Don't let them kill off the NHS

“As long as you’ve got your health.” It’s a refrain I remember my mother sharing with her friends and relations as we were growing up in the 1950s, in the days when the National Health Service, established in 1948, was new.

Socialised medicine, offering universal access to tax-funded health care, free at the point of delivery was as good as a revolution for the majority in the UK. Well, almost.

The history books show that the NHS, as part of the welfare state, was conceived of partly in response to the revolutionary aspirations brewing amongst the victorious fighters returning from action in the Second World War.

Now at 65, having reached pensionable age, the NHS is itself ailing.

The A&E unit at Trafford General Hospital, from where the NHS was launched in July, 1948, is to shut. Eleven more hospital trusts have joined Mid Staffordshire in “special measures” due to concerns over unusually high death rates and poor care.

From worldwide acknowledgement as the healthcare model to be admired, providing the best care at least cost, the NHS is now falling back in terms international ratings.  

Amongst the biggest and most complex organisations in the world, employing 1.3 million people, the NHS has been through many reorganisations as it grows and changes to meet the needs of the now aging population, and to take advantage of new technologies.

But the causes of its current sickness are more external than internal.

Since its inception the NHS has been subject to exploitation by private sector for-profit suppliers of drugs, medical equipment, information systems, you name it.  The news that Big Pharma company Pfizer is party to a legal price-fixing scam exploiting loopholes in the cosy Pharmaceutical Price Regulation Scheme that has set “acceptable” profits for years, is just the latest example.  

In 1992, Conservative prime minster John Major’s introduction of the Private Finance Initiative into public sector projects was a key moment in the transition from welfare state to market state. This was taken forward after 1997 by Blair’s New Labour.

Through 30-year leasing contracts with private sector developers, the NHS and other public sector services, deliberately starved of direct funding, became saddled with monstrous debts and are now conduits for the transfer of wealth.

Taxes are collected and passed through the public sector to the private sector organisations. On its way through, the labour of those who work in the public sector become the source of the profits distributed to the shareholders in the private corporations.

New Labour’s introduction of business-type foundation trusts, which set hospital against hospital in competition for private patients, leading inevitably to financial calamity in some cases, was another moment in the transition to the market state.

It seems the previous government turned a blind eye to mounting problems. Now the ConDems are opening up whole swathes of the NHS to the private sector in a further twist of the knife.

In the 10 years leading up to the current great recession, health spending in the United Kingdom grew in real terms by 5.7% per year on average. This came to an abrupt halt in 2010 as health spending dropped by 1.9%, in real terms, with a further 0.4% fall in 2011.

Now there’s talk of an end to the ring-fence protection in England, following the example of Wales, where the health budget has already been cut by more than 20%. Hospitals are shutting, jobs being slashed, services disappearing.

Throughout its 65 years, the NHS has co-existed with capitalist social relations. As in most countries, expenditure on health care has been predominantly through the public sector. The deepening global crisis is rapidly undermining that uneasy co-existence.

Socialised healthcare is a model for a society motivated by the needs of the people. Rather than watch the wrangling over the blame for its decline, we should build new forms of democracy that can convert the rest of the economy to its principles. With goods and services like the NHS under the direct control of producers and users, we could achieve the type of society we need.

Gerry Gold

Economics editor

Mid-Staffs scandal linked directly to NHS market

In the run-up to the publication of the inquiry into health care tragedies at mid-Staffordshire, the ConDems and the right-wing media are leading the charge against the trust in particular and NHS bureaucracy in general.

But what is not emphasised, naturally, is that the imposition of markets and competition in the NHS, combined with the spiralling costs of the wretched “public finance initiative” and spending cuts, is likely to result in many more catastrophes for patients.

Mid-Staffs happened under New Labour’s watch, with the desperate drive for foundation status leading to management putting health care second. The Tories have deepened the role of the market in other ways and are enforcing £20 billion of “efficiency savings”.

None of this should blind anyone to the fact that this could be, as campaigner Julie Bailey has said,  “the worst scandal in NHS history”. She set up Cure the NHS after her mother died at North Staffs hospital, along with hundreds of other patients in a catalogue of poor and often distressing forms of treatment.

It is not the first time that the hospital trust has hit the news. The inquiry which is being led by Robert Francis QC, follows a two-volume 800-page February 2010 report to parliament. Some 290 witnesses have so far given evidence and more than a million pages were considered by Francis and his team.

There were many whistleblowers, from nurses up to specialist registrars, but their concerns were ignored by those higher up in the bureaucratic chain. Relatives   desperately tried to provide for their loved ones many of whom were being denied medication, food and drink in dirty conditions.

The inquiry revealed that, in 2005, the hospital’s executive board was far more concerned with its cost-cutting plans to achieve foundation trust status – then New Labour’s flagship policy.

As Laura Donnelly writes: “The NHS trust was desperately short-staffed with 100 vacancies for nurses alone, but from 2005 onwards it embarked on widespread job cuts. Between 2006 and 2008, 160 nurses left the trust either through retirement or redundancy.....The board’s obsession with the project [for foundation trust status] left executives blind to the impact cuts would have on patients.”

A review for the hospital watchdog Monitor last month concluded that the Mid Staffordshire NHS Trust was not “clinically or financially viable” in its present form. Other trusts in similar positions like the South London Healthcare Trust are set to be broken up.

The irony was that regulator Monitor was the very body that authorised Foundation Trust status back in 2007.  Meanwhile, another regulator, the Healthcare Commission (later re-named the Care Quality Commission) announced that the trust was to be investigated! Both chief executive and chair resigned before the scandal was exposed in 2009.

ConDem’s health secretary Jeremy Hunt has tried to distance the government from New Labour’s “culture of targets and performance management”. Of course, the political class pretends there is no connection between the enormous cuts imposed under both Labour and the ConDems, and the callous – even life-threatening - attitudes by some staff in the NHS.

But those working in the very heart of the health service, such as Barts and London hospital orthopaedic surgeon David Goodier, have made things crystal clear. In an email sent to his trust, Goodier said it was a combination of poor management and government cuts that have led to patient needs being ignored.

The crisis is not only in Staffordshire. It exists in the National Health Service as a whole. Untangling the welter of bureaucracies, the watch-dogs that didn’t bark or were ignored and working for the real needs of patients is the challenge of the day.

That means abolishing the role of the market in the NHS, stripping away the power of the pharmaceuticals to milk healthcare dry, ending PFI contracts that resemble pay-day loans at public expense and putting the service at all levels under the direct control of staff, patients and local communities in place of overpaid bureaucrats.

Corinna Lotz

A World to Win secretary

Will the big three parties 'step aside' now please

As there now appears to be a new convention in public life in the shape of “stepping aside” while inquiries take place into incompetence and/or misleading broadcasts by the BBC, surely there are grounds for extending this practice into political circles as well.

So in the interests of probity, here is a short, sample list of malpractice and/or lying at Westminster that should, if we lived in a real democracy, lead to all the big three political parties “stepping aside” for the foreseeable future.

     New Labour years

1. Claiming that Iraq had weapons of mass destruction and using this lie as the basis of an illegal invasion and occupation of that country. The hundreds of thousands of deaths that followed are the direct consequence of this action and prosecutions for war crimes are in order.
2. The introduction for the first time in 1998 of university tuition fees on the spurious ground that this was the only possible way to continue to the sector. It signalled the end of free higher education.
3. Creation of the light-touch regulation of the City and finance through the hopeless Financial Services Authority, thus misleading the public into believing their money was safe in the hands of the banks. The financial collapse of 2007 showed this to be a lie.
4. Expansion of “public finance initiative” projects to build hospitals and schools on the basis that they would save taxpayers’ money in the long term. The recent collapse of several NHS Trusts shows this to have been deception on a grand scale.
5. Claiming that the expansion of the global market economy would benefit everyone. In fact, inequality grew faster, executive salaries soared and the ownership of wealth became more concentrated in fewer hands.
6. Using the spurious “war on terror” as the cover for a war on civil liberties and human rights through detention without trial, integrated national databases, interception of emails and the merging of criminal and civil laws through the notorious ASBO system.

2010 election and the ConDems

7. In the run-up to the 2010 general election, the three major parties consistently refused to divulge their plans to cut public spending if elected. As a result, the election was a massive fraud perpetrated on the electorate as a whole. The Coalition came to power without a mandate in a constitutional coup.
8. The claim that “we are all in it together” made by the ConDems has proved to be one of the greatest lies of British history. Spending and welfare cuts, inflation, the rise in VAT and other measures have fallen disproportionately on average earners, those in need and people with disabilities. The rich, as per usual, have got richer.
9. Lib Dems propping up the Tories by breaking their election pledge not to support a rise in tuition fees. Vince Cable, the business secretary, proposed the increase in fees to at least £6,000 a year. This alone disqualifies the Lib Dems from ever being in government again!
10.  David Cameron’s pledge that the health service was “safe in his hands” has become one of the all-time political lies. The NHS Act opens the door to privatisation by making hospital trusts ever-reliant on fee-paying patients and allowing GPs to commission services from the private sector.

We could go on and on, but no doubt you have your own examples of how the political system has become a conduit for misleading, misinforming and lying. There’s only solution – and that’s for the perpetrators to step aside.

Unfortunately, they intend to cling on to office for as long as possible. So it’s going to take one big shove to get them out of our hair to make room for a real democracy to take shape.

Paul Feldman

Communications editor

PFI albatross opens NHS up to private sector

The resource-draining Private Finance Initiative (PFI) foisted on public sector projects by New Labour is helping to create the conditions for the break-up and privatisation of the National Health Service.

The evidence is to be found in two reports over the last 48 hours – from a special administrator appointed following the financial failure of South London Healthcare Trust and today’s report from the Commons’ public accounts committee.

Yesterday, a special administrator recommended that South London Healthcare Trust should be broken up in the wake of its financial failure. The Department of Health should write off £207 million worth of debts built up by the trust driven to the brink of bankruptcy by PFI deals, the administrator said.

It should also provide up to £25 million extra per year to help continue pay for PFI deals. Two of the trust’s three hospitals were built under Labour using PFI funding. The trust plans to slash its workforce over the next five years, from 5,838 whole time equivalents in March 2012 to 4,755 in March 2016.

Administrator Matthew Kershaw said the money spent on PFIs accounted for around a third  of the trust's £65 million overspend in the last financial year. Nine bids had been made to take over the trust’s work. The private sector is ready to pounce, with bids from Virgin Care, Circle, Care UK, Capita and Serco already made.

The PFI albatross is dragging trust after trust into deep financial crisis, at a time when they are supposed to find £20 billion in “efficiency savings” (demanded by the previous government) and when the NHS is being reorganised by the ConDems to create market opportunities for the private sector.

Margaret Hodge, a member of the previous government and now chair of the PAC, presumably saw no irony in agreeing the committee’s report, which says:

“A number of trusts in financial difficulty have PFI contracts with fixed annual charges that are so high the trusts cannot break even. Paying these charges is one of the first calls on the NHS budget and the Department [of Health] is liable for supporting all PFI payments because it underwrites the Deed of Safeguard given to contractors. It already expects to have to find £1.5 billion to bail out seven trusts facing problems with PFI repayments over the remaining life of their contracts - equivalent to £60 million a year… The priority given to meeting PFI annual charges inevitably distorts priorities which is especially worrying at a time when resources are constrained.”

The rising cost of over 650 PFI projects hit £230bn this summer and won’t be fully paid off until 2048, according to a GMB union analysis of the latest Treasury data. Including the £44bn already handed over for PFI schemes up to 2009-10, the public purse will be hit with a total PFI bill of more than £270bn which is almost five times the value of the assets built (£56bn), says the union. “It means that British PFI debt is now equivalent to £9,300 per taxpayer. Annual payments are forecast to break the £10bn mark by 2017-18.”

The way that PFI contracts are framed puts them in a weak position when it comes to renegotiating deals, which can involve interest payments in double figures and exorbitant one-off charges just getting the contractor to change a light bulb. So trusts are locked into paying unaffordable PFI payments.

  

With another 20 or so NHS trusts in dire financial straits – despite an emergency £1 billion bail-out last summer – the private sector is licking its lips. The “failure regime” imposed on South London Healthcare is expected to be used at other trusts, with bids being taken for the continuation of services.

While PFI projects – under which contractors own the assets and lease them to the public sector – began life under the Tory government 1992-97, they were greatly expanded under New Labour by chancellor Gordon Brown. They were seen as a wheeze to build hospitals and schools on the never-never, without showing up as public spending, while giving the private sector a stake. The chickens have come to roost, however, and the NHS is being lined up for auction as a result.

Paul Feldman

Communications editor

New Labour's PFI legacy poisons NHS

Placing a major healthcare trust in Whitehall-led administration could signal the break-up of the NHS under the cover of a financial crisis that is largely the result of the pro-business policies of previous New Labour governments.

South London Healthcare Trust, which serves a million people, runs three hospitals and employs more than 6,000 staff, is in deficit to the tune of more than £1 million a week.

At the heart of its financial crisis are payments on a contract to build two of the hospitals.

These were made under the so-called Private Finance Initiative, which Gordon Brown in particular championed in the 1997-2010 New Labour governments. Under PFI, the finished buildings are leased back to the local NHS, which pays mounting interest payments over 25 years and more.

The PFI schemes in south London, which totalled more than £1 billion, cost more than £60 million annually in interest payments alone. There are also exorbitant costs for maintenance and small improvements, which the contractors set fees for doing.

Draft financial plans submitted by the hospitals to the Department of Health show that it faces a shortfall in its accounts of between £30 million and £75 million annually over the next five years.

Health secretary Andrew Lansley’s unprecedented decision to put the trust into administration will lead to a break-up and transfer of existing services. Some could end up in the hands of the private sector. A similar fate awaits another 20 hospitals in financial difficulty.

PFI deals became widespread from the late 1990s as a way of building hospitals and schools without finding the money up front but at higher-than-average interest rates. The enthusiasm for PFI expressed New Labour’s championing of the private sector as a “partner” for the public sector.

But this was no equal partnership, with the state guaranteeing the fulfilment of high-cost contracts. Lansley intends that the South London PFI contract will be paid directly by his department.

Through a sleight of hand, the costs to the taxpayer do not figure in public accounts and so do not contribute officially to the budget deficit (which the Tories have lost control of, if today’s figures are anything to go by). Nevertheless,  the total bill to the taxpayer over time is estimated at £229 billion on contracts valued at £62 billion.

In April a biting report by the National Audit Office found that each household will have to cough up nearly £400 next year to pay for hospitals, schools and motorways built under PFI.

The City firm Innisfree is the largest single investor in PFI, with money in 28 hospitals representing over 13,000 beds and 260 schools educating over 130,000 children. Innisfree’s profit margin was 53% in 2011. PFI is truly a licence to print money! 

Some PFI rip-off examples include:

• A hospital which charged £52,000 for a job that cost £750. Demolishing a shelter for smokers resulted in the PFI contractor charging £2,600 a year for the “extra cleaning”.
• A hospital in Bromley, south London, which will cost the NHS £1.2billion, more than 10 times what it is worth
• An empty school which will cost taxpayers £370,000 a year until 2027. Another school had to pay £302 for a socket, five times the cost of the equipment it wanted to plug in
• In Belfast, a school closed after seven years but the PFI contractor must be paid £370,000 a year for the next 16 years.

John Lister, director of campaign group, Health Emergency,  described PFI contracts as “a cosmic rip-off by almost every measure” which led to a “mass haemorrhaging of public cash”. He says:

“It also means that private sector profits are protected by legally binding contracts taking an increased share of declining trust budgets, while clinical services, patient care and the jobs of NHS staff are sacrificed, in an impossible battle to balance the books as the NHS faces real-terms cuts for the first time in a decade.”

With the Tories leaving PFI intact and preparing to launch a market-led health service on the unsuspecting public, the NHS has never been in such danger since it was founded in 1948.

Paul Feldman

Communications editor

'Big Bang' moment will shatter NHS

Even as the bill dismantling the health service completes its journey into law, older people in care homes have already been abandoned in a foretaste of what’s to come.

There are 376,250 older people living in 10,331 care homes in England and many are frail and vulnerable, with more health needs than most of the population. Around 40% have dementia, many are on cocktails of medication, and the average lifespan in a care home is one to two years.

The residents needed a whole range of medical services, including mental health teams, dietetics, occupational therapy, physiotherapy, podiatry, continence, falls and tissue viability (dealing with wounds, pressure sores and ulcers). Yet only four out of ten soon-to-be abolished primary care trusts (PCTs) make these available to care home residents.

In place of the ineffective PCTs is, however, a new system of commissioning that will put price competition with the corporate sector at the heart of deciding what patients will get. This will tear the heart out of an NHS already ravaged by budget cuts, dodgy “private-finance initiative” deals and the conversion of hospitals into business trusts by New Labour.

Opposition to the ConDems bill even forced its way into the discussion at the Bath Festival of Literature, when leading health academics Colin Leys and Allyson Pollock issued a rallying call to everyone who wants to save the NHS.

"This Bill will destroy the NHS," said Pollock, London University professor of Health Policy and Health Services Research. "If you care for the future, you need to focus now on stopping the Bill. This is a terrifying, Big-Bang moment, because Lansley and his team are moving us to a mixed-financing system similar to that in the US."

Leys forecast that "it will be the end of free care for all". The future he foresaw would be one in which "community care will contract and decline, everyone who can afford to will go private and all we'll be left with is a much-reduced service for the poor".

Today sees two separate rallies in Central Hall Westminster organised by the union Unite and the TUC. But you’d hardly know it. The TUC clearly doesn’t want and isn’t expecting many to turn up. It’s webpage for the event says “Places at the London event will be limited due to seating capacity”. The TUC and Unite and clearly of one mind. Unite’s transport details list consists of one coach each from Southampton, Oxford and Bristol. And that’s it.

Why is the organised opposition so muted? Answer? They simply don’t have an alternative. The not-so-stirring right-to-know demand to publish the Department of Health’s risk register into the impact of the health Bill on services, from Len McCluskey, Unite’s general secretary is about as far as it goes.

Just as on the pensions fight, the continuing wage freeze, public sector job and services cuts and every other reactionary ConDems policy, the union leaders have led one retreat after another. McCluskey’s call for civil disobedience and strikes during the London Olympics is just bluff and bluster to disguise the rout.

There is absolutely overwhelming opposition to the NHS bill, even among Tory supporters. A mass campaign of strikes, sit-ins, marches and rallies should have been organised with the aim of bringing down the government. But compromised by years of watching Labour governments undermine the NHS, and warned off confrontation by Ed Miliband, the TUC has organised a rally just as the bill is about to become law.

The fight to defend the NHS will take something quite different from the approach of the hardly-organised ranks of the opposition. Taking profit-hungry corporations into social ownership will be high on the list of tasks for a new democratic network of Peoples’ Assemblies.

Gerry Gold

New Labour's devastating legacy

Take one struggling NHS Trust, add in an exorbitant build-and-maintain private contract – all this is New Labour’s handiwork – and the result is a financial disaster containing a threat to patient care.

Today’s government announcement that 22 trusts, which run 60 units, cannot afford their exorbitant “private finance initiative” (PFI) payments and have lost financial stability only confirms the worst. For some trusts, annual repayments take up more than 18% of their turnover.

PFI deals, under which the state enters into a cast-iron mortgage-leaseback deal with developers who own the assets and receive an annual fee, were favoured by New Labour for two reasons.

First, the cost of building hospitals, schools and other infrastructure did not appear on the government’s balance sheet (although it involves a state liability). Second, it fulfilled New Labour’s dream of private-public partnerships as an exemplar of 21st century capitalism.

The dream has, inevitably, turned into a nightmare for taxpayers and patients alike. Some hospitals were smaller than they might have been to allow for repayments, while PFI contract costs have become unmanageable. Professor John Appleby, chief economist at the King's Fund think-tank, says that there is already “a drive to keep patients out of hospital”.

The contractors are laughing all the way to the bank, however, as the state is obliged to pick up the tab if the NHS Trusts can’t. Renegotiation of the contracts is virtually impossible because lenders know the government won’t let the trusts go bankrupt.

Official figures show that yearly bills will rise by 75% in the next 18 years. By 2049, more than £70 billion will have been transferred from taxpayers to private investors.

Even taking services like maintenance into account, this sum is far above the £11.4bn value of the building projects.

According to a Commons committee, the taxpayer is paying well over £20bn in “extra” borrowing costs – the equivalent of more than 40 sizeable new hospitals – for the 700 projects that successive governments have acquired under the PFI.

Last month, the Commons public accounts committee found that tax assumptions built into the case for PFI contracts were laughable.

One of the largest PFI investment funds told the committee that 72% of the shareholders of its management company were registered offshore. HICL, a subsidiary of HSBC, which made £38m of profit from 33 PFI schemes paid just £100,000 in UK tax. Ultimate ownership of at least 90 projects has been moved offshore, potentially avoiding tax payments when they are sold on again.

The PAC report says that the “buoyant and profitable” secondary market in PFI deals. “We suspect that initial investors are able to make excessive profits from selling PFI shares, yet we lack the information to know for sure,” MPs admitted.

Figures from the National Audit Office suggest that up to £4bn has been paid in fees to financial consultants, lawyers and others to get the projects off the ground. The head of one big PFI investment fund earned £8.6m last year.

Health Secretary Andrew Lansley said: "The truth is that some hospitals have been landed with PFI deals they simply cannot afford. "Like the economy, Labour has brought some parts of the NHS to the brink of financial collapse." Yet PFI goes on and on.

Since the May 2010 election, however, the Conservative-Liberal Democrat coalition government has signed 34 contracts with a capital value of £1.8bn ($2.9bn), according to the Treasury. Hundreds more contracts are in the pipeline for schools and other projects.

The continued commercialisation of the NHS, with the direct injection of competition by the Coalition, is bound to favour healthcare corporations. Like New Labour before them, the Tories know how to favour their friends and keep capitalism happy.

Paul Feldman

Communications editor

Welcome to the market state

From welfare to market state is the name of the project that Thatcher began, Blair and Brown continued and Cameron is intent on completing. The words he uses – “choice”, “diversity” and “freedom” – seem harmless. But the real purpose is barely disguised.

Just before he jetted off to Egypt and a tour of the Middle East with arms manufacturers in tow, the prime minister announced the plan to end the public sector as we know it. A “vital part of our mission to dismantle Big Government and build the Big Society in its place”, he announced.

“Diversity” is another warm word. But when Cameron applies it to public services, he means one thing – opening them up to “a range of providers” through competition. In other words, services delivered by the central and local state will be up for auction. Corporations, large charities and others will then compete to run them.

As Cameron acknowledged: “This is a transformation: instead of having to justify why it makes sense to introduce competition in some public services – as we are now doing with schools and in the NHS – the state will have to justify why it should ever operate a monopoly.”

To say, as TUC general secretary Brendan Barber did, that the plan was simply a "naked right-wing agenda that takes us right back to the most divisive years of the 1980s" is to miss out, conveniently, what took place between 1997 and 2010 when New Labour was in office.

Not only did the former state industries like rail, gas, electricity, water and telecoms remain privatised, they were subjected to even more competition and profit making. State subsidies for public transport were run down. As a result, for example, train fares are now the most expensive in Europe.

Not only that, Blair and Brown expanded the infamous “private-public partnership” and "private-finance initiative" arrangements under which companies provide services with the state guaranteeing their profit margins. The value of these contracts is an estimated £90 billion a year, making private involvement in the public sector the largest in any major economy and saddling the state with enormous debt.

Now the Coalition is taking the next logical step, using the cover of the massive regulatory bureaucracy that New Labour created as an excuse for what is certain to be a feeding frenzy for capitalists desperate for new areas of profit making as the recession deepens.

All this amounts to the end of the role of the capitalist state that developed after 1945. Then its purpose was to maintain a kind of class peace, provide services and prop up British capitalism where it could. With corporate-driven globalisation from the early 1980s came a profound change.

In Britain in particular, the state’s former role lost its relevance. Global corporations and a new financial system transcended borders and became more powerful than governments. The state began to assume the task of facilitating the operations of the global economy. Deregulation was its form, especially in relation to finance. Who can forget how Brown denationalised the Bank of England in 1997 as soon as he sat down at his desk.

The harsh world of the market state that Cameron envisages will more than a throwback to pre-1945. It is more like the early 19^th century, when the modern state did not exist. What will be left are the forces of repression – the police, the spy agencies, armed forces and the prison and courts system.

This begs the question as to what use a state like the present one is to the mass of people. The short answer is none at all. Its democratic side is shot through and now it denies responsibility for the welfare of its citizens. Our strategy has to be the dismantling of the market state and the transfer of political as well as economic power to the majority.

Paul Feldman,
Communications editor