The corporate capture of the National Health Service means that it can only shrink, not grow.
By George Monbiot. Published in the Guardian, some time in 1998
Listening to Gordon Brown on Tuesday, you could honestly believe that the National Health Service was about to get better, rather than worse. The extra £21 billion Mr Brown has found for the service would be, he told us, “the biggest ever investment in its future, giving the NHS for the first time for decades the long term resources it needs.”
But how did our ingenious Chancellor manage to conjure up so much money? Partly by means of a clever financial device known as the private finance initiative, or PFI. Instead of using its own money to upgrade the infrastructure, the government encourages private companies to build new roads, prisons, schools and hospitals. The companies then either rent the new facilities to public bodies, or run them and charge for their services. Less money for capital projects means more money for spectacular gifts like those announced by Mr Brown on Tuesday.
No sector is as committed to the private finance initiative as health. Fourteen schemes to build hospitals with private money have already been approved, many more are planned. The Treasury boasts that it has managed, by these means, to release far more money for critical NHS services.
This is, in truth, utter nonsense. As Dr Jean Shaoul, an economist at Manchester University, has demonstrated, the PFI is leading not, as promised, to an expansion of the NHS’s capacity, but to a terrifying retraction.
This month, Lothian Health Board is expected to sign a deal with a private consortium, to rebuild Edinburgh’s Royal Infirmary. The deal, the board claims, will lead to “a huge improvement in the quality of facilities”. Nothing could be further from the truth.
Unlike the government, private investors in the nation’s infrastructure expect to make a fat profit from the facilities they build. Unlike the government, they have to borrow at commercial rates, which means that their schemes are more expensive. Unlike the government, they have the best corporate lawyers money can buy.
To pay the enormous annual revenues the private consortium demands, Lothian Health Board will have to find £25 million a year. This means, according to its own business case, losing nearly 1000 doctors, nurses and clerical staff, or 20 per cent of its workforce. Lothian has already been releasing money to fund the deal: by 2003, there will be 45 per cent fewer beds in its acute hospitals than there were in 1989. Even in the summer, its hospitals can’t cope.
Similar crises of provision threaten all the health authorities and trusts experimenting with the private finance initiative. The Department of Health’s consultants estimate that for every £200 million spent on PFI developments, 1000 staff will have to go. Building the first 14 PFI hospitals will mean losing 3,700 acute beds, 700 more than Frank Dobson claims to have provided in order to reduce the waiting lists. Even these cuts will not suffice to feed the insatiable demands of the consortia: health authorities are already raiding their equipment, maintenance and community service budgets and handing the money to bankers and builders. Modern hospitals, like the Walsgrave in Coventry are being demolished and smaller ones built in their place, so that the consortia can sell the extra land.
Once the NHS has let the commercial cuckoos into its nest, it will never be able to evict them. Payments to the private companies, once agreed, are non-negotiable: however desperate the needs of patients are, the consortium’s demands will come first, even if its services are no longer required. Much of the extra money Gordon Brown promised on Tuesday will travel straight into the hands of the bankers controlling the new projects.
So, given that the private finance initiative represents appalling value for money, cuts in public services and intractable future commitments, why did Gordon Brown announce on Tuesday not a contraction, but an expansion of the scheme? Well, one sector of society is, understandably, delighted with the PFI: big business.
This, for Gordon Brown, is the constituency that counts. If he delivers what financiers and construction companies want, their colleagues in the CBI will treat him kindly in the media they control. By delivering our most precious national assets into the jaws of our most rapacious predators, he will preserve his reputation as a safe pair of hands, a prudent and reliable Chancellor. For all his sonorous assurance and powerful posture, Gordon Brown is no more than a pliant middle manager, an obliging agent of the businessmen who have come to run this government.