Published: 22/04/2002, Volume II4, No. 5902 Page 23

Back from the White clan's annual homecoming in Cornwall, my first priority when starting to bash the phone on Sunday night was not the health of the NHS in my absence.

It was to check the truth (or otherwise) of Easter-week reports of prime minister Tony Blair's Uturn on the promise of a referendum on the EU constitution.

As you now know, they are true.

But it is worth noting here that John Reid appears to have been one of the Cabinet ministers in the know.Mr Blair consulted his hard-nosed realist of a health secretary on how best to escape his dilemma: could he avoid a Euro-vote he's likely to lose? He did not consult everyone.

Several senior ministers to whom I spoke were as much in the dark as I had been in St Ives. I mention it to make the point that Mr Reid retains the confidence of Number 10, he is still a minister on the up-curve. As such he is not attracting the kind of sniping that former health secretary Alan Milburn drew after his recent plea for a better work-life balance in Britain - 12 months' paternity leave, for heaven's sake!

So we need not worry too much whenever private healthcare contracts run into trouble, as the Calgary-based Anglo-Canadian consortium did last week (news, pages 3-4, 15 April).

Health minister John Hutton was forced on to the radio to explain why its bid to do 30,000 ops a year at three London hospitals had been 'de-selected'.

That does not mean that Anglo-Canadian has dropped out of the picture entirely.

'They're still players and may pick up some work, ' stresses my man at the ministry (MMAM).

But does it validate the suspicions of ex-health secretary Frank Dobson, Commons health select committee chair David 'the Viking'Hinchliffe, and others, that 'even when cherry-picking' the private sector can't match NHS unit costs?

I suspect the answer to that is 'sometimes'. Private-sector performance is patchy, as it is within the public sector as new forms of provision evolve.

Look how struggling Jarvis is abandoning the rail maintenance business, but hanging on in the student accommodation market.

In this case (remember that negotiations with Mercury Health collapsed in February) the mismatch seems to have been with the Royal National Throat, Nose and Ear Hospital in King's Cross, rather than at troubledbut-improving Chase Farm Hospital, Enfield, or King George Hospital, Ilford.

It wanted a new ward built rather than extra surgical capacity flown over from Canada, I am told.

If the two criteria deployed to justify paying premium rates - doing the job quickly and using foreign surgeons (ie extra capacity) - are not met, then there is no basis for agreement. 'We are not cutting a deal at any price to get the private sector in, ' says MMAM. Quite so. A number of independent treatment centre deals are now up and running, mainly within the NHS, though Netcare's mobile cataract team - so far unique - is said to be making a 'massive impact' on waiting lists in Kent, always a difficult healthcare county.

That does not mean that the private sector will impact directly on most patients/voters by polling day, barely a year away now if 5 May 2005 is inked in instead of merely pencilled.How could it? Even with cheap EasyJet flights to bring in doctors from, say, Germany to tackle those West Midland knee-and-hip waiting lists, outsiders can only do a modest share of the NHS's 4 million annual procedures: 250,000 or 6 per cent is the current target.

The real impact is meant to be on voter perception of the NHS's performance, allied with choice, however remote in practice that Joe Public will have his op done at that smart private clinic with its car park full of BMWs. But choice also means competition - 'contestability' in Blairspeak.

Which may be why Nuffield Hospitals has signed a deal to do elective orthopaedics at or below the NHS tariff. Private ministerial glee will be considerable.

Never mind Frank Dobson, even chancellor Gordon Brown may have to admit that letting in foreign health providers has, as Mr Milburn claimed, forced more expensive UK rivals to raise their game and lower their prices.

Nuffield has taken on its British consultants and taught them the market lesson learned long ago by humble steel or car workers.

Rather than see their hospitals ('glorified hotels'murmurs MMAM) stand idle, Nuffield's go-getting management seems to be going for the biggest ready-cash customer of them all:

Mr Reid. l