Privatisation of NHS Services

Kevin Hollinrake Excerpts

Monday 23rd April 2018 Westminster Hall

[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.

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[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.

[Dr Whitford]

Will the hon. Gentleman give way?

[Kevin Hollinrake]

May I make some progress? I have taken three or four interventions in a row.

[Dr Whitford]

It is on the point about a postcode lottery.

[Kevin Hollinrake]

Okay.

[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.

[Rachael Maskell]

Will the hon. Gentleman give way?

[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]

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[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.

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[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.

[Kevin Hollinrake]

Will the hon. Lady give way?

[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.

[Kevin Hollinrake]

rose—

[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.

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[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.

[Kevin Hollinrake]

rose—

[Andrew Selous]

Will the hon. Lady give way on that point?

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[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.

--- Later in debate ---

[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.