Privatisation of NHS Services

Philippa Whitford Excerpts

Monday 23rd April 2018 Westminster Hall

[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.

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[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.

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[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.

[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]

rose—

[Martin Vickers]

The hon. Lady is probably going to tell me that I am wrong.

[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.

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[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.

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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?

[Dr Whitford]

No, because there is very little time.

[Andrew Selous]

We have 35 minutes left.

[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.