Privatisation of NHS Services

Lord Spellar Excerpts

Monday 23rd April 2018 Westminster Hall

[Mike Hill]

I certainly do share my hon. Friend’s concern. Ironically, in my patch, sexual health services are delivered by Virgin doctors.

[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.

--- Later in debate ---

[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.

[Mike Hill]

My right hon. Friend makes an important point about social care. In fact, some private providers have drifted away from healthcare contracts because of the losses that they might make on them.