Privatisation of NHS Services

Justin Madders Excerpts

Monday 23rd April 2018 Westminster Hall

[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.

[Kevin Hollinrake]

Will the hon. Gentleman give way?

[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]

Will the hon. Gentleman give way on a matter of record?

[Justin Madders]

Okay.

[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.

--- Later in debate ---

[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.