NHS Outsourcing and Privatisation

John Bercow Excerpts

Wednesday 23rd May 2018 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I rise to speak as a former public health consultant and the chair of a primary care trust.

I want to start by recalling a conversation I had with Brenda Rustidge, a constituent of mine. She was born in the 1930s, and she described to me what it was like living in a pre-NHS world. Her father, who had just been demobbed after the war, was unemployed. She had a number of brothers and sisters, and they used to have to hide under the window when the doctor’s secretary called round on a Friday night to collect the money. She described the real fear and shame that she felt as a result. Of course, all that changed nearly 70 years ago when the NHS was created. Brenda and her family have thrived because of that.

This debate is not about scaremongering. It is about raising awareness of the real concerns not just of political parties but of clinicians, academics and experts across the country and across the world about what privatisation means. Okay, it is on a small scale, but in terms of spending it has increased from about 2.8% in 2006 to over 7.5%—over 10% if we include not just private providers but all non-NHS providers.

I want to reflect on a point made by my hon. Friend the Member for Stockton South (Dr Williams): we have within the NHS a system that provides universal, comprehensive and free healthcare. That is something we should be very, very proud of. We are seeing that being eroded. For example, private providers of knee and hip replacements exclude certain people. They do not want the complex cases because they are too time-consuming and costly. I take issue with the point that the right hon. Member for Mid Sussex (Sir Nicholas Soames) made, because it does entirely matter who provides the care that we get. There is a slow and steady erosion of the NHS as the sole provider.

In 2014, I conducted an inquiry into the international evidence on the effect of privatisation, marketisation and competition across different health systems. We commissioned a review of reviews, which is the strongest type of evidence, on the impact on health services, particularly looking at equity and quality. It was submitted to peer reviews and accepted in peer-reviewed journals subsequently, and it showed clearly and conclusively that health equity worsens in terms of not only access to healthcare but health outcomes.

It also revealed that there is no compelling evidence that competition, privatisation or marketisation improves healthcare quality. In fact, there is some evidence that it actually impedes quality, increasing hospitalisation rates and mortality rates. Of course, that was the key argument and the sole reason that the Government put forward for the Health and Social Care Act 2012.

The report found a whole host of other issues. I am sure that Members will go to my website to read about that. The transactional cost was one example—

[Mr Speaker]

Order.

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[Several hon. Members rose—]

[Mr Speaker]

I am very sorry, but in order to accommodate the remaining speakers—I thought that there were four, but there seem to be five—I must impose a three-minute limit, as I advised the Whip. I want to get everyone in.

--- Later in debate ---

[Alex Cunningham (Stockton North) (Lab)]

For now, NHS trusts remain the sole shareholder in their wholly owned subsidiary companies—yes, just for now—but those subsidiary companies will be easier to sell in future. The trusts have established those subsidiaries with long contracts under the misguided impression that such contracts protect the trust and the employees. What the trusts do not acknowledge is that the current Government, or a future Government, could order them to sell off a subsidiary company, contracts and all, and, if necessary, could change the law to make it happen.

We have already seen how these new subsidiary companies make their margins off the backs of now former NHS staff who face the prospect of less favourable contracts with no access to the NHS pension scheme, yet some trust executives claim they are transferring employees to protect them. That is absolute rubbish. We all know that when staff are transferred by TUPE, the receiving employer can have a reorganisation. It can create new roles and axe old ones, and it can require people to apply again for what looks like their old job with some subtle changes, with the terms and conditions varied, putting an end to the protections they once enjoyed. This creates the two-tier workforce many others have spoken about today. It means that some people are being treated better than others, with more rights, better pay and better working conditions.

I have even heard that some of these executives believe the changes could be in the best interest of the workforce. None of these executives faces the prospect of being reorganised out of their job or out of their final salary pension scheme with a 15% employer contribution. The executives will continue to get that pension, yet the people they have shifted into new organisations will get a 3% employer contribution to their pension.

In a few years’ time, it will be interesting to see just how many of the original staff are still in these organisations and how many of them are on the same terms and conditions enjoyed by NHS staff who are still employed directly.

I am proud that, just a week ago, one of the teams at the North Tees and Hartlepool NHS Foundation Trust in my Stockton North constituency was shortlisted for the NHS 70th awards, but a few months ago even this trust succumbed to temptation and set up one of these wholly owned subsidiary companies, despite the accounts for an existing subsidiary company showing it needed a bail-out from the trust to survive.

Wholly owned subsidiary companies are not working. They are a mechanism to rid employees of their NHS pension and of collective bargaining. The companies are damaging to employees, and they are damaging to the service in the longer run. What they are really doing is severely damaging the morale of our staff.

[Mr Speaker]

For a maximum of two minutes, I call Hugh Gaffney.

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

I thank the NHS’s public service workers for all that they do for us. They have stood against cuts under Tory austerity and a decade of SNP cuts in Scotland. Scotland’s NHS workers are underpaid, undervalued and under-resourced while millions of pounds are spent on agency staff. As Richard Leonard, the Scottish Labour leader, said recently, private companies are

“sucking money out of the NHS”,

but Labour in Scotland is ready to stand up to Tory austerity and SNP cuts.

[Mr Speaker]

Thank you very much indeed.