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Think Carillion is bad? Wait until you see what the government wants to do with the NHS

Proposals for the health service will put billions of pounds of contracts into the hands of similarly structured organisations.

It increasingly looks like the collapse of Carillion will not only cost the UK many millions of pounds but also endanger the delivery of vital public services and projects. And yet, even as the government scrambles to clean up the mess left by the contractor’s failure, it is currently proposing to allow NHS services to be put into the hands of companies which operate in the same way.

Carillion already has a raft of NHS Private Finance Initiative (PFI) and Local Improvement Finance Trust (LIFT) contracts in the NHS, including owning and operating 11,000 hospital beds in a dozen NHS hospitals in England and Scotland as well as several General Practitioner (GP) surgeries and community services.

Under the PFI, builders, bankers and service operators like Carillion, rather than government, raised money and entered into long term 30-year contracts with public bodies to pay back the debt. The extortionate costs to the taxpayer of this private borrowing are well documented. In the case of the NHS, which has been paying consortium members including bankers and shareholders a high annual charge for private finance, this is fueling serious financial difficulties in many hospitals and across the NHS. With money diverted to private pockets, beds and services have closed and staff have been reduced.

Carillion has gone bust. Reminiscent of RBS in 2008, after the bank bought Dutch rival ABN AMRO, Carillion has been on a spending and borrowing spree. It has not just been raising money to pay for PFI, it has been borrowing millions of pounds and spending heavily to buy up companies accumulating debts of £1.5 billion.  Now the Carillion days are over, leaving hundreds of subcontractors and tens of thousands of employees in the dark and at risk. The taxpayer is expected to bail out projects in the UK, and there are similar problems shaping up for projects in Canada and Africa .

Carillion’s website proudly boasts that the great advantage of public-private partnership (PPP) is risk transfer, but when the chips are down the risks revert to the public. The mainstream narrative blames public sector contracts, but Carillion’s annual reports disguise the real story: enormous transfers of wealth from public contracts to shareholders and investors, including those companies that were bought out. These sort of wealth transfers from the NHS to private sector operators play out in sickeningly real terms as underfunding, growing deficits, cuts and closures in services and beds and the current NHS crisis.

But what the public haven’t yet been told is that soon almost all NHS services could be delivered under a similar structure, tens of billions of pounds worth of NHS and social care budgets farmed out with neither parliamentary scrutiny nor public consent.

In 2013 all NHS property (except for NHS Foundation Trusts) was transferred to NHS Property Services, a Department of Health owned company. It is charging market rents and inflated property management charges to NHS trusts and some GP practices. These buildings were bought and paid for by the taxpayer or through public subscription many decades ago. Now NHS Property Services is being fattened up for the market. Government plans the sale and disposal of NHS assets to facilitate new PPP which will, in turn, help more failing companies like Carillion or boost big startup projects like Virgin Healthcare. 

Not content with selling off the family silver and lumbering the NHS with exorbitant PFI, Health Secretary Jeremy Hunt and NHS England’s chief executive Simon Stevens have a new plan. Accountable Care Organisations (ACOs) which are the “next big thing” for the NHS. The government plans to roll up billions of pounds of NHS and adult social care funding and award giant commercial contracts to these ACOs for ten to fifteen years. ACOs are non-statutory bodies and can be established as special purpose vehicles, just like PFI operators. ACOs can include private insurance companies, property companies, banks, equity investors, and private health care companies as well as NHS hospital groups and GPs.

ACOs are an American import. In the US ACOs include groups of doctors, hospitals, and other providers. They operate in the most expensive and unfair system in the world, dominated by private health and insurance companies. So why would the government want to introduce ACOs to our NHS?

Stevens, the former boss of large American health corporation UnitedHealth says that “accountable care organisations or systems…will for the first time since 1990 effectively end the purchaser-provider split, bringing about integrated funding and delivery for a given geographical population”.

Only that can’t happen because commercial contracting is established in primary legislation. Implementation of the split, first introduced by the NHS and Community Care Act 1990, was completed by the 2012 Act with the abolition of the duty to provide a health service, and with removal of primary care trusts (PCTs).

We all support integration of health and community services in principle, but how does integration happen when ACOs would further fragment staff, services and care through ever-increasing subcontracting? And how do we unite the areas when health and social care have different population and funding basis? Social care is means-tested and charged for and health care is free-leading to ACOs potentially blurring the boundaries.

There are several reasons to be concerned about the attack on the fundamental principles of the NHS that ACOs involve. A full appreciation of the changes is hampered by the government and NHS England not having explained clearly to the public exactly what is being proposed.

This is why myself and four others including Professor Stephen Hawking have begun legal proceedings against Stevens and Hunt, crowdfunding £176,000 through over 6,000 donations. Our challenge is on the grounds that without an Act of Parliament these plans are unlawful, that there should be proper public consultation and that the principles which say decisions about our NHS should be clear and transparent have been breached.

This is something which affects everyone in England and as we face the catastrophic fallout from the collapse of Carillion it should be unthinkable to introduce more outsourcing and more long term, private sector contracts, especially when it comes to something as important as our NHS.

Allyson Pollock is professor of public health and director of the Institute of Health and Society at Newcastle University, and the author of NHS PLC.

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I'm not going to be General Secretary, but the real fight to change Labour is only just beginning

If Labour gets serious about a new politics, imagine the possibilities.

For a second time, I was longlisted for the role of General Secretary of the Labour Party this week. For a second time, just as in 2011, I was eliminated in the first round. The final shortlist now consists of two veteran trade unionist women leaders, Jennie Formby of the Unite union and Christine Blower - formerly of the National Union of Teachers and the Socialist Party. I met them both yesterday at the interviews; I congratulate them, and look forward to hearing more about their ideas for Labour party renewal.

Last week in both the New Statesman and LabourList, I explained why I thought we needed a General Secretary “for the many”. I set out a manifesto of ideas to turn Labour into a twenty-first century campaigning movement, building on my experience with the Bernie Sanders campaign, Momentum, Crowdpac, 38 Degrees and other networked movements and platforms.

I called for a million-member recruitment drive, and the adoption of the new “big organising” techniques which combine digital and face-to-face campaigns, and have been pioneered by the Sanders movement, Momentum, Macron and the National Nurses Union in America. I set out the case for opening up the party machine in a radical but even-handed way, and shared ideas for building a deeper party democracy.

I noted innovations like the Taiwanese government’s use of online deliberation systems for surfacing differences, building consensus and finding practical policy solutions. Finally, I emphasised the importance of keeping Labour as a broad church, fostering more constructive internal discussions, and turning to face outward to the country. I gladly offer these renewing ideas to the next General Secretary of the party, and would be more than happy to team up with them.

Today I am launching, a new digital democracy platform for the Labour movement. It is inspired by experience from Taiwan, from Barcelona and beyond. The platform invites anyone to respond to others’ views and to add their own; then it starts to paint a visual picture of the different groupings within the movement and the relationships between them.

We have begun by asking a couple of simple questions: “What do we feel about the Labour party and movement? What’s good, and what’s more difficult?” Try it for yourself: the process is swift, fun and fascinating. Within a few days, we should have identified which viewpoints command the greatest support in the movement. We will report back regularly on this to the media.

The Labour movement is over 570,000 members, thousands of elected representatives, a dozen affiliated unions and millions of Labour voters. We may disagree on some things; but hopefully, we agree on far more. Labour Democracy is a new, independent and trustworthy platform for all of us to explore our differences more constructively, build common ground, and share ideas for the future. I believe Labour should be the political wing of the British people, as close to the 99 per cent as possible – and it will ultimately only be what we make of it together.

Yesterday I spoke over Skype with Audrey Tang, the hacker and Sunflower Movement leader who is now Digital Minister of Taiwan. Audrey is a transparent politician, so she has since posted a video of our conversation on YouTube. I recommend watching it if you are at all interested in the future of politics. It concludes with her reflections on my favourite Daoist principle, that true leadership leaves the people knowing that they have made change themselves.  

This General Secretary recruitment process has been troubled by significant irregularities, which I hope the party learns from. The story is considerably more complex and difficult than is generally understood. I have spent considerable time in the last week trying to shine greater light on the process in the media and social media, and encouraging the national executive committee, unions and politicians to run a more open and transparent process. I even started a petition to the NEC Officers group, calling for live-streamed debates among the candidates for this crucial and controversial party management role. I very much hope that there is no legal challenge.

Most importantly, the last week has exposed a significant fault line in Labour between the new left and the old left. When Jon Lansman of Momentum entered the contest against the “coronation candidate” Jennie Formby, many people read this as a fight between two factions of the old left. But Jon’s intent was always to open up a more genuine contest, and to encourage other candidates – particularly women – to come forward. Having played the role only he could play, he eventually withdrew with dignity. His public statements through this process have been reflective of the best of the new politics. And despite our very different political journeys, he kindly agreed to be one of my referees.

There has been plenty of the old transactional machine politics going on behind closed doors in the last couple of weeks. But out in the open, the new left movements and platforms have shown their strength and relevance. Momentum emailed all its members encouraging them to apply for the role. On Facebook Live, YouTube and podcasts like All The Best, the Novara Media network has been thoughtfully anatomising the contest and what it means for the future of the left. Even the controversial Skwawkbox blog finally agreed to cover my candidacy, and we had a constructive row about the leaked memo I wrote for Corbyn’s office back in December about how to win the next election using data, organising and every new tool in the box.

I am worried about the old left, because I feel it is stuck in a bunker, trapped in a paradigm of hierarchical power and control. The new left by contrast understands the power of networks to transform conversations and win hearts and minds.

The old left yanks at levers, and brokers influence through a politics of fear and incentives. But this tired game is of decreasing relevance in this day and age. The new left has the energy, the reach, the culture and the ideas to build a new common sense in this country, and to win decisive victory for Labour and progressives in the next general election – if the old left will partner with it. 

I am keen to help. So are many others. I hope we can start to have a more constructive and equal conversation in Labour soon. Otherwise an exodus may begin before long; and no-one wants that.

Paul Hilder is an expert on new politics and social change. He is a co-founder of Crowdpac, 38 Degrees and openDemocracy. He has played leadership roles at, Avaaz and Oxfam, and was a candidate for general secretary of Labour in 2011.