Cuts continue despite financial surpluses

AFTER YEARS of government claims that the NHS was massively overspending - forcing major cuts and closures - the Department of Health (DoH) has announced that the NHS will underspend by £1.8 billion this year.

Alison Hill

350 NHS trusts are forecasting a surplus by the end of this month, when the financial year finishes. A DoH spokesperson claimed that these surpluses are because of "sound and prudent financial planning" but NHS staff know it is more to do with below-inflation pay rises and job and service cuts.

Between April and December last year there were 1,892 job cuts in the NHS. Most involved freezing vacancies and cutting agency staff, but however they were achieved, they still put increased pressure on the remaining workforce.

And the drive to hit targets for everything has not resulted in better health care overall. The gap in average life expectancy between rich and poor is widening.

But privatisation is now the biggest threat to health care in Britain. The two most dangerous examples of this are the Private Finance Initiative (PFI) and independent sector treatment centres (ISTCs).

The PFI has become a huge burden because of the inflexible, expensive contracts with private companies. NHS trusts enter into these on the basis of them being "affordable". But in reality they force the trusts into making service cuts and closures in a desperate attempt to continue to pay the PFI charges.

This has been made worse by the "payment by results" method of NHS resource allocation. A recent article by Allyson Pollock and Mark Hellowell exposed how the amount NHS trusts get for providing treatment assumes an amount of 5.8% of trust income spent on buildings and equipment.

But PFI capital costs are much higher. Trusts paying into major PFI schemes in 2005/6 had capital costs of 10.2% - an income shortfall of 4.4%.

ISTCs

ISTCs are making the situation even worse. These are supposed to provide extra capacity for the NHS. But they are really an easy, government-subsidised way for private companies to gain a foothold in the health service.

The total cost of the ISTC programme will be £5 billion by 2010. And there is very poor accounting of how this is spent. There are no accurate records kept of the number of beds available or even the effectiveness of the treatment the ISTCs provide.

The private companies involved have a huge safety net from us taxpayers. Not only do they get direct subsidies, but health trusts have to pay for treatment they have contracted for with the ISTCs, whether that treatment is supplied or not.

When there was a delay in opening an ISTC run by Capio, Oxfordshire primary care trust still had to pay Capio £1 million for patients they should have treated during the delay! Even the risks of clinical negligence claims are borne by the public sector.

The NHS has been filleted and starved of funds, to serve the best bits up to private companies, for them to make super-profits. All good New Labour policy, but time they were stopped in their tracks.