One misguided aspect of Government policy is privatisation

The Government naively believes privatisation of services in hospitals and contracting out investment in hospitals and their long-term operation through the Private Finance Initiative (PFI) will solve resource and management problems. This approach is partly based on dogma that private management can deliver results at low costs (despite Railtrack - Guardian 21 December 2000), and partly on window-dressing the Government accounts to pretend that investment in the provision of public services, ultimately financed through taxation, is not public expenditure. In reality:

• any savings have been at the cost of reducing wages for the lowest-paid employees,
• capital costs under-written through annual contract fees have escalated and led to serious service cuts elsewhere (see Kidderminster Hospital),
• PFI is producing grandiose schemes
  • whose implementation causes ill feeling and disruption (see Dudley - Guardian 23 November 2000) and
  • which may not be relevant in 20 years' time when the contracts are still in place Guardian 7 September 2000.

See sources  and Construction projects for later links.

The private sector can be effective when they are selling goods and services direct to customers so that they must satisfy customers to survive. Where companies provide public services under contract, they are more likely to succeed if responsibilities are clear and the requirements and penalties for failure are precisely defined. Even in these situations, contract specification and monitoring creates a new bureaucracy that is unnecessary in direct public service provision. Private contracting of delivery of health services is inappropriate for the following reasons.

• Advances in medical technology may change the nature of services needed in unpredictable ways.
• It is likely that private sector partners would only incur any necessary additional costs if they are under-written by the taxpayer (as  happened until recently with Railtrack - where the taxpayer picked up the costs of the company's past failures), but the private sector will keep any savings due to simpler and cheaper technology.
• Hospitals hold a near monopoly in high-technology medical services at local level. Many patients are unable to go elsewhere. So any local variations resulting either from commercial decisions or from management failings should be intolerable.
• Long term contracts are likely to frustrate corrective action by the local community unless there is blatant default.

Privatisation also leaves little room for local democracy and adds to public alienation from the Health Service.

A pernicious recent development has bee the contracting of voluntary organisations to provide NHS services.  This can lead to the voluntary organisations being implicated in decisions with which they disagree (such as age limits for treatment), being caught in the NHS performance management treadmill and ceasing to be effective watchdogs.

See Keep Our NHS Public for policy briefings on the implications of private sector involvement.

There is a long-standing private sector in medicine.  There was a website PRIVATE HOSPITALS IN BRITAIN A Critical Examination of the Private Healthcare System with a comprehensive critique of low standards and lack of accountability, but this is no longer on the Internet.  Private contractors to the NHS, including Independent Sector Treatment Centres, also have low standards and lack of accountability.

The Government spreads privatisation into more and more areas before the problems of earlier privatisations have been sorted out.  So, while oxygen deliveries are still unsafe, in October 2006 privatisation of blood testing is proposed.