Just three years into a ten year contract the private company Circle has pulled out of its contract to run Hinchingbrooke National Health Service (NHS) hospital in Cambridgeshire.
The contract was put out to tender by the previous Labour government after the hospital ran into trouble with 'debts' of £40 million - the result of underfunding and a costly PFI privatisation building deal. Circle was awarded the contract by the current government and took over its running in early 2012.
Hinchingbrooke is the first acute hospital to be run entirely by a private company and Circle pulling out is a damning indictment of the process of NHS privatisation.
In its attempts to balance the books, the company's policies have led to the hospital receiving an "inadequate" rating from the Care Quality Commission (CQC) in a report last week. The CQC particularly highlighted problems of understaffed A&E and medical departments putting patient safety at risk.
Circle said "it was difficult to see how any private operation looking for a commercial return could run an acute services hospital under the present model."
In other words they can't make sufficient profit out of running acute healthcare services. They argue that cuts of 10% plus to their funding, inadequate social care and increased demand in A&E make it impossible for them to continue.
Of course, these problems are putting all NHS services nationally under huge pressure to the point of breaking. However, publicly run health care services don't have the option of simply throwing in the towel.
The fact that a private company can just walk away when the going gets tough, shows how privatisation, expanded by Labour governments, has introduced huge instability into the NHS. Circle should be punished for their failure and made to repay all the public money they received.
The recent Health and Social Care Act (England) introduced by the Tory-Lib Dem government, and the privatisation process, has resulted in private companies gaining short term contracts to run health services. Even then they can pull out if they determine these to be unprofitable.
The system of payments for acute hospital services and the new commissioning bodies run by GPs, alongside the government's insistence on £20 billion 'efficiency savings' in the NHS, pits doctor against doctor in a battle for ever decreasing sources of funding.
Circle cites a dispute over funding with local GPs as one of the difficulties they faced. But this is what the marketisation of the NHS has produced!
Neither of the main parties has an answer to the problems either of Hinchingbrooke or the crisis faced in the NHS.
Labour blaming the Tories for appointing the 'wrong private company' at Hinchingbrooke ignores the underlying problem of any private company running healthcare to make money.
It's time for the NHS to be properly funded. The millions of pounds of debts owed to private companies for Private Finance Initiative (PFI) deals should be cancelled and services brought back into public ownership, where patient care can finally come before profits.
Healthcare needs to be planned in a democratic and accountable way with the genuine involvement of staff and patients in deciding what is needed and how services should be run.
Massive investment is needed to train and increase staffing levels across all areas of the NHS to meet needs.
This has to be fully integrated with social care and community based services which also need adequate funding not more of the cuts which are planned.
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