Privatisation of NHS Services

Rachael Maskell Excerpts

Monday 23rd April 2018 Westminster Hall

[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.

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[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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[Rachael Maskell]

York Teaching Hospital is going down the same lines in creating a wholly owned subsidiary company, yet the staff want to belong to the NHS—that is their ethos and that is what drives them. It is also important for full integration across the whole service, because people who work as porters and cleaners are as much about patient care as anybody else in the NHS. Does my hon. Friend agree?

[Alex Sobel]

Absolutely. When I go into our local hospitals as an MP or as a patient, I see that they are the beating heart of the NHS.

I ask trusts, such as Leeds, that are considering setting up a subsidiary company to put a halt to those plans and to work with their staff, representative trade unions and local MPs prior to making the decision. I ask them to do what is best for all involved, whether patients, staff or the community.

Cost pressures create perverse incentives for people to consider privatisation. We have rehearsed that argument quite well. They affect not just NHS hospital trusts but clinical commissioning groups for primary care services, NHS England and other NHS bodies. We need to take those perverse incentives out of the system so that privatisation does not happen by the back door—instead of being done by the Government through statute—which is what is happening.

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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.

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[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.

[Andrew Selous]

rose—

[Rachael Maskell]

That is exactly how we should move forward, whether with consensus across all parties, which of course I would like to see, or just by putting forward what is logical.

[Gillian Keegan]

rose—

[Rachael Maskell]

NHS staff are calling for it, managers are calling for it, and I trust that the Minister has heard the call in today’s debate.