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From The Socialist newspaper, 29 September 2005

Labour's great NHS sell-off

Why we need a national campaign now to defend the health service

SPENDING ON the health service has doubled since Labour was elected in 1997. From 6.8% of GDP in 1997, spending has risen to 9.2% of GDP, higher than the latest average in the European Union.

Alison Hill

But why then are more than 50 trusts in England facing major deficits - and the prospect of devastating cuts? Why are important community hospitals being threatened with closure? And why is this happening now?

New Labour has never done anything about the deficits the Tories created by strangling public spending in general and spending on the NHS in particular. In fact, chancellor Gordon Brown is proud of sticking to his pledge to maintain Tory cash limits for three years after the 1997 election.

During this time hospitals and health authorities were forced to continue to use capital funds and postpone debt repayment to keep going. In fact, there has been a campaign of asset-stripping by some trusts, where hospital land is sold off for housing and other developments.

And when the government allocated extra spending, it came with a raft of targets and other measures which absorbed much of this extra funding. Some of it had to be used to raise wages for some health workers but the scandal of low pay still haunts the NHS.

After dumping the Tories' internal market, Labour reintroduced it in England in 2002 in a more vicious form. They are now opening up the NHS to plunder by the private sector in a much more blatant way than the Tories ever did.

Once the general election was out of the way, health secretary Patricia Hewitt could let the cat out of the bag by warning: "If services aren't attracting patients because they're not good enough then of course everything possible has got to be done to improve those services so they do attract patients. If they can't do that then yes, they may have to close."

So the next couple of years will see a headlong struggle by the government to force through its most unpopular plans for closure and privatisation in the NHS - hoping the dust will have settled before the next election. That is why there must be a vigorous and united campaign by the health service trade unions and community campaigners to stop these plans before they destroy what cannot be easily brought back.

The internal market

Labour's version of the Tories' disastrous 'internal market' hinges on the principle that hospitals are paid according to how busy they are. The attractive-sounding proposition that 'money follows the patients' actually means that hospitals will be paid according to a national 'tariff' based on average hospital costs.

But what if your hospital is not average - if it's in an area where many people have poor health or it's suffered from years of under-investment already?

The tariff itself is far from perfect. As the finance director of Homerton University Hospital in east London told The Economist: "The tariff is still very unstable."

Some trusts have already run up deficits under the new system. Bradford Teaching Hospitals is running an annual deficit of 11 million on a turnover of 210 million. So the government has been forced to postpone its full implementation. It will only apply to elective (non-emergency) treatment in 2005-2006.

Foundation hospitals - those which are given more financial autonomy - are allowed to keep surpluses they build up. By March 2005, 25 out of the 173 acute-care trusts had gained foundation status. But by building up surpluses, foundation hospitals will be able to attract staff more easily and thus extra patients, through the government's other buzz word - 'patient choice'. All the ingredients of a two-tier hospital system are there.


Shortly after the last general election, health secretary Patricia Hewitt announced that the use of the private sector to carry out NHS operations will double in the next five years. She wants between 10% and 15% of operations to be carried out by the private sector - rising from around 5% now.

This is being done in the name of reducing waiting lists and patient choice. But the British Medical Association has already warned that this could destabilise the NHS. The private sector will only be interested in taking on the most straightforward cases.

The professor of clinical biochemistry at the University of Surrey put it more bluntly: "This is really the destruction of the NHS. Once you start farming it off into private enterprises the NHS as we understood it will gradually disintegrate."

The full implications of this policy have begun to be revealed. Confidential documents have been leaked which spell out Labour's sell-off plans. Private sector bidders are being invited to bid for contracts worth 3 billion to treat NHS patients.

The contracts being offered include:

Running all surgical facilities at the new NHS treatment centre in Birmingham - up to 9,500 operations a year.

Turning Ravenscourt Park hospital in west London into a "surgical hub" for a network of diagnostic and treatment centres. Ravenscourt Park was bought to be run by Charing Cross hospital as a specialist centre for joint replacements. Campaigners fighting for the future of Charing Cross have identified this purchase as a factor leading to Charing Cross's financial crisis.

Leasing off part of the new New Forest Lymington hospital, which is a PFI scheme anyway. This will be used to carry out 5,000 operations a year.

These documents reveal another government 'U' turn. There were rules to prevent the poaching of NHS staff by private companies. These have now been shelved, except where there are staff shortages.

The chair of the BMA consultants committee told The Guardian: "...we are moving quickly towards a position where a lot of NHS staff will have to work for private firms or lose their jobs. This is being done without any real debate."

Primary Care Trusts

The other potentially devastating change which the government is planning is the reorganisation of the "purchasers" in the internal market - the primary care trusts (PCTs). These 303 bodies commission care worth about 54 billion a year for NHS patients in England.

The plans are to merge many of the PCTs down to about 150 and strip them of their role in providing services themselves. The private sector will then be invited to provide services like district nursing, health visiting, cancer screening and much else.

The changes are being pushed through on a very short timetable, which even NHS trust chief executives describe as "rushed." Their other descriptions of the plans include: "crass, ill-informed, destructive, knee-jerk and irresponsible."

Already this has threatened local community hospitals (see articles on Wiltshire and Hampshire.) And all seven district council leaders in Devon have published a joint letter opposing the plans.

A socialist programme for the NHS

Wales - different jargon, same privatisation

ONE IN ten people living in Wales are on an NHS waiting list as Welsh hospitals are clogged up, unable to deal with the demand for healthcare.

Dave Reid, Cardiff

A doctor in a South Wales accident and emergency department emailed a plea for help to a member of the Welsh Assembly: "Our emergency departments are indeed 'third world', with patients waiting for more than 90 hours on hard trolleys for a bed... staff can no longer deal with circumstances where they have dying children in their arms and nowhere to put them... Please help us not have to refer another 'corridor' death to the coroner."

In Wales the Labour government in the National Assembly claims to take a different route to New Labour in England. There are no foundation hospitals or primary care trusts but privatisation of NHS services continue.

Now all new NHS services are put out to tender to allow private companies to take over. The Cardiff out of hours service was recently tendered out to a private software company and sold on to an American healthcare corporation. The result has been chaos, as people wait days for a service that should be immediate.

And decades of under-funding and hospital closures have meant that the NHS in Wales just cannot cope. Instead of expanding hospital capacity, building new hospitals, taking on more doctors and nurses, developing new facilities, Labour in Wales is sending patients to private hospitals to clear the politically embarrassing waiting lists and going for the cheap option of trying to treat people outside of hospital.

These "new models of care" are supported by all the parties in the Assembly but are increasingly understood to be the cheap way to avoid building new hospitals. Dave Bartlett, secretary of CRISIS, the campaign to re-open Cardiff Royal Infirmary (CRI), dubbed them the "cheap and nasty model".

However people all over Wales are fighting back for their health service. In the summer CRISIS took a step forward when its years of fighting won 5 million funding for the CRI site. And last week 1,000 people marched through the small North Wales town of Blaenau Ffestiniog to stop the closure of their hospital.

Fighting the cuts in Wiltshire

IN WEST Wiltshire the primary care trust (PCT) has announced the closure of hospitals in Bradford-on-Avon and Westbury.

Roger Davey, senior UNISON steward, Swindon and Wiltshire Health branch, personal capacity

Also three hospitals in Trowbridge, Warminster and Melksham are likely to be closed or downgraded in 2006. The PCT has told the unions that 130-plus jobs could be go.

Yet there's a real shortage of hospital beds. All the hospitals threatened with closure have bed occupancy rates of above 90%, while the nearest major hospital in Bath is regularly on "red alert" - full to the brim.

If these closures are implemented, patients will be trapped at home, reliant on already overstretched community nurses, friends and relatives. Many others will be inappropriately placed in nursing homes, where they will face means testing and receive lower quality care. Those fortunate enough to obtain a hospital bed could end up being discharged early due to the shortage of beds.

UNISON has begun organising members across the five hospitals and co-ordinating action to defend jobs and services. A demonstration held outside Bradford-on-Avon hospital attracted over 400, while 600 staff and members of the public marched against the cuts in Westbury, one of the largest protests ever in that small town. Hospital workers have drawn confidence from this and are determined to carry on the struggle to defend services. Industrial action has not been ruled out.

We are regularly asked why beds are now closing at such a rate. It's because the government has told all PCTs that they must break even by April, despite massive historical debts. The situation is made worse by a rapidly growing percentage of NHS money going straight into the pockets of wealthy shareholders.

Small community hospitals cannot be made easily profitable in this cut-throat market. There's not much dosh to be made out of the elderly, long-term sick patients we care for.

New Labour is happy to grease the palms of the private sector as it breaks up our health service, yet UNISON still passes on members' dues to these privatisers. My members are asking why and are demanding answers.

As the fight goes on to protect our hospitals, more of them will realise that it's time to break the trade union link with New Labour and put our energies into building a new workers' party that will defend and expand the NHS.

Crisis in Hampshire

THE NHS budget deficit in the Hampshire/Isle of Wight area is over 60 million, but the figure grows all the time in the press.

Nick Chaffey, Southampton

Hospitals had previously set deficit budgets but this has now been stopped. Senior civil servants have written to hospitals trusts demanding they set balanced budgets and health secretary Patricia Hewitt has written to worst offenders with the same message. What was already a crisis has now been enormously multiplied with big cuts being announced everywhere.

This has provoked an uproar in the areas such as Emsworth, Andover and the New Forest. Big meetings have been held and 2,000 rallied in Lyndhurst to protest at the cuts in the New Forest.

More worrying is, on top of these cuts, we have cuts in beds in Southampton General hospital and hundreds of redundancies as well as a decision to close Haslar hospital in Gosport, just along the coast!

With a crisis at the Southampton General already, if these cuts go ahead the pressure on the remaining regional NHS centres will be huge. Trust spokespersons are trying to allay fears by promoting "care in the community" as an alternative but we know from speaking to staff that these services have been cut to the bone and are at full capacity.

Trusts then say that private providers can take up the slack. Staff suspect there are hundreds of NHS managers lining themselves up for a future in picking up this slack.

Public health not private profit

IN APRIL, it was leaked to the press that Charing Cross hospital in west London might be closed. Hospital management dismissed the claims and insisted that services would continue.

Elizabeth O'Hara

But plans then came to light to pump public money from the NHS into hospital services which would only be available for private patients.

The local Socialist Party branch have organised a weekly stall in Hammersmith. We have leafleted local estates and gone door-to-door seeking signatures for our petition against the cuts and the privatisation of the hospital.

We have been hugely encouraged by the number of local residents and hospital workers who have signed our petition and expressed disgust at the idea of running our health care services for profit. So far we have gathered 750 signatures which we are presenting to the management on 26 September.

The battle for the NHS is on. It is essential that we continue to build support for campaigns on the ground. Otherwise the future of our NHS will be determined in the boardrooms by those who are unelected, unaccountable and who themselves stand to benefit from privatisation.

Building a campaign to win

THERE IS an urgent need to link the existing campaigns against hospital closures and cuts together into a national campaign involving the NHS trade unions. In 1988 the Tory government was forced to water down some of their plans to attack the NHS when nurses and other health workers took strike action, which was backed by action by miners, shipbuilders and other industrial workers.

At the time, the socialist's predecessor, Militant called for a one-day general strike rather than just the demonstration and 'day of action' which was all the trade union leaders called for.

In spite of the lack of leadership, there was a 100,000-strong demonstration through London on 5 March 1988, where workers showed their support for the health workers and the NHS.

This needs to be repeated now - building a campaign for a major national demonstration which will lay the basis for a campaign of strike action to stop the privateers in their tracks.

UNISON's reaction against this government's plans consists of a propaganda campaign amongst the membership and putting an emergency resolution to Labour Party conference. But this campaign will have to include united strike action for it to be effective.

Get involved

If you would like to join with other trade unionists and campaigners fighting for the NHS, send your details to: or contact us though our website

Come to the Socialist Party's Socialism weekend, where there will be a discussion about how to develop the campaigns.

WHEN CAMPAIGNING against cuts at Southampton's hospitals, one patient told us how elderly people on her ward are sometimes forced to lie in soiled sheets as they are unable to go to the toilet unaided. Kieran Roberts reports

"I am the only one on the ward able to get out of bed" she told us, "so I am the only person there who can help sort them out".

Among the patients and workers we have spoken to, there has been widespread agreement that a campaign of mass action is necessary, led by the health trade unions, to stop the cuts.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.

In The Socialist 29 September 2005:

NHS in danger

Labour's great NHS sell-off

Waiting for Gordon

Where are the Lib Dems going?

Anger at occupation of Iraq

Fight for free education

Don't sell off Peabody homes!

Anger grows amongst industrial workers

Morrison's join the 'race to the bottom'

Witch-hunt in Amicus as merger nears

Poland: Right-wing parties win election


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