From: John Lister <[log in to unmask]>
Date: 7 September 2014 13:04:22 BST
To: <[log in to unmask]>
Subject: Re: Privatisation: 6%
Reply-To: John Lister <[log in to unmask]>

Hi Martin
6% of the English NHS budget is £6.3 billion: but much of the budget consists of services that the private sector does not (and does not wish) to provide.
So the £6.3 billion needs to be seen as a share of not the total spend, but as a proportion of the relevant spending in the NHS.
Private sector contracts are concentrated in elective care, and  (the main growth areas up to now) community health services  and mental health.

I am ignoring general practice, since so far the contract value is tiny in comparison, and the contracts have often been short-lived.
I am not sure which budgets cover the Patient Transport (non emergency ambulance) services which have also been heavily and disastrously privatised, but again with relatively small budgets.
I am also not sure how we could disentangle or put a national figure the finances of pathology services and other specific areas: maybe somebody else can.
Since these figures are not known, let's deduct an arbitrary (almost certainly excessive) guesswork figure, say £800 million for all of them.
This leaves an admitted private spend of £5.5bn a year by the NHS in England which we might compare with relevant NHS budgets.

The most recent breakdown I can find indicates elective care budgets are around £16 billion, community health services £11-12 bn and mental health less than £7bn.
However the most recent estimate of the private sector slice of mental health suggested it's around £1 billion a year, so this means that around 14% of the (shrinking and inadequate) mental health budget is now squandered on low-quality private care.

For the remainder, the true percentage to give a real picture is £4.5bn private spending out of £27-28bn elective and community health budgets.
This is around one sixth (16-16.6%) of the relevant health spend.
The impact is not evenly spread, and the impact on NHS and Foundation trusts is not limited to this, since the private sector takes only the least complex elective services, leaving the NHS with complex cases and emergencies, but with reduced overall caseload, and therefore a smaller financial base to sustain services.
In community services we can see that the private sector has won contracts largely on the basis of loss leaders, and has so far largely failed to deliver any profits.
Serco now set to pull out of its contracts, and other companies are in serious problems.

In addition we have a series of major contracts out to tender -- Cambridgeshire due to announce any day, and quite possibly set to award a £700m 5-year contract to Virgin.
Elsewhere MSK and other contracts are being tendered as we discuss this.
NHS Kernow is putting elective services worth a quarter of the Royal Cornwall Hospital Trust's budget out to  tender.
So the 16% figure could be set to increase significantly. The trend as NHS Support Fed has shown, is to private sector providers.

It's also clear that if the Tories get back in they will speed through this process and hand over all the remaining profitable parts of the NHS to their mates, regardless of cost or impact on other services.

Many of us, however still need to be convinced that Labour has learned its lesson, and that Andy Burnham's promise yesterday that the NHS would be the 'preferred provider' would translate into Labour acting boldly to scrap the wasteful NHS market they helped create.

cheers

On 07/09/2014 10:35, Martin Rathfelder wrote:

[log in to unmask]" type="cite">A department of health spokesman said in September 2014 : "Use of the private sector in the NHS represents only 6% of the total NHS budget - an increase of just 1% since May 2010.  Charities, social enterprises and other healthcare providers continue to play an important role for the NHS."

Does anyone know what this 6% might refer to?  It seems improbably low.

NHS For Sale has a nice graph showing about 9% on NHS providers:

http://www.nhsforsale.info/private-providers/spend-on-non-nhs-providers/non-nhs-spend-history.html

If we are talking about "the total NHS Budget" then surely we should be counting primary care, drugs and equipment?


Can anyone point me to useful analysis or data which give a more comprehensive picture?

[log in to unmask]" type="cite">

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Martin Rathfelder
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