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10.12.14

NHS facing ‘creeping privatisation’

The NHS is facing “creeping privatisation” under the Health and Social Care Act, with a third of contracts awarded to private sector providers since the legislation came into force, research shows. 

A study in the British Medical Journal revealed that, between April 2013 and August 2014, non-NHS providers – those from the private and voluntary sectors, or elsewhere in the public sector – have secured 45% of contracts. 

The analysis of 3,494 contracts awarded by 182 GP-led clinical commissioning groups (CCGs) during the period revealed that a total of 1,149 contracts (33%) were awarded to private sector providers, 335 contracts (10%) were awarded to voluntary and social enterprise sector providers, while 100 contracts (2%) were awarded to other providers, such as joint ventures or local authorities. 

NHS providers, which include hospitals, community and mental health providers and general practice, secured the remaining 1,910 contracts (55%). 

Dr Mark Porter, BMA council chair, said: “These figures show the extent of creeping privatisation in the NHS since the Health and Social Care Act was introduced. The government flatly denied the Act would lead to more privatisation, but it has done exactly that. 

“Enforcing competition in the NHS has not only led to services being fragmented, making the delivery of high-quality, joined-up care more difficult, but it has also diverted vital funding away from front-line services to costly, complicated tendering processes.” 

When the Act came into force it enshrined principles of ‘choice and competition’ in law by requiring the new CCGs to ensure that NHS and non-NHS providers operated on a ‘level playing field’ in being able to provide NHS services. 

GP Dr Steve Kell, co-chair of NHS Clinical Commissioners (NHSCC), told NHE that no CCG has a ‘privatisation’ agenda. The organisation has also called on Monitor and NHS England to support CCGs to navigate the rules by providing more evidence and examples of how CCGs can effectively use existing competition laws. 

The Department of Health told NHE that the BMJ study itself makes clear that only 5.5% of contracts were subject to a competitive tender. But BMJ’s FoI request did reveal that of the 195 contracts awarded through competitive tender, private sector providers were most successful at bidding for these contracts, winning 80 contracts (41%). In comparison, NHS providers won 59 contracts (30%), 48 contracts (25%) were won by the voluntary and social enterprise sector, and eight (4%) were won by other types of provider. 

Also, within the competitive tendering figures, it was highlighted that 30 (15%) of the contracts were transferred from NHS providers to non-NHS providers. Of these, 13 were transferred to private sector providers, 14 to voluntary sector providers, and three to other types of provider. 

“These figures are misleading — official NHS accounts show that use of the private sector amounts to only six pence in every pound the NHS spends, slowing the rate of increase to just one penny since May 2010,” said a DH spokesperson. “Charities, social enterprises and other providers of healthcare play an important role in the NHS, as they have done for many years.” 

But Dr Porter added that under the new legislation there isn’t a level playing field as “private firms often have an unfair advantage over smaller, less well-resourced competitors, especially those from the NHS and social enterprises”. 

To “undo this damage” there needs to be an honest and frank debate about how things can be put right without the need for another “unnecessary and costly top-down reorganisation”, he said. 

Dr Kell added: “CCGs are regularly faced with difficult decisions regarding the need to tender. It is an issue that NHSCC members have asked for further clarity on with simpler processes for commissioners and providers. As we state in our CCG Manifesto for Change, competition is just one tool in the CCG toolbox and should only be used where it is in the best interest of patients.” 

“I am quite clear that no CCG has privatisation agenda. CCGs are independent statutory bodes with a clear focus to improve services for our patients and we are looking at things which are different from traditional NHS hospital based models to ensure we get the best outcomes for our patients and local populations.” 

Tell us what you think – have your say below, or email us directly at opinion@nationalhealthexecutive.com

Comments

Dominic Morgan   10/12/2014 at 13:45

Is the aim of the NHS to be a nationalised organisation, or is it: - that it meet the needs of everyone - that it be free at the point of delivery - that it be based on clinical need, not ability to pay as originally defined by Aneurin Bevan? If the most effective way of doing that is through a private company, what is the problem? I've seen horrendous inefficiencies in the NHS which simply wouldn't exist in the private sector. Why not pick the best service for the job, regardless of whether it is private or nationalised? My picture of the NHS is one staffed by great, dedicated people, but hamstrung by short-term, inefficient financial constraints, and a lack of clear leadership and an ever-changing strategy. Why should Clinicians have to spend so much time putting forward business cases, arguments and paperwork for their essential services instead of helping patients? Do we ask pilots to also bid for the best service to maintain their planes instead of flying them? of course we don't. Focus on their core skills and let them do these skills to the best of their ability, supported by the right structure around them. Lets focus on getting the best care for patients, and not get hung up on insisting this care is only provided from a nationalised system.

Tony Palmer   10/12/2014 at 15:50

I agree with Dominic, Why are we being brainwashed to accept that privatisation is a bad thing. Private businesses are usually efficiently managed otherwise they fail. Unfortunately NHS bureaucrats do not have the same incentive and come over as protective and propagating inefficiency. This leaves them vulnerable to competition. I remember health services before the NHS. Largely local private services supported by charities. Were they so bad? Could be helpful to receive a forensic report on how they operated and the comparitive costs,and whether we could use it to cut costs of our NHS.

Cllr John Hipkin   10/12/2014 at 16:10

The crucial problem facing the NHS in a time of new and expensive treatments, of an ageing population, of many poor lifestyle choices and of a universal insistence on the right to comprehensive healthcare is the overload of expectations and the inevitable failure of resources to keep up with those expectations. Whether that failure is due to 'privatisation' or an over-bureaucratic NHS matters little compared to the central fact that the NHS is a scared cow with an insatiable appetite. Politicians need to get down to the serious business of redefining the NHS in a time of austerity and that is likely to require some distasteful priority choices.

Dr.Rangarajan   11/12/2014 at 07:03

Outsourcing is definitely not a bad thing - as long as its managed & structured properly. By outsourcing certain in-demand services, the NHS can actually save time & money by permitting private companies to put in & maintain their machines (in case of radiology or oncology services) which are worth millions of pounds. The NHS only has to pay for the service. The entire process can be monitored for quality by NHS managers. Best part is - patients need not know about this arrangement, as long as they get good quality care. This 'PPP' or 'Public-Private-Partnership' model has worked well for dialysis services in India.

Lucia De Santis   12/12/2014 at 22:04

I agree with Dominic. If evidence shows that best care can be achieved through privatisation without undermining the principles of the NHS then we shouldn't demonize it. I only have one question for Dominic and others of the same opinion. I am honestly looking for an answer I don't have rather than asking a provocative question. Would privatisation of the NHS mean that patients would not receive free care at the point of delivery? Would the NHS still be funded by the National Insurance or would people need to pay on demand/with a personal insurance (USA style)? That is my only concern with privatisation.

Muvs   31/12/2014 at 17:34

G4S and the Olympics 2012. That is all

Alib   28/06/2016 at 08:17

The above comments show exactly why we are heading for a fully privatised NHS which will rapidly become an insurance based system. For a few very small discrete services, e.g. terminations, the private voluntary sector can be a good option. How has the privatisation to FOR PROFIT companies of community care gone? Drastic drop in the number of District Nurses. How has 111 gone? disaster. I presume the comments above are all from narrow focused hospital doctors. Privatisation a) removes money from front line care b) prevents integration c) relies on a superb standard of contract writing and monitoring that does not exist.

Anon   28/06/2016 at 09:52

The public sector doesn't have a good track record of managing outsourcing relationships well. Not sure the argument follows well though, as some of this is a result of changes in competition law, rather than privatisation per se.

The Gadfly   28/06/2016 at 12:28

It is obvious and frequently remarked that the private sector will cherry pick, selecting services from which the greatest profit for the least input can be achieved. Furthermore, the private sector is parasitic on the NHS in that the NHS is always used as a fall-back emergency service when things go wrong. Also, public accountability is lost since private concerns have no obligation to be transparent or to provide information. Finally, is it really ethical to make a profit from ensuring and enabling good health? The implication is that some people benefit from the problems and misfortunes of others.

Captain Ahab   28/06/2016 at 22:05

Capita...

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