Monday 9 February 2015

Labour's share of the blame for NHS problems

The NHS.  It appears to be the heart of political debate and there is no doubt that it is in difficulties.  Roy Lilley caricatured the problems last week, but he's essentially right - the NHS institutions are pulling in different directions, and the multi-headed responsibility makes it very hard to shift direction, divided between the CQC, Monitor, NHS England and the Department of Health.

Then you come to the question of whose fault it is.  Because, listening to the Labour Party, you might almost believe they were the thin red line which separates the NHS from privatisation, vivisection and disaster.

If you settle down for a moment and list the major forces - at least those which governments can change - which have caused difficulty, things are not quite as clear cut as they seem.  Here are my four:

1.  The Health and Social Care Act.  Andrew Lansley's complex legislation looks like taking the rap, and there is no doubt that the original draft legislation added complications to the structure of the NHS, and that - as originally set out - it would have led to considerably more outsourcing.  But people seem to have such short memories, forgetting that the Lib Dems excised most of the privatisation from the bill.  Still, there is no doubt that it has added to recent costs, if only because it was another re-organisation that has had to bed down.

2.  The legacy of PFI.  Why has the Labour Party forgotten this one? Labour didn't invent PFI - that was the John Major government - but they turbo-charged the idea.  We now have what Lansley called a "£60bn postdated PFI cheque" to deal with, because the deals locked costs in for three decades in their efforts to take the costs of new hospitals off the balance sheet.

3.  Outsourcing culture.  The trouble with outsourcing in practice is that, because it is linked to narrow targets which have to be delivered, there is a tendency to contract the big operators who are most adept at producing the numbers - achieved largely by narrowing what they deliver and, by doing so, spreading costs elsewhere in the system.

4.  The current quadrilateral management structure of the NHS in England.  This is partly the legacy of the Health and Social Care Act, but it is also based on a New Labour fantasy - that somehow it would be possible to create an administrative system that would just run itself, without the need for value judgements.  It was their utilitarian dream of a public service system like a big humming machine, tended by men in white coats.

Let's just emphasise the PFI problem.  North Cumbria University Hospital, ex-Cumberland Infirmary, was the first hospital to be built using the PFI.  It cost £67m to build and was opened by Tony Blair in 2000.  The investment came from Interserve, a multinational support services and construction company based in London.

To manage the facilities, Interserve set up a joint venture with engineering giant AMEC, called Health Management Carlisle (HMC), based in Berkshire. Early in 2014, the hospital board announced that it had ‘lost confidence’ in HMC, when it was told the company would be increasing its annual charges by £1m (from £8m) a year.  This followed a report on the facilities management contract that uncovered ‘major issues’ with the maintenance of operating theatres, water systems and gas pipelines at the hospital.

The contract for facilities management was agreed as part of the original PFI deal and both last for 30 years. Even without confidence in the provider, the hospital is contractually obliged to keep paying.

The Trust is also paying £18 million a year for the original investment by Interserve, up from £11 million at the start of the contract. The total paid back on the PFI contract is estimated to be £587 million by the final instalment in 2030.

And for some reason, Labour claims to be preventing the privatisation of the NHS.  How did they do that, and how do they get away with it now?

Add those four points up and you find that the coalition is certainly at fault, but mainly because they failed to diagnose the mistakes which the Blair and Brown governments had made in public services, primarily the way that targets wasted money, blunted what services could achieve and locked in inefficiencies.

The tragedy of the coalition's achievements in public services is that they half understood that there was a problem, but never grasped the whole picture - then they went ahead and locked the problems in with a more extreme version of the same idea, which we know as "payment by results".

Now I ask you: why are political and journalistic memories so short?  Why is Labour allowed to portray itself as the saviour of the NHS?

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