As Carillion goes bust, Andy Cowper busts some of the resultant conspiracy theories doing the rounds about the private sector’s attempts to privatise the NHS

The profit making private sector’s great, really. You’ve got to “heart” it. It brings you General Medical Services general practice, most NHS retail pharmacy, dentistry, optometry – and of course HSJ. (Just imagine how fantastic a nationalised source of NHS news, analysis and comment would be.)

Other perspectives are of course available. Here’s one.

The profit making private sector’s an evil conspiracy to “privatise the NHS”, really. The hated NHS internal market is the work of Satan; competition in the NHS likewise. Private finance initiatives are a rip off, and most of the profit is now in offshore hedge funds. Sustainability and Transformation Plans and Accountable Care Systems or Organisations are evil American privatisation schemes. The downfall of Carillion proves that all of this is completely true.

Which of these should we believe?

PFI ≠ Privatisation

Well, firstly, let’s get our terms right. Privatisation means creating and selling shares in a formerly taxpayer owned institution. This has never been seriously planned for the NHS and has never happened. 

And one of the reasons it couldn’t happen just now would be that the PFI contracts are all ultimately backed by the state. So, if anyone were in reality wanting to privatise the NHS, PFI contracts pretty much mean that they couldn’t. Because the state is fundamentally baked into PFI deals.

Irony, eh?

But once we move past that impossibility, and imagine even harder that the private sector had the capability to start running the NHS (which it absolutely doesn’t), we come down to risk appetite among private investors.

Two key words here: Circle, Hinchingbrooke. Some people seem to think that private sector investors are very stupid. A few indeed are, but they don’t last. Most are not, and have looked at the feasibility of taking on a universal population coverage requirement (and that’s what the NHS is, more or less); run a few numbers on demographics, need and likely funding envelope; and promptly run far away.

(Private sector investors want low risk, high throughput areas where assets can be sweated to add value. Stuff like independent sector treatment centres, and looking at waiting lists, we could be going to need some more of these unless very long NHS waits are to become the new normal again.)

So, when you look at the universal service obligation that is baked into the NHS concept in law and more importantly, in the minds of taxpayers and voters, it’s high time that people stopped talking nonsense about “privatising the NHS”, because the UK private sector doesn’t want to provide universal coverage free at the point of need.

If those people want to talk about “abolishing the NHS”, then maybe we could listen. Of course, they need to see how that would focus group with voters. Here’s a clue: dreadfully.

As for PFI, yes, we’ve always known that the government (if controlling its currency and commanding global market confidence) can always borrow money more cheaply than the markets, but for a bit of perspective, have a read of iridescent economist nonpareil John Appleby’s excellent piece here.

Laws

Of course, the communication of STPs and ACOs to the service and the public has struggled to reach the level of the catastrophic. Of course, in an NHS under huge pressure due to culture, workforce planning, innovation deserts and major demand resource mismatch, this left a fertile and uneven playing field for conspiracy theorists to take. Of course, they have taken it.

Here’s another irony: the 2003 and 2012 Health And Social Care Acts basically mean that the move to STPs and ACOs is purely meant to be a covert way of putting the hated NHS internal market onto the political Liverpool Care Pathway.

(The hated NHS internal market was one of the first bits of “privatising the NHS” remember? Keep up!)

The 2003 Act put a statutory duty on NHS foundation trusts to maximise their income.

The 2012 Act put a statutory duty on the NHS to prevent anticompetitive behaviour.

Both of these primary legislative requirements are orthogonal to the move to a co-operative, planned, dare we say “integrated” (dare! dare!)? version of the NHS.

It’s a funny old world.

So, there you go: the NHS is not being privatised, and you can thank the “privatising the NHS” PFI and 2003 and 2012 Health And Social Care Acts for that.