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Independent contractors and the NHS

Are independent contractors really part of the NHS? The answer, traditionally, has been “yes, when convenient; no, when not”.

General practice, for instance, can either be the core of the local NHS, or a bastion of fearless independence, or both, depending on what is expedient. Similarly, for a hospital consultant there is no inherent contradiction between drawing an NHS salary and maintaining a private practice.

Formally, general practice has retained independent contractor status since the creation of the NHS, along with dentists, pharmacists and opticians. It is jealously guarded, especially by the older generation of doctors. Yet nearly all GPs now consider themselves “part of the NHS”, if not indeed its natural leaders.

Of course, it also depends what you mean by “the NHS”. It is not just a grand legacy of the 1940s: it is an employer. Once the NHS was virtually the sole employer of healthcare staff, although agency nurses and locum doctors have always been with us. But with compulsory competitive tendering for support services in the 1980s, many porters, cleaners, cooks and others left direct NHS employment.

After the 1990 purchaser-provider split, more care was bought in, using NHS money, from what came to be known as “the independent sector”. More recently the trend has been “outsourcing”, based on the notion that anything “non-core” - payroll processing, perhaps, or estates management - might reasonably be purchased from a commercial supplier.

Are these service providers “the NHS” in any meaningful sense? The hospital catering staff who transferred under TUPE in the 1980s to, say, Gardner Merchant, were NHS people. How much of their culture, their values, or even their terms and conditions have survived in Gardner Merchant’s successor organisation, Sodexo? And do the private nursing home placements commissioned by primary care trusts espouse “NHS values” or simply satisfy a tender specification?

But should it matter to NHS patients if porters and cleaners work for commercial companies, or nurses come from an agency? Should it make any difference to NHS employees if their payroll is processed in Bangalore?

Over perhaps 25 years, the NHS has moved from being an integrated healthcare system to being a huge government fund, buying in whatever it needs from “any willing provider”. The coalition government plainly intends to take this process to its logical conclusion. If you are at present an NHS employee, there is a fighting chance that by 2015 you will not be. Consider:

  • PCTs are soon to be replaced by GP consortia. These will be statutory public bodies, it seems, but will buy in most of their management and support.
  • All NHS trusts are seemingly to become foundation trusts, from which the secretary of state intends “to create the largest social enterprise sector in the world” - although their governance is as yet unclear.
  • Comfortable bolt holes in NHS quangos are disappearing.
  • There is mounting pressure to make full use of shared services and other outsourcing.

Tempted to escape into local government? The same is happening there. Last month Suffolk County Council decided to outsource most services to commercial providers or social enterprises. Council leader Jeremy Pembroke’s statement has a familiar ring: this follows “the coalition government’s priority to reduce the deficit and the size of the state”.

Here is the brutal truth. Beyond the immediate savings imperative, the coalition has two strategic aims that are unlikely to alter. One is “small government”: the notion that the state simply shouldn’t be in the business of doing things that could reasonably be done by some other organisation. The other is reducing the public sector pension burden.

This is scary stuff if you work for the NHS, but does it truly undermine that slippery concept of “NHS values”? Frankly, it is hard to see why it should. The principle of services being delivered by in-house staff was abandoned long ago. Working with 25 per cent agency staffing meant a dilution of quality but became a necessity. Meagre staffing levels, minimum wages and demoralising working practices among cleaners and porters harmed the patient experience. But will patients even notice if managers and clinicians are employed by Serco or Capita, and there are not quite so many of them?

The doctors and nurses and therapists might kick up, though. Especially when they realise what is going to happen to their pay and pensions.

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