25 December 2018

Best of 2018: The enduring fantasy of secret NHS privatisation


In Christmas week CapX is republishing some of its favourite articles of the year. This piece was originally published on February 5.

At last Saturday’s “NHS in Crisis – Emergency Day of Protest” event in London, one of the speakers said:

“The Health Service is now under serious threat… The strategy of government ministers has been [to] [s]tarve the NHS of vital cash and resources then force patients to look to the growing private sector… [H]ad the government carried out a direct onslaught on the NHS the political and public outcry would have been deafening. So their policy has been more subtle, and because of that, more dangerous… [T]he NHS is in danger and over the next five years we could find ourselves drifting towards American-type [healthcare].”

The next speaker talked about: “a massive shift of resources from the NHS to private companies… [P]rivate companies are to be enabled to asset-strip the NHS… [T]he private sector [will] be allowed to pillage NHS resources.”

Actually, that’s not true. The first quotation is from a Times article published in December 1980. The second one is from another Times article, published in June 1983.

The idea that there is a secret plan to undermine, dismantle, and ultimately, privatise the NHS has been around for decades. It is hard to say when it started, but it might well be as old as the NHS itself. The details keep changing, but the basic storyline stays the same. It goes something like this:

The government of the day, or at least a powerful faction within it, hates the NHS, and wants to see it replaced with the US system. This can be for ideological reasons, or because they have been bribed by “The Corporations”. But they also know that the public reveres the NHS, so they cannot just put their plan into practice openly and straight away. They must take a more devious route. They must first sabotage the NHS’s functioning in some way, usually through deliberate underfunding, in order to weaken public support for it. At the same time, they must find a way of privatising it through the backdoor, in ways that are not immediately visible to the public. But whatever the details, the threat of privatisation is always imminent, and unless we act NOW, there will be no NHS left in a few years’ time.

NHS Privatisation Paranoia ebbs and flows, but it never completely goes away. It is usually more intense under a Tory government and/or during years of a funding squeeze, but this is by no means necessary. Under the last Labour government, the NHS budget grew, on average, by more than 5 per cent per year in real terms. Yet in 2004, Allyson Pollock, one of the gurus of NHS Privatisation Paranoia, nonetheless published a book with the self-explanatory title NHS Plc: The Privatisation of Our Health Care. In a similar vein, two years later, Michael Mandelstam published Betraying the NHS: Health Abandoned.

There are a number of problems with NHS Privatisation Paranoia. The most obvious one is that privatisation has a logical endpoint: you cannot keep on privatising something forever. You can spread the process out a bit, as was done with the privatisation of British telecom, but there comes a point when the organisation in question is, you know, private. This is why NHS Privatisation Paranoiacs often get cross when I ask them for a rough estimate of when they think the privatisation of the NHS will be completed. (It is, admittedly, a slightly mean-spirited question, a bit like asking a socialist what their favourite example of a socialist country is.)

Yes, the NHS works with private contractors. But taken together, spending on services delivered by private providers accounts for less than one tenth of the NHS budget, which is a very low proportion by international standards. Even in France and Italy, countries you would not accuse of an exaggerated faith in private entrepreneurship, a lot of publicly funded healthcare is provided privately; for example, about one in three hospitals are privately owned.

What about the claim that the government is deliberately underfunding the NHS, in order to set it up to fail, and weaken public support for it?

There is a minor, and a major problem with this idea. The minor one is this: statutory healthcare spending in the UK accounts for just under 8 per cent of GDP. This is not a lot by international standards: in Sweden and Germany, it is more than 9 per cent. But it is about the same as in Austria and Belgium, and more than in Canada, Australia, New Zealand, Finland and the Mediterranean countries. Are the governments of those countries also deliberately underfunding their health systems? If so, with what aim in mind, given that some of them are already partially private systems?

But the major issue is this: the NHS has gone through periods of spending restraint before, and the British public has never reacted to that by contemplating privatisation. Since 1983, the British Social Attitudes Survey (BSA) has been asking people in which areas (if any) they would like to see increases in public spending. The NHS has topped the list in every single year, and usually by quite a margin. There is always majority support for increasing healthcare spending, but there has been some variation over the years: support seems to fall when the NHS budget is growing rapidly, and to increase when it is growing more slowly. Between 2001 and 2011, the share of respondents who named the NHS as their first priority for higher public spending fell from 83 per cent to 68 per cent. Since then, it has increased to 79 per cent again.

The BSA also shows that 96 per cent of the public want healthcare to be provided by the government.

So if there is a secret plan to undermine public support for the NHS, and to create a political demand for privatisation, then clearly, that plan isn’t working. If this is a conspiracy, it is an exceptionally daft one. I don’t have a lot of confidence in the current government’s abilities, but I think even they would have figured that out by now.

Kristian Niemietz is head of health and welfare at the IEA.