It was the Labour party that decided to involve private finance in the NHS. It must pick up the pieces. Photo: Getty
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To save the NHS, Labour must face the ugly truth of PFI debts

Labour is right to focus on rescuing the NHS from the harm done by this government, but must face the truth that it was the party that introduced private finance into the health service in the first place.

Ed Miliband has said that this is going to be an “NHS summer”. He has sensed, rightly, that there’s something in the air, a tension over the precarious health service.

Strain on services is rising, the number of hospitals in the red is surging up, patient concern is growing and doctors are quitting in disgust at the ominous developments from the top. As much as the coalition would love to suppress them, the figures point towards a potential full-blown crisis before the parliamentary term is through. In August, campaigners will march for 300 miles, through 23 towns from Jarrow to London to press home these fears, and there are activists up and down the country straining just to get the same message across to the public: the NHS is in danger.

Labour has already made some firm commitments to undoing some of the harm done by the coalition. Andy Burnham has said in public, and behind closed doors to NHS activists, that he will repeal the Health and Social Care Act, and work to “scrap Cameron’s NHS market”. And the party has brought forward Clive Efford’s private member’s bill to rewrite rules forcing NHS contracts onto the market.

Labour should be commended for this. But if Miliband is serious about rescuing the NHS, there is an ugly truth to face. The NHS is riddled with extortionate debt from decades of misguided PFI deals. NHS hospitals owe £80bn in PFI loan unitary charges – in other words, the ongoing costs of maintaining PFI hospitals and paying back the loans. Next year alone, trusts will make some £2bn in repayments. Trusts like Peterborough and Stamford Hospitals NHS Trust, which is locked into making £40m in repayments a year on the PFI it took for Peterborough City Hospital, or Sherwood Forest NHS Trust, which is spending 15 per cent of its annual budget on the annual repayments on a PFI loan it took to expand the King’s Mill Hospital, and so on.

But there are plenty who do gain. The initial investment made by PFI companies is paid back in spades. As Joel Benjamin of Move Your Money points out: “Typically the unitary charge is three to five times the capital cost, and on more egregious PFI projects as high as seven times”.

The even uglier reality for Miliband is that the New Labour era was a golden age for the PFI. The modern PFI is the child of John Major’s Conservative government, but it was adopted and thrived under Tony Blair and Gordon Brown. Between 1997 and 2008, 90 per cent of all hospital construction funding was under PFI agreements, which paid for 75 per cent of all hospitals built.

The only positive, of course, is that 101 new hospitals were delivered in this time. New Labour invested heavily in the NHS, even if it did bring in some marketisation at the same time. Unlike this government, which has replaced marketisation with full-blown privatisation, and effectively cut budgets, especially for those with PFI debts, whose repayment rates are tacked to inflation.

Yet through a sustained campaign of attrition, the coalition has managed to shift the blame for “shortfalls” onto beleaguered health service staff and the principle of public care, and totally ignored the devastating role of the private finance cancer at the heart of it all. The next step is to present that same finance as the cure, and drive trusts that have been forced to cut back services just to balance the books straight into the waiting arms of private providers.

Figures published by the Nuffield Trust out today reveal the true extent of austerity’s toll on the NHS. In its report, Into the Red, the Nuffield Trust spells out how hospitals and trusts faced with austerity were just keeping their heads above water until last year, when “cracks” began to show. In 2013/14, a further 21 trusts had sunk into the red from the previous year, and overall trusts recorded a deficit of £100m. And the report reveals another sobering figure: of the health and social care leaders surveyed, 70 per cent said that they think more providers will be forced into the red to continue to provide high-quality care, if current levels continue.

Miliband has a real opportunity now: to rescue the NHS from another five years of this, and make huge political gains in the process. He could pledge to reform the PFI system, renegotiate the terms of existing loans agreed under duress to get payments down to “fair value”, which could even lead to a refund for some hospitals, or as has happened in selected cases, use public money to bail out hospitals crippled by debt. After all, it was good enough for the banks.

Not only would it free dozens of trusts like Peterborough and Sherwood Forest from the abject spiral of debt they’re in – and the negative impact that debt is having on healthcare – it would undermine the odious and transparently ideological argument that cuts to frontline services are needed to reduce the deficit. But that will involve facing up to the fact that it was his party, albeit under a very different leadership, that was so keen to get private finance involved in the first place. It would be a gutsy move, but a potential high earner. And it might just save the NHS.

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

Photo: Getty
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The Prevent strategy needs a rethink, not a rebrand

A bad policy by any other name is still a bad policy.

Yesterday the Home Affairs Select Committee published its report on radicalization in the UK. While the focus of the coverage has been on its claim that social media companies like Facebook, Twitter and YouTube are “consciously failing” to combat the promotion of terrorism and extremism, it also reported on Prevent. The report rightly engages with criticism of Prevent, acknowledging how it has affected the Muslim community and calling for it to become more transparent:

“The concerns about Prevent amongst the communities most affected by it must be addressed. Otherwise it will continue to be viewed with suspicion by many, and by some as “toxic”… The government must be more transparent about what it is doing on the Prevent strategy, including by publicising its engagement activities, and providing updates on outcomes, through an easily accessible online portal.”

While this acknowledgement is good news, it is hard to see how real change will occur. As I have written previously, as Prevent has become more entrenched in British society, it has also become more secretive. For example, in August 2013, I lodged FOI requests to designated Prevent priority areas, asking for the most up-to-date Prevent funding information, including what projects received funding and details of any project engaging specifically with far-right extremism. I lodged almost identical requests between 2008 and 2009, all of which were successful. All but one of the 2013 requests were denied.

This denial is significant. Before the 2011 review, the Prevent strategy distributed money to help local authorities fight violent extremism and in doing so identified priority areas based solely on demographics. Any local authority with a Muslim population of at least five per cent was automatically given Prevent funding. The 2011 review pledged to end this. It further promised to expand Prevent to include far-right extremism and stop its use in community cohesion projects. Through these FOI requests I was trying to find out whether or not the 2011 pledges had been met. But with the blanket denial of information, I was left in the dark.

It is telling that the report’s concerns with Prevent are not new and have in fact been highlighted in several reports by the same Home Affairs Select Committee, as well as numerous reports by NGOs. But nothing has changed. In fact, the only change proposed by the report is to give Prevent a new name: Engage. But the problem was never the name. Prevent relies on the premise that terrorism and extremism are inherently connected with Islam, and until this is changed, it will continue to be at best counter-productive, and at worst, deeply discriminatory.

In his evidence to the committee, David Anderson, the independent ombudsman of terrorism legislation, has called for an independent review of the Prevent strategy. This would be a start. However, more is required. What is needed is a radical new approach to counter-terrorism and counter-extremism, one that targets all forms of extremism and that does not stigmatise or stereotype those affected.

Such an approach has been pioneered in the Danish town of Aarhus. Faced with increased numbers of youngsters leaving Aarhus for Syria, police officers made it clear that those who had travelled to Syria were welcome to come home, where they would receive help with going back to school, finding a place to live and whatever else was necessary for them to find their way back to Danish society.  Known as the ‘Aarhus model’, this approach focuses on inclusion, mentorship and non-criminalisation. It is the opposite of Prevent, which has from its very start framed British Muslims as a particularly deviant suspect community.

We need to change the narrative of counter-terrorism in the UK, but a narrative is not changed by a new title. Just as a rose by any other name would smell as sweet, a bad policy by any other name is still a bad policy. While the Home Affairs Select Committee concern about Prevent is welcomed, real action is needed. This will involve actually engaging with the Muslim community, listening to their concerns and not dismissing them as misunderstandings. It will require serious investigation of the damages caused by new Prevent statutory duty, something which the report does acknowledge as a concern.  Finally, real action on Prevent in particular, but extremism in general, will require developing a wide-ranging counter-extremism strategy that directly engages with far-right extremism. This has been notably absent from today’s report, even though far-right extremism is on the rise. After all, far-right extremists make up half of all counter-radicalization referrals in Yorkshire, and 30 per cent of the caseload in the east Midlands.

It will also require changing the way we think about those who are radicalized. The Aarhus model proves that such a change is possible. Radicalization is indeed a real problem, one imagines it will be even more so considering the country’s flagship counter-radicalization strategy remains problematic and ineffective. In the end, Prevent may be renamed a thousand times, but unless real effort is put in actually changing the strategy, it will remain toxic. 

Dr Maria Norris works at London School of Economics and Political Science. She tweets as @MariaWNorris.