirkup—and that is an NHS trust, not a secretive private provider. Openness, transparency and accountability should be an integral part of a democratised healthcare service, right through from commissioning to practice. The extent of the secrecy surrounding the process in West Lancashire led to me raise it with the Public Accounts Committee and the National Audit Office. Does the Minister think it should have got to that stage at all? What does he recommend we do in the future?
Without scrutiny, we risk events happening such as the recent one in which a company operating one of the first integrated NHS 111 and GP out-of-hours services was forced to hand back its contract to the NHS just seven months into a three-year contract. In 2016, CCG board papers rated the proposed transfer of services as “red”. The deal went ahead anyway. Where is the accountability, and where was NHS England? Were other regulators on the missing list yet again? A similar event was recently about to happen in Liverpool, where the CCG wanted to award the contract to run the majority of community services to Bridgewater Community Healthcare NHS Foundation Trust. That would have been a disaster, as anyone looking at the current state of that trust would have been able to see. Yet all the detail was hidden from the public. Incidents involving GP out-of-hours services like that send shivers down my spine.
Fewer than two weeks ago, it was announced that Totally plc, a private provider of out-of-hospital services, had been awarded a four-year contract with Virgin Care for 18 GP out-of-hours services in West Lancashire. It then transpired that Vocare, a subsidiary of Totally, was going to run the services on its behalf. In case Members got lost in that little trip, I will outline the process in full: NHS England devolves commissioning to NHS West Lancashire CCG, which contracts to Virgin Care, which subcontracts to Totally, which hands its contract over to its subsidiary, Vocare. You really could not make it up, could you? I have to ask the Minister: does that constant subcontracting between private companies not further dampen our abilities to hold private providers to account? Where does the increasingly complex and inward-looking operation end? Perhaps I already know the answer, because Totally’s chief executive, Wendy Lawrence, commented in a press release on the recent contract award:
“also ensuring we create value for our shareholders by securing important strategic contracts such as this one”.
Does that explain why, in 2017, constituents of mine who received urgent care from Virgin were informed that wounds could be dressed only once and my constituents would then need to go to the local chemist and purchase further dressings? Will the Minister explain how that is healthcare free at the point of delivery?
In 2017, the operating hours of the Ormskirk urgent care centre were 8 am to 8 pm. It used to be open from 8 am to 10 pm. The initial contract was to allow the centre to be open to enable my constituents to go to the urgent care centre when GPs surgeries were closed and to ease the burden on A&E. The opening hours do not meet that need, and it transpired later last year that Virgin does not always have a GP on site. When there was a computer problem at the walk-in centre, my constituents were simply told to go home or go to A&E.
Since the Health and Social Care Act 2012, CCGs and private contractors have promised us that patients would receive quality treatment and care, but the reality has often been starkly different. With privatisation rising year on year, Ministers must ask why Members of Parliament, regulatory bodies and, worst of all, health service patients have been unable to hold private contractors and those who commission services to detailed account. They have dampened or refused transparency. There is a lack of accountability, and the service people receive can prove inadequate. Taxpayers are not being offered the high-quality patient care they expect and deserve. Many Members on the Government Benches blindly follow statements made to them and think that the situation is okay everywhere. It certainly is not. We have proved that regulators are not regulating. If we cannot get the information from private providers, Government Members cannot assert that everything is great, because we do not know.
Alex Chalk (Cheltenham) (Con)
It is a pleasure to serve under your chairmanship, Mr Hosie, and to say a few words in this important debate about healthcare. Only this morning I had the pleasure of visiting Charlton Lane Hospital in my constituency. It treats people with functional mental health problems and dementia. It was striking to see so many dedicated nursing staff who work in such a challenging field, but show such consistent humanity and dedication.
NHS outsourcing to private providers is a sensitive topic, but that is essentially because it has been dressed up as a threat to the NHS’s guiding principle—namely that treatment should be provided free at the point of use and regardless of ability to pay. Nothing could be further from the truth, however. That principle is fundamental, inviolable and enduring. It is all those things because it reflects so much about the kind of country we are and want to continue to be.
This point has already been powerfully made by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), but it bears repetition. When a member of the public is rushed into hospital needing emergency care, we take pride in the fact that the ability to pay is irrelevant. NHS staff are interested in vital signs, not pound signs. That is why it was no accident that the NHS featured so heavily in the stunning opening ceremony for the London Olympics in 2012. It did so because it reflects our nation’s values. While it is perfectly legitimate to have a debate about the precise mechanics and arithmetic of how to deliver the principle of providing care free at the point of need, it would be wholly wrong to pretend that the principle itself is in play, because it is not. There is simply no appetite for the Americanisation of British healthcare. Even if there were, I could never support it, and I am entirely confident that my colleagues on the Government Benches could never support it either. It is vital that we do not conflate the word “privatisation” with Americanisation or fragmentation. It is neither of those things.
Dr Whitford
What is the hon. Gentleman’s view of patients who are being asked to provide co-payments of more than £800 to have a second eye cataract surgery or to pay for their second hearing aid? That has been creeping into NHS England. Patients are being asked to pay for more and more items.
Alex Chalk
I am grateful to the hon. Lady. I respect her past record and her contributions to the House. There is an ongoing debate among clinicians—no doubt colleagues of hers—about what the NHS should cover. Most of the clinicians I speak to would welcome a more open, non-partisan and grown-up debate about the full extent of the NHS, but the guiding principle should not be confused. Whatever it is that the NHS can provide, the core principle is that it will provide it to individuals in our country regardless of their personal circumstances. I am at pains to emphasise that, because from listening to some of the contributions of Opposition Members—no doubt made entirely sincerely, but made none the less—one could be confused into thinking that that principle was under attack. It is not, and it never will be.
The debate is about the delivery of a common goal. Many take the view, with some justification, that we should be open to solutions that deliver that goal most effectively for patients. Last year, the respected and politically independent King’s Fund wrote in its report:
“Provided that patients receive care that is timely and free at the point of use, our view is that the provider of a service is less important than the quality and efficiency of the care they deliver.”
When debating this important question, we should not rewrite history. As the hon. Member for Ealing North (Stephen Pound) has conceded, it is a fact that certain services have been provided independently since the NHS’s inception 70 years ago. Most GP practices are private partnerships; the GPs are not NHS employees. Equally, the NHS has long-established partnerships for the delivery of clinical services such as radiology and pathology, and non-clinical services such as car parking and the management of buildings and the estate. To give an everyday example, the NHS sources some of its bandages from Elastoplast. That is common sense. It would be daft if public money was diverted away from frontline patient care to research and reinvent something that was already widely available. It would be just as daft if the NHS had to do the same for its water coolers or hand sanitisers.
As the King’s Fund put it in its 2017 report:
“These are not new developments. Both the Blair and Brown governments used private providers to increase patient choice and competition as part of their reform programme, and additional capacity provided by the private sector played a role in improving patients’ access to hospital treatment.”
Throughout Europe there are healthcare systems that offer high-quality care, free at the point of use, and make use of far greater numbers of private providers than the UK.
I want to say a few words about the impact on my constituents in Cheltenham. I will give three brief examples. First, Cobalt is a Cheltenham-based medical charity that is leading the way in diagnostic imaging. It provides funding for research, including into cancer and dementia, which it does as part of a research partnership with the 2gether NHS Foundation Trust. It assists with training for healthcare professionals, and it even provided the UK’s first high-field open MRI scanner, which is designed for claustrophobic and larger patients. Are we seriously suggesting that is an affront to patient care in Cheltenham? Not a bit of it. Are we seriously suggesting that getting rid of it would be a good idea? Emphatically no.
Secondly, we have the Sue Ryder hospice at Leckhampton Court, which is a 16-bed hospice that delivers truly excellent care in the Gloucestershire countryside. It also provides hospice-at-home services. It also supports, as I know, family, carers and close friends. It is part-funded by the NHS and by charitable donations. It shows astonishing compassion, but also creativity and innovation in how it delivers care. The third example is Macmillan and its nurses. I need say no more about it—it is a fantastic organisation. To suggest that these independent providers and charities are somehow not good for patient care is to stretch a political principle beyond breaking point.
We also need to slay the myth—there was just a glimmer of it today, but it was not really developed—that somehow different types of providers are held to different standards. All providers are held to the same standards and given rigorous Ofsted-style inspections and ratings by the Care Quality Commission. For my constituents in Cheltenham, I want to see resources allocated as effectively as possible to free up resources for facilities such as A&E at Cheltenham General Hospital, which can only be delivered there. There is growing demand for A&E in Cheltenham, and the service needs to be 24/7.
It is right to say, however, that there are some legitimate concerns that can be properly addressed. The experience of Carillion has laid bare the chaos that can be caused when private providers take on significant contracts and then fail to deliver. We have to recognise that the consequences of failure in health services would not simply be an unfinished construction project, important though that is, but could be a decline in the quality of patient care. I mention that only because community services are disproportionately served by independent providers, but let us keep this in context. Based on a survey of 70% of CCGs in 2015, Monitor published analysis in its report, “Commissioning Better Community Services for NHS Patients”, showing that independent providers were responsible for just 7% of contracts. We should be vigilant, not dogmatic and quasi-religious in our approach. The NHS as a whole must ensure that no contract ever becomes too big to fail and that contingencies are always in place to cater for such an eventuality.
Kevin Hollinrake
My hon. Friend is making a very fine speech. He mentioned the failure of Carillion. There are many lessons from that and many reasons behind the failure. One is that Carillion worked on wafer-thin margins in its contracts, which illustrates that the taxpayer gets very good value for money because of the competitive nature of the bidding process.
Alex Chalk
My hon. Friend is absolutely right. That is the point that I wanted to make. Where we can have a private provider that provides treatment efficiently and effectively, freeing up resources to go elsewhere on the frontline, that is fine, but we have to be extremely vigilant to ensure that when we enter into such a contract, it is not set up to fail. Were it to do so, that would resonate for patient care rather than simply being about a building waiting to be constructed. We must ensure that the principle is applied responsibly and intelligently, as I am sure it will be.
I want to see the best possible care for my constituents, and I know that every single person in this room wishes the same. We all wish to see the NHS free at the point of need. I want to see precious public resources go as far as possible to honour the founding principle and drive it forward. With careful scrutiny and sensible limits, charities and independent providers can play a part in a joint endeavour.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Hosie. I apologise for not being here at the start of the debate but I was serving on a statutory instrument Committee. I am grateful that you are allowing me to speak in today’s important debate about our NHS.
I felt motivated to speak when I entered Westminster Hall and listened to the debate, particularly on the assertion that privatisation is not such a bad thing. I want to draw out the issue of NHS funding. The funding system is broken. I am grateful to the Minister for meeting me recently to discuss the real challenges in York’s funding system. I look forward to hearing that progress has been made as a result of that, but there are real challenges within the funding system and I want to challenge some of the assertions made about that.
We must understand that the NHS was designed to work as a whole. The types of services that move to the private sector are low risk and high volume, such as hips, knees and cataracts. If we add those together, someone can cream a profit—I would prefer a reinvestment—off the top of providing those services. The NHS used to take the additional money and reinvest it in the more expensive parts of the NHS, such as intensive therapy units, the renal service, for which the drugs are very expensive, and A&E. The fine balances of NHS finances worked. However, when we remove those opportunities, because the hips and knees are being delivered by another organisation that makes a profit out of the NHS, although the risk is left with the NHS, NHS finances collapse because the cross-funding is not going into those services, which is exactly what we are seeing at the moment. I first had that debate with Andrew Lansley when he put his proposals forward, and it has come to pass that NHS finances are not working because that balance has been taken out of the finances. The opportunity for the NHS to generate the resources that are vital for the critical care parts of the NHS is removed.
Kevin Hollinrake
The hon. Lady makes a good point, but the reason the NHS is under pressure is hugely increased demand. There is more money going into the NHS, and we would all concede that we need to put more money in, but demand is the essence of the problem. It is not because we have private sector companies operating within it.
Rachael Maskell
The hon. Gentleman is right that demand on the NHS is huge, which takes me to a further point that I will raise shortly. We recognise that we need more resource in the NHS, but the fragmentation and the fact that so much money is taken out for contract management as opposed to reinvestment into health services creates challenges. We now have lawyers and managers managing those contracts in the NHS instead of the money filtering through to healthcare, as it would in a planned health system. Of course, when we have fragmentation, we have to work with multiple systems across multiple agencies, and trying to get the organisations to talk to each other also puts pressure on the system.
We have a growing ageing demographic and increased pressures on the health service, but, because we now see a disconnect between some of the NHS’s other services, such as prevention and public health, we do not have the levers in the system to drive better health in the community, and more risk therefore ends up back at the door of the acute services. As the situation escalates, the acute system is more and more challenged, not least because of the different funding mechanisms and interests of the CCGs and the acute trusts. If we look at a tariff system versus the CCGs’ interests, we see that they clash with each other, which then means we have a waste of resource.
I can give examples of how the funding is broken and not working within York. I have had discussions with the CCG and the acute trust. The CCG has to fund tests and other services that are not picked up elsewhere in the tariff system. Where do those services go? They go out to the private sector, so there is a cycle of decline and trying to manage a system where the fundamentals of how NHS funding works are not addressed. I suggest to the Minister that if we brought together a planned health service with proper funding, the rest of the system would fit in place, but we have to take out the private motive within the NHS, which is clearly why many organisations are involved.
We have only to look at some of the services that are provided. I think of the Serco contract in Cornwall, where only one GP was in service for the whole of the county. I think of Serco again in Suffolk and how it provided community services. When it was not generating a profit, it said, “We’re off. We’re not interested in this service any more”, leaving some of our most vulnerable people in the community high and dry, with the NHS of course picking up the cost every single time and picking up the pieces. That is no way to run a critical health service in our country. That is why we need to move to a fully planned health service in public hands.
I want to draw on one other example of a private company: Virgin Healthcare. It was first of all an incubator within the forerunners to CCGs, seeing what was coming along the tracks and the opportunities there. I can cite many services provided by Virgin Healthcare and how it has looked to profiteer and cut services. I was head of health at Unite overseeing sexual health workers. Virgin cut sexual health services and as a result there was a rise in the prevalence of sexual disease. The services also became fragmented. The community was not provided with a service, and there was a complete failure to achieve the objective of the service.
Elsewhere, we see Virgin suing the NHS because it is not winning contracts. The business of Virgin is about generating as much money out of the state as it possibly can. Private companies use the NHS for their own interests to fill the pockets of shareholders as opposed to supporting patients. We must take the profit motive and private companies out of the NHS because that model is completely broken.
I will move on to two other issues. The first is staff in the NHS. I worked in the NHS for 20 years, so I know what it feels like. People do not want to work for private companies. They want to have one set of terms and conditions, and to engage with one set of training. They want one set of rules, and most of all they want the pride of working for the NHS.
Rachael Maskell
No, I will make some progress. People want to work in the interests of patients. It is important that we maintain that, because it is healthcare workers who give all the hours of unpaid overtime that nobody ever talks about. Why would they want to do that for a private company? They do it because of the sense of public service that comes from our country’s greatest pride: the NHS. We therefore need to listen to what our NHS staff say. That is why I take issue with the hon. Member for Cleethorpes (Martin Vickers), who spoke about union leaders shouting off. They represent more than 1 million people working in our NHS. They are the voice of people working in the NHS.
Rachael Maskell
As a union leader who spent 20 years working in the NHS, I certainly spoke up for all my members, who were deeply concerned about the destruction of the NHS because of the privatisation and fragmentation that was happening across it.
The second issue is what is happening to NHS buildings. We know that buildings were moved into NHS Property Services, which is a wholly owned company with one shareholder: the Secretary of State. He is looking through the Naylor report, which is not included in legislation at the moment, to reduce the estate. There may be some good cases for that, but profit should not be at the head of the argument. We should look at how the estate can be reinvested for the benefit of the community.
Parkland at Bootham Park Hospital in my constituency would make a fantastic public park and would address some of the mental health challenges in our city, which was the purpose of the hospital. I ask the Minister to take a further look at that opportunity. Under Treasury rules, the building and the parkland have to be sold to one private provider. Clearly, that would not work for my city. With regard to the rest of the estate at Bootham Park Hospital, it would be great to see the old mental health hospital converted into key-worker housing to support the rest of the NHS. York is in real crisis with regard to recruiting staff, because they cannot afford to live in the city. If we had key-worker homes on that estate, it would create a sea change. That is about putting public interest at the front, not private profit.
Finally, I want to talk about the future, because I am aware that time is moving on. I truly believe that the only way forward for our NHS is to have one planned public service, with full integration of mental health, physical health, public health and social care, provided in the interests of the community. We need play-space to look after the community, and no more fragmentation. It is ridiculous that we have so many regulators and so many different providers. The whole system is fragmented and fighting against itself. If we had one planned system, it would not only simplify the system, but ensure that the money is invested back into the heart and needs of patients.
Rachael Maskell
That is exactly how we should move forward, whether with consensus across all parties, which of course I would like to see, or just by putting forward what is logical.
Rachael Maskell
NHS staff are calling for it, managers are calling for it, and I trust that the Minister has heard the call in today’s debate.
Dr Philippa Whitford (Central Ayrshire) (SNP)
It is a delight to serve under your chairmanship, Mr Hosie. In the scope of the history of the NHS, I would like to make a little punt for the Highlands and Islands Medical Service—a forerunner of the NHS that was founded in 1913, a long time before the UK NHS.
To make a gentle point to the hon. Member for Gloucester (Richard Graham), I will read the World Health Organisation’s 1995 definition of privatisation. Privatisation means
“a process in which non-government actors…become increasingly involved in the financing and provision of health care, and/or a process in which market forces are introduced into the public sector.”
Patients who attend any of the four UK health services will receive amazing care, but that is predominantly due to the dedication of the people who work in them, some of whom are working against much harder pressures than others. Government Members talked about outsourced cleaning and car parking as a good thing. There was evidence that it was the outsourcing of cleaning, and poor-quality cleaning, that led to the rise of hospital-acquired infections.
Stewart Hosie (in the Chair)
Order. The hon. Lady will decide what interventions she wants to take.
Dr Whitford
I have only just started, and there is not much time left. It is repeatedly mentioned in this House that patients and carers in England have to pay significant car parking charges. That should not be seen as a benefit.
The Conservatives introduced the internal market in 1990. That introduced competition between NHS hospitals, and even at that point created an “us and them” mentality in my local area. It created divisions between the GPs and the hospital through the purchaser-provider split. Sometimes, if a patient was sent to me but had a problem that I diagnosed as pertaining to a different department, I could not refer them on, because the GP would not fund it. They had to go back to the GP and start again. That was both inefficient and, at times, dangerous.
Unfortunately, I have to criticise official Opposition Members, because I remember in 1997 when Labour got in and talked about going back to one NHS. Those of us who worked in the NHS were delighted. Sadly, we soon started to hear about foundation trusts and, in essence, we were back to the same policy. It was Labour that introduced independent treatment centres, initially with block contracts for common operations such as those on hips and knees. Most of those contracts were not met, and were therefore of incredibly poor value. GPs were being pushed to refer their patients to the ITCs. That was eventually recognised, and the move was made towards payment by results, which eventually led to the tariff. Capital funding was also kept off the books, leading to the private finance initiative, which we have discussed many times in this place. PFI has been shown to result in between £150 million and £200 million of profit per year for the companies that hold the contracts. That is putting a huge strain on many trusts.
In the 2010 election, the Conservatives promised no top-down reorganisation. Unfortunately, just a couple of years later, with the introduction of the Health and Social Care Act 2012, we saw that that was not true. The Act came into force in April 2013, and section 75 in particular pushed commissioning groups to put contracts out for tender. That has created relentless pressure to bring independent sector providers into the NHS. As the hon. Member for Thirsk and Malton (Kevin Hollinrake) mentioned, it has risen from £2.2 billion in 2006 to £9 billion in 2016-17, more than 10 years later. That is approximately the same cost as providing all GP services, so it is not a minor cost; it is significant. The independent treatment sector in 2015-16 won approximately 34% of contracts—a figure that rose to 43% in 2016-17. However, as the independent treatment sector has moved towards more community services, it is now winning approximately 60% of contracts. There is no question but that there is greater involvement of private companies in providing healthcare.
We hear all the time about waste in the NHS, but we have had circular reorganisation throughout my career—from 100 health authorities to 300 primary care trusts, to 150 primary care trusts and to a little more than 200 clinical commissioning groups. CCGs were described as putting power into GPs’ hands, but less than half of CCGs have a majority of clinicians on them, and less than 18% have a majority of GPs. We are now going to go through another change, with the introduction of 44 sustainability and transformation plans or accountable care organisations. The costs associated with the redesign, the redundancies, the new organisations, the external consultants and the change managers are all described as one-offs, but this has been repeated relentlessly over the past 30 years and has resulted in huge waste. Much smaller organisations, such as hospital trust and ambulance trusts, are now run by very senior managers with six-figure salaries—the same size as those received by the people who ran health authorities at the start of all this. That is a waste.
Then there are the running costs of the market itself—the contracting design, the tendering, the bid teams, the corporate lawyers, the billing and the profits. The costs of the system are utterly opaque. It is not possible to penetrate the veil of commercial sensitivity, and the Department of Health does absolutely nothing to show where public money is spent. It is estimated that the cost of the English healthcare market is between £5 billion and £20 billion—no one really knows. We have no evidence of precisely how high the costs are, and there is absolutely no evidence of a benefit, so it is not possible to do a cost-benefit analysis.
Kevin Hollinrake
The hon. Lady is talking about the efficiency of the system, but is she aware that the Commonwealth Fund report, which addresses some of the issues she is talking about, described the NHS as the most efficient healthcare system in the world?
Dr Whitford
The 2014 “Mirror, Mirror” report was actually based on the years before the Health and Social Care Act 2012 came into force—2010 to 2013—and at that time the NHS was No. 1 in eight out of 11 markers. That was due not to privatisation, but to easy accessibility. One of the key things is that patients can access the NHS quickly and easily. That ranking is not based on the system of reform that the Health and Social Care Act introduced.
Kevin Hollinrake
The hon. Lady seems to be implying that the internal market is a problem, but it has been in place since my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) was the Chancellor. Efficiencies have been driven, and she must take into account the internal market reforms that are in play.
Dr Whitford
The difference is that the original market was an internal market; what we have at the moment is an external market, which means that money is leaving the NHS and going to external companies. That is quite different from competition among hospitals.
To tackle waste, we should start with the cost of the market. Even if it is at the lowest end—£5 billion—it would help to clear the debt and pay for the hole in social care. It would make a significant difference.
In the five years leading up to 2013, the NHS always somehow managed to find money down the back of the sofa, and it scraped out with about £500 million at the end of each year. In 2013-14, it was overdrawn by £100 million. The next year, the figure was £800 million, and in 2015-16, it was £2.5 billion. People sometimes say, “There’s this little bit of efficiency, and this little bit has been saved”, but when I started the UK spent 4.5% of its GDP on health, and the highest it reached was 9%. Imagine if all that money had gone to frontline care, as the hon. Member for Thirsk and Malton talked about, and was used to pay nurses properly, get rid of bureaucracy and actually deliver care. We can do that only if we have a planned single system; we cannot do it if we create an entire bureaucracy.
Scotland diverged in 1999 when we got devolution. We abolished hospital trusts in 2004 and primary care trusts in 2008. We have place-based planning in the form of health boards, which have led to the integration of primary and secondary care. We now face the difficult challenge of the integrated joint boards for integrating health and social care. Look at our success: in-patient satisfaction is up to 90%, delayed discharges have been down every single year and Scotland has had the best accident and emergency performance since March 2015. In February, emergency department performance in Scotland was 90.3% in four hours; in England, it was 76.9%. Look at how the challenge evolved: it literally started in April 2013, when the NHS in England came under pressure.
I have frequently welcomed the plan to move to place-based planning. I agree that the term “accountable care organisations” is unfortunate, but the model contracts put out in August still make it clear that independent sector providers could bid to run an entire accountable care organisation. There is no statutory structure. The basis must be that there absolutely has to be accountability and a statutory responsibility. I believe there should be a presumption of a return to the NHS.
It is crucial that we reform the perverse incentives. Hon. Members have mentioned the tariff. Hospitals earn money only if people are admitted. They make money out of those who are not that sick and lose money on people who are incredibly sick. How will a hospital take part in this if keeping people in the community, which we all want, means that they lose money? That should be reformed in this place. Section 75 of the Health and Social Care Act caused the Nottingham University Hospitals NHS Trust to waste £500,000 preparing a bid for the Nottingham Treatment Centre against Circle, which then just pulled out. Hon. Members have mentioned that Virgin has sued six Surrey CCGs, one of which leaked that it is paying £328,000. Multiply that by six, and we are talking £2 million. The idea that outsourcing to private companies has brought benefits simply does not stack up. We are putting money into care. Get rid of outsourcing and fragmentation. I support the idea of place-based planning, but patients, not budgets, have got to be in the middle of it.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate my hon. Friend the Member for Hartlepool (Mike Hill) on the eloquent and knowledgeable way in which he introduced the debate on behalf of the Petitions Committee. He took us through a brief history of the health service and private sector involvement in it, and talked about the fears that have been expressed about the future of private involvement, particularly through the tendering process and the potential trade deals with other countries. I was very sorry to hear about his constituent, Connor McDade, and I would like to send my condolences to his family. I join my hon. Friend in paying tribute to the staff who looked after Connor and to all staff in the NHS, who make it the institution we feel passionately about.
That passion is demonstrated by the fact that, by the time we finish the debate, more than 20 Members will have spoken. Unfortunately, because of the number who have spoken, I am not able to go through every single contribution, but I want to draw attention to some of them.
My hon. Friend the Member for Hyndburn (Graham P. Jones) made an excellent speech in which he told us in detail how Lancashire has fragmented under the Health and Social Care Act 2012, and said that a High Court judge has blocked a £4 million Virgin Care contract. Later, I will talk about some of the adverse consequences of the 2012 Act in terms of litigation.
My hon. Friend the Member for Warrington South (Faisal Rashid) rightly raised concerns about the fact that the pursuit of profit can put patient care at risk. He gave a number of examples of the litigation that has been forthcoming, and he was ably assisted by my hon. Friend the Member for Dewsbury (Paula Sherriff) in that regard.
My hon. Friend the Member for Stroud (Dr Drew) talked about the wholly owned subsidiary that is proposed for his area. He is right that such a major change should not be proposed without being referred to hon. Members or members of the public. He asked a number of pertinent questions, and I look forward to hearing the Minister’s replies.
Similarly, my hon. Friend the Member for Leeds North West (Alex Sobel) talked about the wholly owned subsidiary company in his constituency. I was pleased to hear that his trust has at least responded to hon. Members’ concerns and is taking stock before moving on. I agree that there needs to be equality across all trusts in respect of the funding base upon which they make such decisions. He was absolutely right to say that it is not only clinical staff who make the NHS what it is today. Sometimes we do not recognise the valuable contribution that those who work behind the scenes make to the smooth running of our services.
My hon. Friend the Member for West Lancashire (Rosie Cooper) gave a tour de force of a speech. She is a greatly experienced health campaigner and described three fundamental problems with how the health service is run at the moment: transparency, accountability and the prioritisation of shareholder gain. How can it be right for a publicly funded service to refuse to answer questions from an hon. Member on the basis of “commercial confidentiality”, a phrase that can cover a multitude of sins? My hon. Friend is absolutely right to continue pursuing such matters, as she has done in many areas.
My hon. Friend the Member for York Central (Rachael Maskell), as always, gave a formidable speech about the issues affecting our national health service. She set out clearly how the cherry-picking of some services by the private sector damages the NHS as a whole and loads risk on the public sector.
Richard Graham
I was struck by how the hon. Member for York Central (Rachael Maskell), while talking about the need to find cross-party consensus on these issues, took no interventions from anyone on the Government Benches—[Interruption.]
Richard Graham
Furthermore, she made no recognition of the fact that issues such as subsidiary companies and so on are separate from the points she was making and absolutely not about privatisation.
Justin Madders
Members are indicating that my hon. Friend the Member for York Central did take interventions. It is not for me to comment on that, but I thought her speech was superb, and it came from many years of experience in the health service. However, on the contribution of the hon. Gentleman himself, I have to say that I disagree with him—this debate is about not a local election or weaponising the NHS, but about the 240,000 members of the public who signed the petition, which was launched some five months ago.
The hon. Gentleman also challenged us to find Conservative Members in support of privatisation—they may not express that support publicly, but we need only look at what has happened to the health service under a Conservative Government to see that privatisation has accelerated since 2010. There is also the famous 2005 pamphlet that advocated privatisation of the NHS. The Health Secretary has, I know, disowned his comments as one of the co-authors, saying that the pamphlet no longer represents his views, but at least five other current Conservative Members were co-authors, so there are questions to be asked about it of those on the Government Benches.
As other Members have said, private sector involvement has of course always been an element of the NHS, but since the Health and Social Care Act came into force there has been a step change in that involvement. After the Act became law, the amount of cash going to private sector partners went up by a staggering 25% in the first year alone. That is part of a broader trend identified by House of Commons Library research—the equivalent of £9 billion a year of NHS funds now goes into the private sector, which is double the figure under the previous Labour Government.
As we have heard, there are also huge problems with litigation arising from the 2012 Act. Money should not be spent on lawyers, procurement processes, tendering and court cases; it should be spent on patients. Given the longest and most sustained financial squeeze in the history of the NHS, we can ill afford money to be used in that way. The financial squeeze has also had consequences for how NHS hospitals are forced to use the private sector. Elective procedures in the private sector have gone up by 58% in the past year alone.
Justin Madders
I am sorry, I shall take no more interventions, because I am struggling for time.
Patients are voting with their feet. Owing to the deterioration in waiting times, over three years the number of patients going abroad for treatment has trebled to 144,000 last year. With the Government abandoning the 18-week waiting time target, and the widespread rationing of some treatments, that figure will surely get worse. Does the Minister accept that those figures are a matter of concern, and does he expect them to increase or decrease in the next 12 months?
Kevin Hollinrake
I am grateful. The hon. Gentleman will correct me if I am wrong, but I think he said that the growth rate in outsourcing has increased under this Government and the coalition. Full Fact, however, states that the growth rate was similar under both Governments—the Governments since 2010 and the previous Government.
Justin Madders
I am familiar not with those particular figures but with the House of Commons Library research, to which all Members have access and which was available in the brief for this debate.
A number of Members talked about wholly owned subsidiaries, and how they can undermine terms and conditions and open a back-door route to potential privatisation of the NHS. So far, the Government have kept that back door open. There are no guarantees that such companies will not end up in private hands in future, or that the recently announced and much welcomed pay rise for NHS staff will apply to those employed by those subsidiaries. Will the Minister agree that, as a matter of fairness, staff working in the subsidiaries should also receive the pay rise proposed by the Government?
In recent years many NHS trusts have set up those private companies, and up to 8,000 posts could potentially be affected—some reports have suggested that up to 40 trusts are now considering such arrangements. If completed, that would represent one of the biggest transfers of NHS staff and resources. We know the financial pressures that trusts are under, and some have sought to justify such moves as a way of saving VAT, so we can understand the dilemma facing trusts—the funding restrictions in the NHS have been some of the most difficult in living memory.
The overall position, however, is that there would be no saving to the taxpayer—although individual trusts may make a saving—because whatever is lost to the Treasury has to be made up elsewhere. It is incumbent on the Government to take action to ensure that all trusts are on a level playing field. The fact that they have done nothing so far adds to the suspicion that they are allowing, whether by accident, design or indifference, the fragmentation and privatisation of the NHS. I have some sympathy with the trusts making those proposals, but when one looks at the amount spent on management consultants to come up with the changes, the sympathy dries up.
Near my constituency, for example, the Clatterbridge Cancer Centre has spent more than £661,000 establishing a wholly owned subsidiary. The figures show wholly owned subsidiaries to have been extremely profitable for consultants in recent years and, despite a 2010 ministerial pledge to reduce managerial costs by 45%, annual expenditure on management consultants increased by 104% between 2010 and 2014. A study by the University of Warwick evaluated the expenditure, and the principal finding was that the use of management consultants was associated with a small decrease in efficiency. Has the Minister considered that report by Professor Kirkpatrick, and will he look again at the role of management consultants in the NHS?
I appreciate that I am running up against the time limit, so I will conclude. The people who have signed the petition are clearly articulating a concern about a hostile environment created by this Government. They wish to see a return to a properly funded, comprehensive, reintegrated and public NHS that is of course free at the point of use. It is time for there to be a Labour Government to deliver that vision.
The Minister for Health (Stephen Barclay)
It is a pleasure once again to serve under your chairmanship, Mr Hosie. I thank all Members who have contributed to this wide-ranging debate, in particular the hon. Member for Hartlepool (Mike Hill) who, as a member of the Petitions Committee, introduced today’s debate on the petition.
I join the shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders), in expressing our condolences for Connor McDade, the constituent of the hon. Member for Hartlepool, especially given Connor’s tender age. That must be extremely traumatic for his family.
“As the NHS moves from a public sector monopoly to a truly patient-led service, exciting opportunities are opening up for hospitals and other providers, whether public, private or not-for-profit”—
those are not my words, but the words of a Labour Secretary of State for Health in 2007. Perhaps, however, I am looking too far in the past and we should look to a more current Labour politician, such as the Mayor of Manchester, who was the last Labour Secretary of State. He said:
“Now the private sector puts its capacity into the NHS for the benefit of NHS patients”,
which I think most people in this country would celebrate. Indeed, the other of the three most recent Labour Secretaries of State, Mr Milburn, joined PwC in 2013 as chair of its UK health industry oversight board, whose objective was to drive change in the health sector and assist PwC in growing its presence in the health market.
As the hon. Member for Hartlepool recognised, from the outset, the NHS has always had a private treatment offer—I think he used those words. The key issue is where the care remains free at the point of access. That is enshrined in the 2012 Act and is reflected in many of the remarks made by Conservative Members.
My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) addressed the question of whether, alongside care being free at the point of access, there had been a step change in the number of private suppliers—that seems to have been the suggestion— notwithstanding the clear support from the last three Labour Secretaries of State for Health for such provision. It may surprise you, Mr Hosie, to learn that in the last year for which financial data is available, NHS commissioners purchased 7.7% of total healthcare from the independent sector. In 2010, the figure was just under 5%, so the rates of growth in the use of private providers under this Government are not the same, as my hon. Friend suggested; they are lower than those under the previous Government. We need to put into a degree of context some of the scaremongering that there has been in this debate about privatisation and weaponisation of the NHS.
The hon. Member for Colne Valley (Thelma Walker), who is not in her place, talked about privatisation—in that context, several Members mentioned Carillion. Again, it may be helpful to remind the House that of 13 PFI contracts signed with Carillion for facilities management, 12 were agreed prior to May 2010. The hon. Member for Dewsbury (Paula Sherriff) suggested that she was keen to talk to Ministers about her concerns with Virgin Care. I accept that, just as with care within the NHS, often there are lessons to be learnt in care from a private provider. The hon. Lady is not her place, but I am happy to accept her offer to meet her to learn from any past experience she has. The hon. Member for Crewe and Nantwich (Laura Smith) referred to PFI deals; as I said, many of those were signed by past Governments.
My hon. Friend the Member for South West Bedfordshire (Andrew Selous), in a first class, wide-ranging speech, referred to one of the key themes that came out of the debate: the importance of integrated care. Again, the weaponisation of this debate is highlighted by the fact that sustainability and transformation plans—as he said, they were endorsed by non-political bodies such as the King’s Fund—were characterised at the time by people such as Mrs Pollock as secret Tory privatisation. Indeed, the same person previously characterised Labour’s foundation trusts as privatisation. We have seen this privatisation badge given to successive changes as they have been applied. My hon. Friend is quite right that Simon Stevens was appointed as a special adviser by a Labour Government. His evidence to the Health and Social Care Committee was quite clear when he highlighted how many of these issues have been cited before.
The hon. Member for Hyndburn (Graham P. Jones) spoke of his concerns about fragmentation. I hope that he will welcome the shift to place-based commissioning and a focus on greater integration between commissioners. My hon. Friend the Member for Chichester (Gillian Keegan) identified the fact that patients’ outcomes are uppermost in the approach. That is very much reflected in the example she gave of the better care fund, which is all about how we bring health and social care together. An example of that is the change that the Prime Minister made by bringing the Minister for Care, my hon. Friend the Member for Gosport (Caroline Dinenage), into the Department to look at how we can better integrate.
The hon. Member for Warrington South (Faisal Rashid) suggested that the role of private firms had doubled since 2010. As I said, that is just not correct—the figure has gone from 5% to 7.7%, so the facts dispute that. My hon. Friend the Member for Gloucester (Richard Graham), in a very good speech, correctly highlighted the poor value for money of many PFI deals. That is why the Treasury changed the terms by which those Labour PFI deals are now contracted. It is right that we learn many lessons from them.
The hon. Member for Stroud (Dr Drew) raised a number of very fair, genuine and worthwhile points. I will quickly try to address them, although I refer to a previous debate in this Chamber on subsidiaries, where we aired some of the points that he raised. Subsidiaries are 100% owned by the NHS, so any financial benefit they gain is retained within the NHS family. They are an alternative to having to contract outside the NHS family, so they help to keep money in the NHS. It is also worth bearing in mind that the staff surveys often show, contrary to some of the remarks, that many staff have welcomed them—there was a 15% increase in staff survey responses in one hospital. To take another, Barnsley saw a six-fold increase in the number of applicants to roles, because the better flexibility and up-front salary offset against pension is one of the attractions that many staff feel that subsidiaries offer.
My hon. Friend the Member for Thirsk and Malton spoke about his experience, which underscored a point made by a number of my hon. Friends: the absolute, rock-solid commitment on this side of the House to treatment being free at the point of use. He gave the example of waiting for care—a critical point and something that none of us wishes to see; under this Government we will not see that. My hon. Friend the Member for Cleethorpes (Martin Vickers) very correctly identified how private provision can, when correctly commissioned, bring quicker care. A good example of some of the subsidiaries is diagnostic care, where clearly it is in the interest of patients to get the results of their tests quicker.
I recognise, as the hon. Member for West Lancashire (Rosie Cooper) highlighted, that there needs to be transparency in respect of outsourced contracts. When I was a member of the Public Accounts Committee, a phrase we often referred to was “following the taxpayer’s pound.” That stood then and it stands now. I am very happy to work with the hon. Lady on how we can ensure that we are able to follow the taxpayer’s pound and address areas of variance. Variance applies in the NHS family, but it also applies in the private sector. I am very happy to work with her, just as I am looking forward to a visit, on a cross-party basis, to look at some of the specific issues at the Liverpool Community trust that she correctly identified and brought to the House. The hon. Member for York Central (Rachael Maskell) said that no one wants to work for subsidiary companies; as I said, patients’ survey data suggests that is not the case.
My hon. Friend the Member for Cheltenham (Alex Chalk) highlighted how outsourcing is dressed up as a threat to treatment being free at the point of use; he is right to highlight the way that is being misportrayed and his pride in the fact that there is no payment requirement for treatment. He also highlighted the diverse mix in hospices, with charities such as Macmillan, which are not part of the NHS. No one would suggest that that is privatisation; this petition, which likens all outsourcing to privatisation, is deeply misleading.
I want to allow a minute for the hon. Member for Hartlepool to make his concluding remarks, so I conclude by reaffirming the absolute commitment of this Government to maintain treatment free at the point of use, but also always to put the needs of patients first and to respect value for money for the taxpayer. That has been reflected in many of the remarks from hon. Members across the House, and it is the essence of this Government’s approach.
Mike Hill
I thank all hon. Members for their powerful contributions, and I thank the petitioners, whose numbers helped to secure this important debate.
Question put and agreed to.
Resolved,
That this House has considered e-petition 205106 relating to the privatisation of NHS services.
Sitting adjourned.