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From The Socialist newspaper, 23 February 2022

Privatisation and crisis in the NHS

Started by Labour... carried on by Tories

Save our NHS, photo Mary Finch

Save our NHS, photo Mary Finch   (Click to enlarge)

The Tories have used the cover of the Covid pandemic to speed up their agenda of opening up the NHS further to the profiteers in the private sector.

And Labour's health spokesperson, Wes Streeting, has welcomed more use of the private sector in the NHS, following in the footsteps of the pro-big business governments of Tony Blair and Gordon Brown. How did we get here and how can we fight back?

Jon Dale, Mansfield Socialist Party

Despite the heroic efforts of health workers, the NHS has been ill-prepared to cope with the Covid pandemic. The roots of this lie in years of neoliberal policies, including the drive of the Labour governments of Tony Blair and Gordon Brown to turn the NHS into a capitalist market.

Ten years of Con-Dem coalition and Tory austerity left over 100,000 unfilled staff posts (one in twelve), 17,000 fewer beds at their lowest level ever, and equipment and PPE stockpiles run down. These resulted from annual 1% funding increases, when 4% was needed just to stand still.

The Tories' 2012 Health and Social Care Act allowed NHS services to be delivered by 'any willing provider' - private companies could tender to win contracts. In a dire financial situation, the lowest tenders were always likely to be picked, whatever the quality.


The Health and Social Care Act followed the tracks left by Labour. Although Labour had been elected in 1997 pledging to end Thatcher's NHS 'internal market', within four years Blair reintroduced and accelerated it.

Blair said: "We must develop an acceptance of more market-oriented incentives with a modern, reinvigorated ethos of public service. 'Market-oriented incentives' meant big business profits.

Blair saw the role of the NHS, and other public services, as planning and monitoring (ie the 'regulator'), paying private companies to be 'providers'. Labour health secretary Alan Milburn negotiated a 'Concordat', inviting the private sector to take over clinical services paid for by the taxpayer.

After leaving government, Milburn became a well-paid adviser to Bridgepoint, a venture capital company closely involved with NHS privatisation. Another Labour health secretary, Patricia Hewitt, took a similar path after government, working for Syngenta.

Capitalism tries to turn everything into commodities to be bought and sold. Profit-seeking corporations were happy to accept Blair's invitations to carry out X number of hip replacements or Y number of MRI scans. Less well-defined areas of healthcare, such as contingency planning for a possible pandemic in the next 20 years, were never likely to attract the marketeers.

Turning the NHS into a market led to a huge increase in health workers' time measuring activities that could be priced and paid for. Contracts needed negotiating, results counted, procedures invoiced and paid for, disputes legally challenged etc.

Blair's first health secretary, Frank Dobson, complained that "paperwork used to cost 4% of the NHS budget, but now costs 15-16%". The proportion of NHS staff in management increased from 2.7% in 1999 to 3.6% in 2009.

Foundation Trust status was created by Labour. Hospitals and primary care trusts could become semi-independent, no longer under direct Department of Health control. They were able to borrow money on the private market, enter into commercial agreements with private providers, and generally run as commercial companies.


Although 'non-profit making', Foundation Trusts could form profit-making joint ventures with private corporations, and also sell off NHS assets, especially land. Competing for patients - who brought in payments - with other trusts undermined the collaboration needed to plan services to meet community needs. The scandalous treatment of elderly people with Covid in privatised care homes, cared for by insufficient staff paid even less than the pitifully low NHS rates, is also partly a result of this competition.

The proportion of GDP national economic output spent on the NHS under Labour went up from 5.4% in 1996-97 to 8.5% in 2009-10. However, much of this increase ended up in private bank accounts through contracted-out services and Private Finance Initiative (PFI) construction.

Labour commissioned a former Nat West bank head, Derek Wanless, to report on future NHS funding. With his background, he was regarded as 'someone the government could trust'.

Wanless wrote: "Individuals are ultimately responsible for their own and their children's health. People need to be supported more actively to make better decisions about their own health and welfare".

Ill-health was supposedly an individual's failings, rather than society's. A COPD (chronic lung disease) sufferer needed support to stop smoking. Of course some did, but air pollution, damp housing, dusty working conditions, lack of accessible exercise facilities and other factors outside individual control got much less priority.

Boris Johnson's government echoed this approach with its initial Covid advice, placing responsibility for controlling the epidemic on handwashing and coughing into our elbows, rather than testing, tracing, isolating and financially supporting Covid contacts. Ventilation of public buildings, CO? monitoring and air filtration were later shown to be vital too.

Labour transferred the functions of the Public Health Laboratory Service to a new 'arms-length organisation'. Its specialised laboratory work was hived off to hospital laboratories, becoming a poor relation to the pressures of daily clinical tests in an NHS increasingly cash-starved by the Tories.

And Labour privatised NHS Logistics, handing an integrated system of purchasing, stockholding and distributing NHS supplies to giant German courier DHL. 'Just-in-time' principles mean that when there is a major outbreak, the system is already at full capacity, and therefore struggles to meet extra for demand PPE, for example.

In 2018, DHL failed to win a new contract, resulting in further fragmentation into 13 different contracts for procurement, warehousing, distribution and marketing. In January 2020, a managing company started reducing NHS PPE stock levels - right when Covid was developing in China!

We are paying the price today for decades of NHS underinvestment, cuts and privatisation. Public health services, laboratory facilities, hospital beds and equipment, PPE and social care have all been strained to breaking point. Where was the robust contingency planning for infectious disease pandemics - predictable in their occurrence, if not their timing and cause?

Jeremy Corbyn

As a backbench MP, Jeremy Corbyn did vote against the Labour government's Foundation Trusts. Unfortunately, when he was Labour leader, he did not disown the record of the Blair and Brown governments.

And after the defeat of Corbynism, Labour has returned to its pro-privatisation position. Labour shadow health secretary Wes Streeting said that the last UK Labour government "showed using the private sector to bring down NHS waiting lists is effective, it's popular with patients. No doubt the next Labour government may have to use private sector capacity to bring down NHS waiting lists, and I won't shirk that for a minute".

Labour won't reverse NHS privatisation; instead the working class needs its own party. To reverse the damage the NHS has suffered, one of the first steps of a future socialist government would be to abolish Foundation Trusts, renationalise privatised services, take over private hospitals, and scrap PFI.

Globally, the shortage of tests, vaccines and lack of anti-viral treatments show a negligent pharmaceutical industry only concerned with short-term profit. The industry needs to be taken into public ownership.

All the big corporations should be nationalised, with no compensation except where there is proven need - nothing for the fat cats. Democratic planning by workers in the industry including scientists, medical experts, engineers and trade unions, together with community representatives and socialist governments, would ensure production was geared to meet need, not profit.

Alison Hill, Waltham Forest Socialist Party

One of Boris Johnson's key weapons in trying to deflect attention from his many lies and failings is to boast about the Covid vaccination scheme. The efforts of the scientists who developed the vaccines are to be admired. It illustrates that if you invest properly in research and development, many other important drugs could be developed quickly.

The Vaccine Manufacturing and Innovation Centre was built in 2020, with £200 million of government money, and is run as a not-for-profit company. Big business couldn't deliver a vaccine in time, so the public sector did!

Now Boris wants to sell it off. "Clearly government needs to work hand in glove with the private sector", he said. It's more like 'hand in wallet'.

This disgraceful fiasco shows that the Tories' mission to break up and privatise the NHS is continuing unabated. And, disgustingly, they are using the achievements of healthcare workers, in keeping the NHS going through a pandemic, as a smokescreen for their attacks.

The Health and Care Bill is going through the House of Lords at the moment. It is the brainchild of Simon Stevens.

Capitalist parties

Stevens has been happy to work with either of the main capitalist parties to privatise the NHS. He was Tony Blair's health policy adviser, and was later appointed NHS chief executive by former Tory prime minister David Cameron.

Stevens was president of United Health Europe, while Boris Johnson's health policy adviser Samantha Jones is former CEO of Centene. Both these companies administer public funds in the US through health maintenance organisations (HMOs).

The Health and Care Bill will create 42 new Integrated Care Boards (ICBs), uncannily similar to HMOs. If these had been implemented prior to Covid, they would have left the NHS pandemic response disjointed.

Private companies will be able to be part of the ICBs. ICBs will decide how the budget will be distributed. And they can use 'provider collaboratives', which is just Tory-speak for more private companies.

Bearing in mind that companies like Serco, Capita and many more are already all over the NHS, the concept of a universal and comprehensive NHS is fading away.

ICBs will not meet the needs of their local populations. They will have no explicit duty to provide, for example, emergency services for everyone in their area.

They will be able to pick and choose who they serve. No doubt they will continue their current practice to take all the relatively easy cases to treat and hive them off to the private sector, all paid for with public money.

The pandemic has allowed these companies to slide more firmly into the NHS. A testing station may have a big NHS sign outside. The workers may have NHS on their shirts, but they're working for Serco.

Services for infectious disease control, and public health in general, have been cut to the bone by successive governments. When the pandemic started, there was no way of running an effective test-and-trace system. Capacity in the NHS laboratories was not there.

What about workers?

Instead of rebuilding that capacity, the government threw £37 billion to the private sector, often to companies with no experience in this work. Serco alone got £350 million for managing test centres. Serco's shareholders got £17 million and the chief executive got £4.9 million.

Meanwhile, the workers actually doing the work are often poorly paid, on temporary or zero-hour contracts. They have found it difficult to find who they're actually working for, the recruitment agencies sometimes changing every few weeks. This is a useful arrangement for these companies wishing to minimise their tax responsibilities, but a nightmare for the workers trying to sort out a proper tax code or holiday pay.

Of course, precarious working and low pay are the weapons the bosses use to maximise their profits. But workers are fighting these methods by organising in the trade unions.

Look at the impressive strike action by ancillary workers at Barts health trust in east London (see pages 6-7). Serco pays them as little as it can get away with, less than their fellow workers on NHS contracts.

And these methods are not confined to porters, cleaners etc. Many NHS trusts and commercial GP surgeries are forming companies to supply services like physiotherapy, laboratories and diagnostics.

Temporary, insecure employment is no way to run a proper health service. Patients on long waiting lists are being softened up to the idea of seeking treatment in the private sector.

One of the most shocking things when the pandemic started was the thousands of needless deaths in care homes. Elderly people were being discharged back to care homes without being tested.

But care homes, in spite of being a multibillion industry, are founded on low pay and precarious working. Agency workers were working in more than one home a day, often with inadequate PPE. If you had Covid symptoms, but you couldn't get sick pay - you had to work.

83% of care homes are run for a profit, often by multinational chains. 5,500 different providers operate 11,300 care homes.

Sold off

NHS and local authorities have closed or sold off nearly half a million care home beds through the cuts of previous decades. Community and long-stay care is even more privatised and fragmented in the UK than it is in the US.

The NHS, one of the most important achievements of working-class people, is being undermined and blatantly sold off. The expertise and dedication of healthcare workers is being offered up to ruthless multinationals. These companies have honed their business plan in the expensive and ineffective US system.

But we can take our lead from the workers who are fighting back, not just for their pay and conditions, but to defend and rebuild the NHS itself. This struggle needs to be generalised. Many people probably don't know much about the latest round of attacks as they rumble through the House of Lords, but they would join a generalised struggle to stop them.

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In The Socialist 23 February 2022:


Unite and fight for a decent pay rise

Johnson scraps Covid safety measures

Tories instruct teachers to wipe Britain's real history

Bus services under threat

International news

Ukraine: Workers' unity against capitalist warmongers and imperialist meddlers

Canada: Prime Minister Trudeau invokes Emergencies Act to end 'Freedom Convoy'

One year after the military coup in Myanmar


Privatisation and crisis in the NHS

Erdington by-election

The Erdington byelection and the fight for a new mass workers' party

Vote Nellist for a workers' MP in Birmingham Erdington

Workplace news

Tube workers strike in defence of pay, pensions and conditions

University workers continue strike against bosses' attacks

Coventry bin strikers lobby strike-breaking Labour council

Scunny scaffs action forces bosses to the table

Usdaw: 'Reinstate Max' week of action

Trade union support for standing anti-cuts election candidates

Barts NHS workers to walk out again on 28 February

Just Eat couriers continue action to fight pay cut

Rail workers strike in Sheffield


Workers and students unite and fight

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Surrey: Unions and campaigns say stand as an anti-cuts candidate

Newham City Farm - closed with no consultation

London Socialist Party women's meeting

1 March: Socialist Party new website launch


TV review: This is Going to Hurt


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