By John Pickard
The most glaring omission of the Darzi review of NHS England is the extent to which the service is plundered for private profit. Unfortunately, the statements of Keir Starmer and Health Minister, Wes Streeting, which followed its publication, only increase concerns that the NHS will be an growing source of private riches, rather than the opposite.
Aspects of the report (which can be found here) that are correct – and which ordinary workers, as recipients of the NHS services, can see with their own eyes – are those that outline its serious decline, in some areas to the point of collapse. The report includes many illustrations of this, but in the section on NHS ‘Performance’ merely the section headings summarise the issues perfectly:
- People are struggling to see their GP.
- Waiting lists for community services and mental health have surged.
- A&E is in an awful state.
- Waiting times for hospital procedures have ballooned.
- Cancer care still lags behind other countries.
- Care for cardiovascular conditions is going in the wrong direction.
- The picture on quality of care is mixed.
In a whole number of respects, the report points out that similar countries to the UK – which is still the sixth wealthiest country on the planet – have better a provision of doctors, nurses and facilities per 1,000 of the population. This is hard data, numbers, but workers feel the failings more concretely in their daily lives. In many working class areas it is well-nigh impossible to find a dentist who does NHS treatment, and sometimes registering at a GP surgery is difficult. It is working class people who are the huge majority of the estimated 14,000 needlessly dying every year because of the chaos in hospital A&E departments.
The report doesn’t even deal with NHS vacancies, which are at record levels, because staff are grossly over-worked, under-paid and under-appreciated (except by patients). Thousands of health workers have voted with their feet, going to less stressful and better-paid jobs.
It has always been the policy of the Tories to oppose the NHS – they were against its establishment in 1948 – and successive Tory governments have deliberately run it down so that people are forced go to the private sector to get treatment.
Hundreds of thousands are now electing to pay to have procedures and operations done in private clinics and hospitals – it was over 800,000 last year – rather than wait years for treatment. That option, however, is only available to a minority who can afford it.
Despite frequent comments about ‘record’ amounts of money spent, there is still an issue of underfunding. According to an article on the BMA website, if NHS finance had continued to increase at its historic pre-2010 rate – instead of flat-lining when the Tories came to office, it would now be £362bn better off.
Massive £362bn underspend over the Tory years
What is even more disgraceful is that what is fundamentally a Tory policy – the ‘marketisation’ of the NHS – has been also followed by successive Labour health ministers, who have allowed the private sector in on a grand scale. It looks almost certain, from his comments and speeches, that Health Secretary Wes Streeting is going to further integrate the private sector into the functioning of the NHS.
The financial cost of the looting of the NHS for profit is not dealt with at all by Lord Darzi’s report, but it is key to understanding the crisis in health. Dr John Puntis, who is co-chair of the Keep Our NHS Public campaign, recently gave an excellent presentation to the East of England branch of the Socialist Health Association, in which he dealt specifically with the cost of the private sector to the NHS.
The private health sector, as he explained, is not a ‘neutral’ system, standing ‘alongside’ the NHS, but it feeds off the public sector and in fact costs the NHS tens of billions of pounds every single year.
PFI scams cost billions
Private profit is made out of the NHS through outsourcing services – cleaning, catering, IT, ambulance, diagnostics and other services, all of which, studies show, provide an inferior quality of service comparied to those provided in-house. One of the most glaring forms of exploitation of the NHS is in the PFI scams that were foisted onto hospital trusts during the last Labour government. Then there is the wide network of private hospitals, clinics and GP practices that feed off the NHS.
Dr Puntis pointed out that there is deliberate misrepresentation by the Department of Health and Social Care, in its estimate of the costs of private sector health to the NHS. Its own estimates leave out many private providers who are supposedly ‘non-profit’ organisations – like BUPA and Nuffield – and money that goes to the private sector via local government is also not counted as ‘private’.
Nor do the DHSC figures include services paid for by the NHS, but provided by private companies like Boots and Specsavers. For this reason, government figures would appear to show that the private sector consumes only around 7% of the NHS budget, but in fact, it is anything up to a quarter of the total.
Dr Puntis pointed out that the private sector ‘cherry picks’ procedures that are simple (and cheaper) to do, whereas it leaves complex (and more expensive) operations to the NHS. The for-profit sector is now dominant in the (relatively simple) treatment of cataracts, for example, whereas more complex eye operations, necessary to prevent blindness, are done by the NHS.
The private health sector doesn’t train a single doctor
Even then, the private sector sometimes gets things wrong and over the past five years, over 6,000 patients have had to be transferred to the NHS to put right what went wrong in the private sector. This alone costs the NHS £80mn a year, a sum which should be charged back to the private sector but is not. Those doctors who work in the private sector do so on a ‘free-lance’ basis, so that when things go amiss, there is no come-back on the private hospital.
When Wes Streeting talks, as he has done, about the private sector ‘taking up the slack’, he seems to imply that there are two different pools of health staff, whereas in fact there are not…there is only one. The private sector does not train a single doctor – that in itself represents a subsidy of around £8.75bn – and there is only one pool of surgeons and consultants. Any doctor performing an operation in a private hospital is a doctor who could doing the same operation in an NHS facility.
Altogether, according to the King’s Fund, public spending on healthcare services in private and non-NHS organisations could cost anywhere between 7% and 22% of the NHS annual budget. If you just look at spending by NHS England, it could total as much as 26%. Research by the Centre for Health and the Public Interest (CHPI) concluded that in 2018/19 – five years ago – 26% of the NHS budget went to the independent sector, 22%, if it excluded doctors and dentists.
Looking at the overall cost of contracts given out to the for-profit sector, a paper by the CHPI says, “Our earlier research estimated that there were around 53,000 individual contracts which underpin flow of money between the NHS and the independent sector. We now estimate that these 53,000 contracts are worth £29 billion each year”.
The total value of contracts given out to private profit companies is an astonishing £123bn. We Own It, another campaiging body, recently attempted to quantify the scale of the profits extracted from these contracts. It analysed NHS data involving over 72,000 contracts, looking specifically at those for services that the NHS can and does already deliver in many places. They selected all contracts over the value of £1 million, which comprise 94% of the total and they analysed a representative sample.
Many companies fleecing the NHS are US-based
Those contracts had an average estimated profit margin of over 5% and given this figure, We Own It concluded that the total profits on all private contracts given by the NHS from January 2012 to May 2024 amounted to £6.7 billion total, or £10 million each week. This figure incorporates the NHS in England, Scotland, Wales and Northern Ireland.
Many of the companies fleecing the NHS are based in the US and in fact there has been an influx of investment into the UK, specifically aimed at buying up GP practices and other health facilities because from their point of view, it is a way to make easy money. Dr Puntis pointed out in his presentation to the SHA, that,
- Seven of of every ten items of equipment and medical devices are from US companies
- The NHS spends £10bn a year on diagnostics, mainly to US-owned companies.
- 25 private hospital chains in the UK, are now doing 500,000 elective procedures on behalf of the NHS at a cost of £18bn a year.
- One in every seven in-patient mental health beds are provided by US suppliers, costing the NHS £2bn a year, in this case with a profit margins of between 15 and 20%
- The Centene Corporation, a major US corporation with a value of around $40bn owned 56 GP practices in the UK, covering half a million patients – now sold on to a private equity firm.
- In dentistry, Portman Dental Care has 350 clinics, covering one and a half million patients.
- Palantir is another US company, given £360m to manage vaccine, waiting lists, population health and supply chain in the NHS. In 2023 it was given a £480m contract to run a data platform for sharing patients’ data, while a bid from a UK start up was rejected.
Overall, Puntis concluded, around one fifth of current spending on services goes to the private sector and the amount has increased over the years.
The PFI scam is an aspect of NHS financing which is not dealt with at all in the Darzi review. During the last Labour government, a large amount of public investment in schools, hospitals, prisons, etc, was based on the so-called Private Finance Initiative.
It meant that instead of publicly funding the investment, financed by borrowing at the normal bank rate, the private sector put in the initial capital investment, but the public authority concerned paid it back over 25, 30 or more years, and at a high rate of interest.
PFI has meant that some new hospitals have been paid for, but the NHS continues to pay to PFI shareholders for years afterwards. Just to take one example, Queen’s Hospital in Romford, Essex, was completed in 2006, but the contract period is 34 years. The building itself cost £266mn, but by the time the final payment is made – in 2041 – it will have cost the NHS a massive £2.4bn. PFI payments, in other words, are a key part of the river of money flowing out of the NHS and into private hands every year. A Labour government worth its salt would cancel these contracts forthwith.
The response of the Labour leadership to the Darzi report is alarming. There is no recognition at all of the dreadful role played by the private sector in plundering the NHS. On the contrary, Streeting and Starmer look like increasing private sector involvement. Significantly, Labour’s manifesto talked about “protecting a publicly owned and funded service” but not a publicly provided health service.
Some unions support Labour leaders who opposed their union policy
What should we do about this? First of all, socialists and trade union members should share the information on the websites of We Own It, the King’s Fund and other campaigning bodies.
It is particularly important that this kind of information is circulated in the health sectors of relevant trade unions. It is the ‘official’ policy for UNISON, GMB and Unite – all key unions in the NHS, and affiliated to Labour – to oppose outsourcing of services and contracts to the public sector. Yet the leadership of the first two of these unions continues to support Labour leaders who are directly opposed to their union policies and their members’ interests on this and other questions.
This information should also be shared in Constituency Labour Parties and where there are Labour MPs they should be challenged on the issue. Most Labour members would support the integration of the private sector into the NHS and the ending of outsourcing, in other words, return to the original principles of the NHS in 1948. This could easily be tested and expressed in resolutions and submissions to the Labour NEC and conferences.
Ironically, one thing the Darzi reports gets right, is that it says that the NHS model actually works. “…other health system models—those where user charges, social or private insurance play a bigger role—are more expensive.”
“It is not a question,” Darzi concludes, “…of whether we can afford the NHS. Rather, we cannot afford not to have the NHS…”
What we have to do is to make sure is that the NHS works better and is free at the point of use. That has to mean it is rid of the strangulation and parasitism of the private sector.
