Britain: Privatising the health service

TONY BLAIR tries to justify New Labour’s plans for foundation hospitals by harking back to the foundation of the National Health Service (NHS) in 1948, when working class people finally won access to health care, free at the point of use.

The establishment of the NHS was a tremendous victory for the working class but the system wasn’t perfect then and certainly needs reform now. But not the type of ’reform’ he has in mind – the UK already spends a smaller proportion of GDP on health than almost all other advanced countries.

So what are foundation hospitals?

The original plans were for hospitals scoring highly in the government’s league tables – those with three stars – to be eligible to apply for foundation hospital status, with effect from 2004. 32 have applied so far. But Tony Blair and Alan Milburn have already had to pledge £200 million to help all hospitals achieve foundation status within five years, to try and counter the "two-tier health service" accusation.

Foundation hospitals will be able to set their own clinical and financial priorities, raise money on the open market and ultimately set separate pay and conditions for staff. They will be able to develop as centres of excellence for certain diseases and conditions and sell their knowledge and expertise abroad and to other hospitals.

There will be nothing to stop private hospitals applying to become foundation hospitals or foundation hospitals ’outsourcing’ some or all of their services to the private sector.

All foundation hospitals will implement the Agenda for Change proposals, which do nothing to address the problems of low pay in the health service (see below). Some low-paid workers will actually be worse off, whilst senior managers can be paid more.

The cheer leaders for these plans make much of the idea that foundation hospitals will be more accountable to the local community.

"This initiative is not about privatisation versus nationalisation, it’s about localisation. I don’t think it is as controversial as some people believe" says Mark Britnell, chief executive of University Hospital Birmingham.

The hospitals will be run by a board of governors, unlikely to be any more democratic or representative of local communities than the current trust boards. But they will have to work through a management board, which will be responsible for budgets and pay, amongst other things. Each hospital will set out its own constitution – nowhere is it made clear how these arrangements can be more democratic or responsive to local needs.

The hospitals will be able to borrow money on the local market, not subject to treasury approval. But if a foundation hospital goes bankrupt it will be baled out with public money, like the railway companies.

Healthy future?

Socialist Party member Ciaran Mulholland has recently produced a report on the proposed reorganisation of hospitals in Northern Ireland. In his report A Healthy Future? (see below) he sums up what is clearly behind hospital centralisation and privatisation across the NHS and across Europe.

The ideology driving these measure is that demand for health services is infinite and can never be met. That resources are limited and will never be enough, so ’change’ is inevitable. ’Change’ means increased centralisation (with the closure of smaller hospitals) as larger hospitals are both safer and more cost effective. And ’change’ means increased privatisation as the private sector is considered more efficient and cost effective, and can inject resources which are not available to the public sector.

Essentially the foundation hospitals proposals are a desperate attempt to show quick returns for the increased spending which has taken place in the health service. They attempt to conceal the fact that this spending is woefully inadequate to repair the damage from years of neglect by talk of "democratisation" and "accountability".

So the only way forward is more privatisation, more cuts and now this scheme which will restrict the best quality hospital provision to those living in the right areas and those able to pay.

As an article in the British Medical Journal said in 1999: "The planning process has effectively been reversed with services being designed to fit predetermined reductions in capacity. The high costs of the PFI entail major reduction in service provision, acute bed capacity and clinical staffing. Justifying these reductions, it would seem, has become the main planning task."

A socialist programme for the NHS

  • No to foundation hospitals, for a properly funded NHS so good quality health care is available to everybody.
  • No more privatisation, take all the privatised services, private hospitals and beds into public ownership.
  • A minimum wage of £8 per hour and a 35-hour week for all health service workers.
  • Abandon PFI, no more profiteering by the building companies and the banks. Fund new hospital building programmes through central government, using direct labour.
  • Genuine democratic control of the NHS, involving the trade unions, patients, carers and elected representatives. Senior managers should be accountable to elected bodies.
  • Nationalise the pharmaceutical industry, the pharmacy chains and the medical supply industry and integrate them into a democratically controlled NHS.
  • Massively increase spending on health care as part of a socialist planned economy. The wealth already exists in society to provide good quality health care for all. Take the top 150 companies into public ownership under democratic workers’ control and management.

A Healthy Future? By Ciaran Mulholland.
Available from Socialist Party, 36 Victoria Square, Belfast, BT1 4DQ, tel: 02890 232962 or


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May 2003