NHS Outsourcing and Privatisation

Helen Goodman Excerpts

Wednesday 23rd May 2018 Commons Chamber

[Jonathan Ashworth]

We have always said that, and I do not know why Government Members are so surprised about it. Indeed, the Prime Minister, thinking she had a humdinger, quoted me at Prime Minister’s questions, but I was decidedly nonplussed by her response to my right hon. Friend the Leader of the Opposition.

Perhaps the biggest area in which private contracts have gone out is in community services, where the private sector has taken over 39% of contracts compared with the 21% in the NHS. NHS Providers said last week:

“The fragmentation of the community sector is…due to the private provider share of the community…service market being much larger than in other sectors”.

It also said:

“it is almost always a legal requirement for commissioners to go out to tender competitively for community services. Tendering for contracts is therefore much more competitive in the community sector than in the acute sector, and contracts are sometimes won on cost savings, rather than improvements in the quality of care.”

We have seen this time and again. For example, Serco was awarded a £140 million contract in Suffolk, but could not meet key response times, such as the four-hour response time for nurses and therapists to reach patients at home 95% of the time. Before Serco took over the contract, the target was achieved 97% of the time.

[Helen Goodman (Bishop Auckland) (Lab)]

Will my hon. Friend give way?

[Jonathan Ashworth]

I did say that I would not take any more interventions. I apologise to my hon. Friend; I know her intervention would have been excellent.

How about the seven-year contract worth £70 million per annum to Virgin Care that was awarded in November 2016 across Bath and Somerset, with services including health visitors, district nurses, speech and language therapists, occupational therapists, physiotherapists and social workers? The first few months were beset with IT problems, and there were problems with payroll transfers and delays in paying staff. How about the dermatology contract in Wakefield, which again went to Virgin Care? The IT systems did not work, and it was not consultant-led. Satisfaction fell by so much that GPs refused to refer, and again the contract had to come back in-house.

In fact, Virgin Care is now picking up over £1 billion of NHS contracts, and when it does not win a contract and believes something is wrong with the tendering process, it becomes increasingly aggressive in the courts. Most recently, and disgracefully, it sued the NHS in the Secretary of State’s own backyard and forced it to pay out £1.5 million. That money should be spent on patients in Surrey, not go into the coffers of Virgin Care.

The legal action by Virgin Care reveals a bigger truth. Not only does the Health and Social Care Act lead to many community health contracts going to the private sector, but the regulations underpinning the Act are dysfunctional, which results in millions being wasted on increasing numbers of failed privatisation projects. Perhaps the most prominent example is the 10-year contract worth £687 million for end-of-life and cancer care in Staffordshire that has had to be abandoned, costing CCGs over £840,000—money that should have been spent on patients.

That is why we are raising concerns about the proposed accountable care organisation model, which is currently subject to judicial review. We favour integration and accountability, and we agree that services should be planned around populations and, indeed, that funding should be allocated by means other than an internal market. We favour a strategic hand in the delivery of services and greater local collaboration, and our vision is one of planning and partnerships.

However, the existence of piecemeal contracts and the contracting out of services is a major barrier preventing the real integration of health and social care. The enforcement of competition obstructs collaboration and the proper, efficient organisation of services. A model in which billions of pounds of NHS and local authority funds can be bundled up and go through a commercial contract for 10 years is not accountable and neither, depending on the level of funding, will it deliver the level of care we expect, while it could also go to the private sector. What sense does it make to offer binding long-term contracts for delivering a vast range of services over 10 years? Surely the lesson of PFI is not to guess the future, not to write healthcare contracts for services 10 years hence and not to get locked into a deal when so much will change in the delivery of healthcare over the next 10 years.

This is a tired, outdated, failing approach. Quite simply, privatisation has failed. Almost every day in the NHS, we hear of a further investigation, a further failure, a contract handed back or a problem uncovered—from scandalous failures in patient transport, to poor standards in private hospitals, to millions wasted on huge tendering exercises that go nowhere, to Circle failing to manage Hinchingbrooke, to Capita failing to manage vital patient records, to Interserve failing to clean hospitals and deliver meals, to Virgin Care suing the NHS for £1.5 million.

I challenge the Tories to point in this debate to a significant success in outsourcing to offset that total mess. No Tory can tell us that the competition and markets in the Health and Social Care Act have led to shorter waits, innovations in care or better services. The reality is that the NHS and the provision of healthcare are too important to be left to the chasing of market forces. The principles on which our NHS was founded seven decades ago are being betrayed by this Government, and the staff and patients of the NHS are being betrayed with it. There are longer waiting times, intolerable pressures on staff, daily stories of human heartbreak and operations cancelled.

On the 70th anniversary of the NHS, the staff can hold their heads up high, but the Government should bow their heads in shame. In this anniversary year, it will fall again to this party—the party that founded the NHS and that believes in the NHS—to rebuild and restore a public universal national health service.