"The NHS is being hollowed out from within; that's not efficiency." Photo: Getty
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NHS reform and the hollow marketisation myth

A metamorphosis is taking place; a mutation of the NHS from a public service into a lucrative marketplace.

When the chief executive of NHS England produces a 39-page, 15,000-word rescue plan for the health service that, a senior doctor later told me, “doesn’t even mention the real problem in the system”, you know something is up.

Not that it’s any great surprise. Simon Stevens isn’t likely to agree with my source that the real problem in the NHS is a prevailing ideological dogma that “private is good and public is bad” among top brass, nor that the aggressive marketisation programme currently underway is all based on a myth. The private healthcare man turned NHS-saviour has only been in his post for seven months after 10 years at global giant United Health Group, and old habits die hard.

But the real paradox at the heart of Stevens’ five-year plan is that he calls for ruthless efficiencies and then turns a blind eye to the sort of “grotesque financial waste” that consultant clinical oncologist and National Health Action Party (NHAP) co-leader Clive Peedell says is crippling the system.

Peedell says: “Wasteful internal markets, commissioning support units, management consultancy fees, the cost of procurement of clinical services, profit-taking by private providers, the cost of fragmenting pathways due to outsourcing components to private contractors, and PFI deals bankrupting our hospitals; they are draining billions from frontline care in our NHS”.

A metamorphosis is taking place; a mutation of the NHS from a public service into a lucrative marketplace. None of this is particularly new – but since the Health and Social Care Act kicked in two years ago, trusts have been legally obliged to compete with private providers over contracts, and take on the extra administrative costs of doing so. Allyson Pollock, professor of public health research at Queen Mary University of London, says: “It’s quite clear that the government wants to contract out as much as it can before the general election, but there’s no data about the costs for trusts such as lawyers and management consultants in doing this”.

And after a slow start, the scrum has really kicked in now. Campaign group NHS Support Federation has recorded five times more contracts coming onto the market between July and September this year, a cool £2bn’s worth, than in the first three months of life under the Health and Social Care Act when only £266m was up for grabs. Bound by competition laws, NHS trusts find themselves in the position of having to spend tens, maybe hundreds of thousands bidding to carry on running services they already deliver, or, even worse, to then lose out to private providers that have cherry-picked the contracts and put all of their corporate weight behind winning them.

Take Cambridgeshire and Peterborough for example, where a million pounds of taxpayer money was wasted on the procurement process of older people’s healthcare and adult community health services before the CCG finally decided that Cambridgeshire and Peterborough NHS Foundation Trust should carry on running the service.

Why are such tremendous burdens being overlooked by Stevens? Or the hideous levels repayments for the same PFI loans he advocated when he had Tony Blair’s ear back in the noughties? Why no mention of the £4.5bn a year that Calum Paton, Professor of Public Policy at Keele University, conservatively estimates is the cost of administering an internal market he describes as “costly and of dubious effectiveness”, or the extortionate legal fees just being in that market forces trusts to stump up?

GP and anti-privatisation campaigner Dr Bob Gill says: “A market doesn’t work in healthcare; the administration of it just drives up costs. The NHS is being hollowed out from within, assisted by people from banking and the private sector who are dumbing down the service and delivering everything as cheaply as possible. That’s not efficiency”.

Neither is, Gill argues, a system in which a hollowed-out NHS has to pay when those private companies fail in their duty. Private companies like Vanguard Healthcare, which had its contract with Musgrove Park Hospital in Taunton terminated after a series of post-surgery complications, leaving Musgrove medical director Dr Colin Close admitting, “any financial responsibility would rest with us”.

How is all this playing out? Kathryn Anderson is a nurse at the Royal Free Hospital and NHAP general election candidate – in Iain Duncan Smith’s constituency. She says that far from bringing in greater efficiency or care, these new wasteful costs are having the opposite effect in the wards. “All that money comes from the frontline,” she says. “It comes from nurses and HCAs and doctors’ pay, and from drugs that don’t get purchased. You can’t run the NHS and expect it to perform if you flush the money out of the system, it just doesn’t work. We see this every day and it’s getting worse”.

The Conservatives are keeping very quiet about all this, perhaps wisely. With one hand Lansley and Hunt have enforced pay freezes on frontline staff claiming the pot is empty, and with the other, enforced an extortionate tendering process that has wasted vital funds. Just the cost of the top-down reorganisation alone, which a senior Tory MP recently described as the party’s “biggest mistake” in government, is estimated at £3bn.

On the pretext that the NHS is an egregious waste of public money – despite the fact that in 2012 the UK spent less on healthcare as a percentage of GDP than any other G7 country – the system has been altered from within. The result is a conduit to a £100bn-a-year pot with an NHS stamp on the side, which through some alchemy turns taxpayer money into private profits.

Stevens’ five-year plan is full of hope and some entirely sensible ideas to improve the system. But with no mention of any of the debilitating costs of running the new marketised system, which Unite head of health Rachael Maskell says could be as high as £1bn by the time of the election, nor the outcry from the profession about marketisation which the BMA itself is campaigning to see reversed in law, it seems a little hollow to say the least.

Benedict Cooper is a freelance journalist who covers medical politics and the NHS. He tweets @Ben_JS_Cooper.

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Europe’s last Blairite: Can Manuel Valls win the French presidency?

He first made a name for himself protesting against halal supermarkets. Now, he could be the man to take down François Hollande.

The election of François Hollande as the president of France in 2012 coincided with the high-water mark of Ed Miliband’s leadership of the Labour Party. That year, Labour posted its best local election results in 17 years, gaining 823 councillors and winning control of 32 councils in a performance that has not yet been surpassed or equalled.

Gazing across the Channel, the Milibandites were given hope. Hollande showed that a wonkish career politician could triumph over a charismatic centre-right incumbent.

The UK’s shattered Blairites looked to a different star rising in French politics: Manuel Valls. At the time of Hollande’s victory, Valls was the mayor of Évry, a small suburb of Paris, where he made a name for himself by campaigning against halal supermarkets.

His father, Xavier, was a Spanish painter and his mother, Luisangela, was Swiss-Italian. They met and married in Paris, and Valls was born in Barcelona while the couple were on holiday.

In 2009 Valls urged the Parti Socialiste (PS) to drop the adjective “socialist” from its name, and he ran for the presidential nomination two years later on what he described as a Blairiste platform. This included scrapping the 35-hour working week, which hardly applies outside of big business and the public sector but carries symbolic weight for the French left. Valls’s programme found few supporters and he came fifth in a field of six, with just 6 per cent of the vote.

Yet this was enough to earn him the post of interior minister under Hollande. While Valls’s boss quickly fell from favour – within six months Hollande’s approval ratings had dropped to 36 per cent, thanks to a budget that combined tax rises with deep spending cuts – his own popularity soared.

He may have run as an heir to Blair but his popularity in France benefited from a series of remarks that were closer in tone to Ukip’s Nigel Farage. When he said that most Romany gypsies should be sent “back to the borders”, he was condemned by both his activists and Amnesty International. Yet it also boosted his approval ratings.

One of the facets of French politics that reliably confuse outsiders is how anti-Islamic sentiment is common across the left-right divide. Direct comparisons with the ideological terrain of Westminster politics are often unhelpful. For instance, Valls supported the attempt to ban the burkini, saying in August, “Marianne [the French symbol] has a naked breast because she is feeding the people! She is not veiled, because she is free! That is the republic!”

By the spring of 2014, he was still frequently topping the charts – at least in terms of personal appeal. A survey for French Elle found that 20 per cent of women would like to have “a torrid affair” with the lantern-jawed minister, something that pleased his second wife, Anne Gravoin, who pronounced herself “delighted” with the poll. (She married Valls in 2010. He also has four children by his first wife, Nathalie Soulié.)

Yet it was a chilly time for the French left, which was sharply repudiated in municipal elections, losing 155 towns. Hollande sacked his incumbent prime minister, Jean-Marc Ayrault, and appointed Valls in his place. He hoped, perhaps, that some of Valls’s popularity would rub off on to him.

And perhaps Valls, a student of “Third Way” politics, hoped that he could emulate the success of Bill Clinton, who turned sharply to the right following Democratic losses in the US 1994 midterm elections and won a great victory in 1996. Under Valls’s premiership, Hollande’s administration swung right, implementing tough policies on law and order and pursuing supply-side reforms in an attempt to revive the French economy. Neither the economic recovery, nor the great victory, emerged.

With the date of the next presidential election set for 2017, Hollande was in trouble. His approval ratings were terrible and he faced a challenge from his former minister Arnaud Montebourg, who resigned from the government over its rightward turn in 2014.

Then, on 27 November, Prime Minister Valls suggested in an interview that he would challenge the incumbent president in the PS primary. After this, Hollande knew that his chances of victory were almost non-existent.

On 1 December, Hollande became the first incumbent French president ever to announce that he would not run for a second term, leaving Valls free to announce his bid. He duly stood down as prime minister on 5 December.

Under the French system, unless a single candidate can secure more than half of the vote in the first round of the presidential election, the top two candidates face a run-off. The current polls rate Marine Le Pen of the Front National as the favourite to win the first round, but she is expected to lose the second.

Few expect a PS candidate to make the run-off. So Hollande’s decision to drop out of his party’s primary turns that contest into an internal struggle for dominance rather than a choice of potential leader for France. The deeper question is: who will rebuild the party from the wreckage?

So although Valls has the highest international profile of the left’s candidates, no one should rule out a repeat of his crushing defeat in 2011.

He once hoped to strike a Blairite bargain with the left: victory in exchange for heresy. Because of the wasting effect of his years in Hollande’s government, however, he now offers only heresy. It would not be a surprise if the Socialists preferred the purity of Arnaud Montebourg. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump