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Labour promises profit cap on independent providers in NHS

Ed Miliband has promised that under a Labour government a profit cap would be imposed on independent companies providing services to the NHS. 

At his party’s General Election campaign launch, Miliband revealed that all outsourced NHS contracts valued at more than £500,000 would be required to include a profit cap, with the default level set at 5%. 

Private firms would also be blocked from “cherry-picking” lucrative treatments and the NHS would become the “preferred provider” for all services. 

He added: “The money we pay for our health care should be invested for patient care not for excess profits for private firms. 

“It’s time to put patients before profits and stop the privatisation.” 

In the Olympic Park, London, Miliband added that Labour would repeal the government’s market framework for the NHS that he claims is seeing “services forced out to tender, privatised and fragmented”. 

Instead, his party would replace it with a system based on cooperation and collaboration, in which the NHS is the preferred provider. 

Commissioners would also have powers to terminate contracts if they judged the private-sector provider was not providing high enough quality care. 

I tis worth noting, though, that currently around 6% of health service provision in England comes from companies in the private sector. 

Responding to Labour’s announcement, David Hare, chief executive of the NHS Partners Network, said that independent sector providers deliver high-quality NHS care to large numbers of NHS patients every year and work closely with commissioners to ensure they deliver the best possible services. 

“Across the country these productive relationships are helping the NHS to respond to the challenges of a 21st century health system and mean that patients receive timely access to treatment and tests supported by the tens of thousands of staff employed by independent sector providers,” he said. 

“It is important that any new policies enable NHS commissioners to work with the independent sector to invest in extra NHS capacity and introduce the kind of service transformation imagined in the NHS Five Year Forward View. 

“Independent sector providers would want to work with any future Labour government to mitigate any risk or unintended consequences that could arise from the introduction of a profit cap and ensure that NHS patients continue to benefit from the services provided by the independent sector.” 

Although the election campaign is not officially due to start until Monday, when Parliament is dissolved, Miliband has set out clear dividing lines between Labour and the Conservatives on the NHS. 

Miliband also claims that his party will raise £2.5bn a year for the NHS through a mansion tax on properties over £2m, tackling tax avoidance by hedge funds, and a levy on the tobacco companies. 

This would pay for 20,000 more nurses, 8,000 more GPs, 5,000 new homecare workers and 3,000 more midwives, a policy announcement made last year. 

He also claims that Labour would join up services from home to hospital; guarantee no-one waits more than a week for vital cancer tests; and people would be able to get a GP appointment within 48 hours. 

Dr Peter Carter, chief executive and general secretary of the RCN, said the workforce announcement will go some way to reducing the huge pressure on frontline services. 

“Many of these measures will undo some of the damage caused by the Health and Social Care Act by putting the focus of the NHS on patients rather than profits,” he said. “Policies which protect against these dangers are good for patients and good for the NHS. 

“The pledge for £2.5bn a year is a good start, but more will certainly be needed if the predicted funding shortfall is to be met, along with a much greater focus on integration. These are positive proposals, but delivering these plans without major reorganisation against a backdrop of financial pressures will be a big challenge, and can only be achieved with input from frontline staff and clinical leaders.” 

(Image: c. Stefan Rousseau)

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