2 more NHS hospitals already considering private ownership

The SKWAWKBOX blog last month covered the betrayal of the country by LibDem peers who voted through the government’s ‘section 75‘ measures designed to parcel up the NHS for privatisation by forcing Clinical Commissioning Groups (CCGs) to put all NHS services out to tender and include private bidders.

This process was foreshadowed, by a few weeks, by the decision by the supposedly ‘independent’ team appointed to review the decision to break up Mid Staffs NHS services in spite of massive opposition from the local people. These ‘independent’ reviewers (who were the same people who made the original decision!) have put out an invitation to private providers to express their interest in taking over the broken-up services.

But this is not the only ‘example in microcosm’ of the government’s vision of how health services should look in the all-too-imminent future.

There has been very little coverage of this in the mainstream media, so you may not be aware of it, but (at least) two NHS hospitals are already considering what amounts to handing themselves over to private ownership in response to the war of financial attrition and ‘marketisation’ to which they are being subjected.

Weston

Weston Area Health NHS Trust has announced that, as a small DGH (district general hospital), it is unable to achieve the Foundation Trust status that the Health and Social Care Act 2012 (HSCA) mandates that all NHS acute (hospital) Trusts must achieve by April next year. As a result, it is inviting ’expressions of interest’ from the ‘health market’:

Midlands and East Strategic Projects Team (SPT) on behalf of NHS South, the NHS Trust Development Authority and Weston Area Hospital NHS Trust, is sounding the market providers for expressions of interest to engage in a competitive tendering process to find a partner organisation to deliver its requirements by either i) an acquisition by another NHS Acute Trust, Foundation Trust or other NHS Health Body; or (ii) an operating franchise.
..
NHS South commissioners and Weston Hospital NHS Trust agreed that a market procurement solution should be sought for Weston Area Health NHS Trust.

In other words, the hospital is offering private providers a ‘franchise’ to use its name and its NHS ‘brand’ to provide services for profit – perhaps by buying another hospital to run alongside it. The hospital board insists that

the Trust must and will continue to provide NHS services for NHS patients, and that whatever option is finally selected, all staff and assets will remain within the NHS

But if it walks like a private franchise.. you know how it goes. This measure merely illustrates the innate deception in the government’s plans (already well underway) to allow private providers to ‘badge’ themselves as NHS institutions, even while they are taking profits that could be spent in providing front-line services.

George Eliot

The George Eliot Hospital (GEH) NHS Trust’s website carries the following statement, under a headline of “Trust given green light for future plans“:

The Trust has announced they are moving forward with their plans to seek a strategic partner to secure a sustainable future for its services and the care it provides to local people after receiving agreement to proceed.

George Eliot’s Board has agreed that it is in the best interests of the hospital, its patients and staff to seek a partner via a competitive procurement process.  This enables both NHS and non-NHS healthcare providers to make proposals and for the Trust to ensure that it can choose the best solution to achieve clinical and financial sustainability.

The phrasing here, by including ‘both NHS and non-NHS‘, is extremely deceptive. All NHS Trusts are under severe financial pressures at the moment, especially because the Treasury routinely ‘claws back’ any financial surplus from those Trusts who manage to balance their books. In this context, it is extremely unlikely that any other NHS Trust is going to express any interest.

This means that GEH is the latest in what is likely to become an extremely long list of NHS hospitals and under services coming up for grabs by private health operators.

Does it work?

A key question in all of this is, ‘Does it work?’. Are ‘franchising’ or other forms of privatisation likely to resolve financial problems and lead to better, more secure health services for patients?

There is one case study that we can already refer to: Hinchinbrooke. This hospital was handed over to private health company Circle from late 2011 into early 2012, amid much fanfare about how a private operator would run the hospital more efficiently than the ‘bureaucracy-ridden’ NHS.

However, in November last year the National Audit Office (NAO) published its audit report of the hospital and raised serious concerns:

Circle plans to achieve £311 million in projected savings over the ten-year life of the franchise, which is unprecedented as a percentage of annual turnover in the NHS..on an annual income of around £73 million

£311 million over 10 years means an average saving of £31.1 million per year – compared to a previous annual income of £73m – so around 43% of the Hinchingbrooke’s annual income before its privatisation. Even compared to the enhanced income of £107m that was granted to Circle to take over the hospital, the cuts targeted by Circle represent 29%.

Under no circumstances can cuts of 29-43% be made without adverse impact on services and on the patients who rely on them.

The NAO calls these savings ‘unprecedented’. They also appear to be unachievable. According to the NAO

the Trust had generated an in-year deficit of £4.1 million by September 2012, which was £2.2 million higher than planned

So, according to the NAO, Circle promised an ‘unprecedented’ level of cuts – and has been unable to deliver them. If it succeeds in its plan, the people who depend on Hinchingbrooke face massive reductions in their services – and if it fails, a hospital has been handed over to a private company for supposed ‘inefficiency’ and financial failings – for it to then fail to deliver promised efficiencies.

This is just common sense (though apparently not that common). If a non-profit company needs a certain level of funding to deliver services, a company that needs to take out money to deliver profits to shareholders is not realistically going to be able to deliver the same services at lower costs – even if it was true that private companies are more efficient, which last years G4S Olympic security debacle showed to be anything but the case.

When the government is obviously bent on a drastic increase in NHS privatisation, this can only be bad news for patients – and for their local economies, as less money will circulate into them via wages etc as private companies look to maximise profits in every possible way.

The plans mooted by the boards of these two hospitals are not directly linked to the recent ‘secondary legislation’ forced through under section 75 of the HSCA, but they do give a glimpse into the inexorable direction of travel that has been initiated in the NHS by the government’s Tory component, aided and abetted by large elements of the LibDems in the Commons and the Lords.

This constant and accelerating movement toward ever-increasing privatisation that will be difficult and expensive, if not impossible, to reverse by the next government, shows clearly how essential it is to carry the fight to the government and its agencies such as Monitor. The NHS Constitution is one of the last remaining – and perhaps most difficult for the government to remove – repositories of rights for ordinary people to insist on a truly national, truly public NHS.

CCGWatch has been set up to enable local communities to harness those rights to defend the NHS, and to prevent many more Hinchingbrookes, Westons and GEHs. If you are able to do so, please use the PayPal link on the right of this page to make a one-off or regular donation to help make it possible to conduct this fight in as many areas as need it.

10 thoughts on “2 more NHS hospitals already considering private ownership

  1. Pingback: 2 more hospitals considering private ownership | The SKWAWKBOX Blog

    • That would be bad enough, but I think you’ll be surprised. The opportunity is there now, and private providers know it won’t be if Labour win the next election. They’ll grab anything going with both hands while they can.

  2. ‘ The NHS Constitution is one of the last remaining – and perhaps most difficult for the government to remove – repositories of rights for ordinary people to insist on a truly national, truly public NHS.’[above]

    Seems like any tom dick or harry can re-write the NHS constitution:
    http://www.telegraph.co.uk/health/healthnews/9962200/Hunt-drops-clause-that-puts-NHS-patients-first.html
    and
    ‘Though there is the opportunity to opt out of system, despite huge protest, MPs intend to rewrite the NHS constitution to presume patient consent.’
    http://www.newstatesman.com/blogs/staggers/2012/08/sale-nhs-records-condition-morally-dubious

    Neither promise nor manifesto[nor constitution] is any safeguard.We are habitually lied to,deceived and manipulated by our government and by our mps.The system is corrupt and broken and if not changed will deliver the same level of corruption,lies and deceit whoever is in power.
    Any talk of improvement is like organising a gala on thin ice.The base material is flawed.The experiment is ended.It doesn’t work.Let’s move on now rather than put up with more unnecessary corruption and incompetence from bought,incompetent government and politicians.

  3. Pingback: 2 more NHS hospitals already considering privat...

  4. Why do you think that a private provider will grab profits with both hands? These hospitals are not financialy sustainable and in debt. Hinchingbrooke has £40M worth of debt before Circle make any profit from it. The NHS system has not worked for them.
    If you look at Hinchingbrooke its quality has risen massively. They have one of the best A&E in the country, and one of the highest net promoter (customer experience) scores.
    Maybe these hospitals should stay as NHS and continue to fail till they are closed?

    • Circle plan to make profits by slashing around 35% of costs at Hinchingbrooke. That inevitably means fewer, and lower-paid staff, and less availability of treatment.

      Private providers have already expressed an interest in running Weston hospital. If they didn’t expect to make a profit, they wouldn’t be interested – that’s the nature of a commercial company. Altruism is not their purpose.

      Hospitals are failing because they’re deliberately being starved into failure in order to set them up for privatisation. You’ve evidently fallen for the ploy.

      • Nope, your just seeing what you want to see.
        The NHS is failing as a whole because its business model doesn’t work. Circle cannot make any money till the £40M is cleared. Why not let them try? The current NHS had no solution except to close it. They aren’t hurting services, infant take a look and you will see the improvements they have made such as consistently one of the best A&E in the country, top 10 maternity, award winning restaurant, etc etc etc
        It’s hard for people to accept but NHS managers and the business model they have are doomed to failure. There will be more Trusts heading his way. But remember, it’s the same NHS managers running Hinchingbrooke – just a different business model

        • You’ve bought into the Big Lie, mate. The NHS is not a business, and it doesn’t have a ‘business model’. It’s an essential service – and we’re either prepared to fund it properly, or we’re not. This govt is not.

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