£30bn NHS funding shortfall

Stop NHS cuts!


Over 1,000 people marched in Leeds on Saturday 28 April in defence of the NHS, photo Iain Dalton

Over 1,000 people marched in Leeds on Saturday 28 April in defence of the NHS, photo Iain Dalton   (Click to enlarge: opens in new window)

Like a tiny plaster over a gaping wound, promises to improve the NHS made by the establishment parties are worthless. Even the former boss of the NHS, Sir David Nicholson, says that these party election pledges will not fill its “financial hole”.

There will be a £30 billion predicted annual shortfall by 2020 – enough money to fund 100 hospitals. Some of this gap is meant to be reduced by £22 billion a year “efficiency savings” – in plain language, cuts.

Even Nicholson says these would be a “big ask” that “no healthcare system in the world has delivered on this scale”. They could not be achieved without cutting staff, hitting patient care, longer waits and ultimately more deaths.

The Tories and Lib Dems have promised an extra £8 billion, but not until 2020. Labour says £2.5 billion. Yet already three quarters of hospitals can’t balance the books.

The NHS must be properly funded. Privatisation, which is bleeding the NHS of billions, must be scrapped.

The Trade Unionist and Socialist Coalition (TUSC) is standing in these elections on a programme to defend the NHS. None of the others will!

Stop the dismantling of our NHS

Lancashire GP and Socialist Party member Jackie Grunsell answers questions about the state of the NHS.

What has happened to the NHS under the Tory and Lib Dem government?

Five years ago the Con-Dems formed a government with a pledge not to ‘meddle’ with or cut the NHS. With another general election imminent this pledge can only be described as a barefaced lie.

This government seemed intent on dismantling our national health service, to be replaced with a hotchpotch of uncoordinated, competing, often poorly funded, understaffed services run in the interests of private profit rather than patient care.

In one fell swoop, the 2012 Health and Social Care Act removed the obligation on the health secretary to provide health services across the UK.

This saw the end to the idea of a universal health care system in England. The top-down reorganisations have diverted an estimated £3 billion away from patient care, not to mention their time cost.

One of the central claims of the government was giving more power to GPs to decide local patients’ priorities by making Clinical Commissioning Groups (CCGs) responsible for selecting what services will or won’t be provided for their area.

In reality, most GPs still have little or no involvement in the process. They simply don’t have the time due to ever burgeoning workloads.

Of those GPs who sit on commissioning groups, 40% have been identified as having a ‘conflict of interest’. In other words, as well as being responsible for commissioning services, they are also involved in provider organisations that could stand to make money if the CCG commissioned them! CCGs also have ever decreasing budgets as the government demands ‘efficiency savings’ of £22 billion across the NHS.

The Health and Social Care Act forces CCGs to put contracts for services out to tender to ‘any qualified provider’. This has allowed more and more contracts to be won by private, ‘for profit’ companies.

About a third of contracts awarded between April 2013 and August 2014 went to the private sector. It also makes services increasingly unstable and unsustainable.

Contracts are awarded for limited time periods – 2-3 years – then come back up for tender again. The process costs valuable time and money – something most public sector organisations don’t have the luxury of.

The whole system is weighted in favour of the private sector with its expertise in developing bids and short termism. And when things don’t work out as planned, or turn out to be unprofitable, the private sector can simply bail out.

The example of Circle dropping out of running Hinchingbrooke hospital, Cambridgeshire, is just one high-profile case of many where private companies have abandoned their contracts early.

Is the government protecting the NHS from cuts?

No, massive cuts in funding are taking place. Closures of accident and emergency departments (A&Es) and maternity units have continued apace. Waiting lists for operations are growing, as are the numbers of patients on A&E trolleys and people waiting weeks for a GP appointment.

Flu epidemics, elderly bed blockers and inappropriately demanding patients have all been blamed. But what do you expect if you close hundreds of A&Es, ambulance stations and hospital beds?

Lack of community nurses and inadequate social care means there is no way to safely discharge those who are recovering and need rehabilitation. They either languish in hospital beds or get sent home without the care they need, only to be readmitted via A&E a few days later.

Huge changes to GP contracts over the Con-Dem years have seen a funding crisis like no other. GP shortages and a lack of money mean the trickle of practices closing is set to become a flood. The Royal College of General Practitioners (RCGP) estimates over 500 practices are threatened with closure.

Far from being ‘in control’, GPs feeling demoralised and powerless, are retiring early or emigrating, and are not being replaced as fewer new doctors choose the profession.

The Health and Social Care Act also lifted the cap on the share of funding NHS hospitals could earn from taking private patients to 49%. Nationally, NHS hospitals currently get 2% of their income from private patients. But several specialist centres, in particular in London, have dramatically increased their private income share by over 30% in some cases. This is disgraceful when waiting lists for NHS patients are expanding daily.

The ultimate lie of the Con-Dems was that these reforms would improve patient choice. Instead, services are fragmented, not all are available in all areas and private health providers pick and choose which patients they will see and treat.

Competition has put constraints on organisations cooperating and means any accountability to the public has gone out the window. ‘Commercial confidentiality’ gives companies the right to keep information about contracts and tendering processes hidden as it may be ‘commercially sensitive’.

What parts of the Health and Social Care Act are still yet to be implemented?

A majority of NHS-run contracts are due for renewal. Over the next few years more will go out to tender and run the risk of being privatised.

As funding continues to be squeezed, it is possible that hospitals will raise more from private, rather than NHS, patients. More privatisation is on its way.

Why are the changes being made? Will they improve the NHS?

No! The Tories have had a long term goal of privatisation and removing government responsibility for comprehensive health care. They have accelerated the process of handing over the NHS to their rich friends, lobbyists and party donors.

But all the main parties have politicians responsible for health care who also have financial interests in private health organisations.

The ultimate aim seems to be a US-style, private insurance based, system. There is a deliberate undermining of general practice, the cornerstone of the NHS and one of the key reasons for it being very efficient and cost effective in the past.

As patients increasingly struggle to access NHS care, private insurers have the opportunity to step in, offering quicker and seemingly better service – but only for those who can afford it.

Do previous governments carry any responsibility for privatisation?

Yes, absolutely! Since the NHS was set up, every government has gradually undermined the principle of universal comprehensive care free at the point of use.

Things changed more decisively in the 1980s when Margaret Thatcher’s Tory government introduced the ‘purchaser provider split’ and an internal market in the NHS. Marketisation, privatisation and chronic underfunding have stepped up since.

The 1997-2010 New Labour governments ensured all new hospitals were built under Private Finance Initiative deals (PFI). These have proved hugely expensive and drain billions of NHS money into the pockets of private shareholders on a yearly basis.

Under New Labour, ancillary services in hospitals were privatised. Steadily, more clinical services began to go down that road.

More than any government before it, Labour accelerated the pace at which parts of the NHS were sold off and introduced competition with the private sector, supposedly as a way of reducing waiting lists, through independent sector treatment centres, walk-in centres etc.

Labour first demanded £20 billion NHS cuts by 2015 which the Con-Dems have pursued since. Labour introduced payments by results, paying hospitals a set fee for a particular service. If it ended up costing more to provide than the tariff allowed, the hospital ended up out of pocket. This, combined with PFI, has left hospital trusts up and down the country in debt and therefore finding ‘savings’ i.e. making cuts.

Even if the Health and Social Care Act hadn’t been passed through parliament, we would still be seeing the ongoing privatisation of health care.

Labour showed it represents the same rich interests as the Tories and Lib Dems are doing now. While Labour promises to repeal the Health and Social Care Act, it will not abolish privatisation and will continue to put services out for tender.

A socialist NHS programme

No cuts. Axe the Act

  • Abolish the Health and Social Care Act. No more cuts, closures or privatisation. Not one more ward closure or job loss in the NHS. For a massive programme of investment to improve and expand services.

End big business profiteering from the NHS

  • Scrap PFI. There are 149 PFI hospitals in Britain, valued at £12.27 billion. A recent University of Edinburgh report shows the NHS will pay £70.5 billion for them, wasting nearly £60 billion that is going from the public to the private sector.
  • Costs for building a private hospital are estimated to be up to 4% higher because the contractors have to pay higher interest rates compared to public funding.
  • Repaying PFI debt eats up well over £8 out of every £100 of a hospital’s budget in London, as against a 5.8% debt rate for conventionally built hospitals.
  • Half the larger PFI-financed hospitals are in financial difficulties, compared with a quarter of non-PFI hospitals. Take these buildings back into public ownership and plough the money saved back into the NHS.

End private medical practice, private hospitals and polyclinics

  • These organisations cherry pick the low risk, predictable procedures which attract guaranteed funding, diverting it away from NHS services which still do the high-risk, more costly work. They increase the risk of NHS services closing down by ‘going out of business’.
  • No to ‘Social Enterprises’! Don’t be fooled by the ‘not for profit’ claims, these are a step towards privatising community health services by taking them out the hands of the NHS.

Nationalise the pharmaceutical, medical supply industries and all private health providers

  • Compensation to shareholders should be paid only on the basis of proven need. These companies are ripping off the NHS, charging over the odds for their products.
  • Competition means money is spent duplicating products in an attempt to corner valuable markets. Research into rare conditions and less profitable areas is neglected because ‘market forces’ dictate what is done. Bring these companies under working class control and management.

Abolish foundation trusts and CCGs

  • For democratic control and accountability of health services. Plan health care on the basis of the population’s needs, with care decisions made by democratically elected representatives of health workers, the community, as well as local and national government.

For a well-funded NHS, free at the point of use

  • Including free prescriptions, eye tests, dental care and podiatry etc. Reinvest money saved by ending PFI and privatisation.
  • Nationalisation of drug and medical supply companies would allow production at a fair cost.

End NHS job losses and low pay

  • A 35-hour week without loss of pay. Give health workers an above inflation pay increase. Retain national pay bargaining. No attacks on pensions.

For united action to defend the NHS

  • Trade unions should take action supported by anti-cuts campaigns and service users. For health campaigners to link up with groups fighting other public sector cuts. Support the call for a 24-hour general strike against austerity.

For a socialist planned economy

  • End poverty, bad housing, unemployment, dangerous workplaces, pollution and inequality – the biggest killers and causes of ill health.