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June 20, 2014 / politicsbitesize

Our Not so Healthy Service

NHSWhat a great day to be a private healthcare investor!  A survey conducted by the Labour party this week found that NHS trusts in England have a combined deficit of £241m.  The figure is based on statistics from the House of Commons Library, the NHS regulator Monitor and the Trust Development Authority.

The survey paints a worrying picture of the state of finances across 58 trusts in the tax year 2013-14.  In the East of England there is a collective shortfall of £97.4m, the East Midlands are £92.3m in the red and the figure in London is £85.2m.  The causes of this are twofold: Private Finance Initiatives (PFIs) and an overall lack of funding.  Yet there is only one consequence: the privatisation of the NHS.

Both the previous Conservative and Labour governments and the current Coalition are to blame.  In November 1992 the Private Finance Initiative was launched by the then Conservative government, headed by John Major, as a way of obtaining private finance to build and maintain public assets, such as school and hospitals.  It enabled the government to increase investment in public services without borrowing from the taxpayer.

In other words, the government sign contracts with private companies who then build and service the assets. The government use the asset for the period of the contract and at the end of this period will own that asset. In effect, this is a mortgage that is being paid to private sector companies. The Treasury (and in the case of the NHS the trust itself) is  responsible for ensuring that the mortgage gets paid, but if there is not enough funds for the repayment of the loan then a deficit occurs.

As Dexter Whitfield has pointed out in a number of his publications on this issue, ‘PFI is privatisation by stealth, privatising those parts which could not, at least politically, be sold-off as complete services. It is the route to the ultimate marketisation and privatisation of health, education and social services.’

Privatisation of the NHS has already begun and will be enabled by the Trojan horse that is Clause 119 of the Health and Social Care Bill.  In March, the Health Secretary, Jeremy Hunt, and his Trust Special Administrators (TSA) were granted the power to close or downgrade any failing hospital in the country with just 40 days’ notice and to push through whatever local changes they consider necessary.

With the NHS in England facing a funding gap of up to £2bn in the next financial year, the future of our national institution is looking uncertain.  A report from the US-based Commonwealth Fund think-tank ranked the NHS top in 2013 out of a list of healthcare systems in 11 leading countries around the world.  The same report ranked the US private health care system as the worst, which upholds some commentators’ beliefs that private is not always best.

It is clear that privatisation is NOT the solution to the problems currently facing the NHS; in fact, it is one of the reasons why trusts across England have been plunged so deeply into debt.  A re-nationalisation of this service is required.  In 2008, the Labour government bailed out the banks to the tune of £1.2trn – perhaps now is the time to do the same for NHS?


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