By Pollock, Allyson
New Statesman (1996) , Vol. 135, No. 4790
According to Patricia Hewitt the NHS has had its best year ever. So why is the Royal College of Nursing threatening industrial action over cuts and closures, and why did the annual conference of Unison, traditional Labour supporters, greet the secretary of state with heckling? In her words, "the NHS must modernise or die". So why, from Surrey to Manchester and from Gateshead to Shropshire, are local people banding into hospital action groups and "Keep our NHS public" campaigns in an effort to defend the health service? The chief targets for cuts are mental health services, palliative care, older people's care and emergency hospital care, yet Hewitt maintains, to general derision, that quality will not be affected.
The government says the NHS's deficits for the year just ended total [pounds sterling]600m-[pounds sterling]800m out of an [pounds sterling]80bn budget and blames them on greedy doctors and nurses and bad local management. This is dishonest. Pay accounts for 60-70 per cent of NHS hospital budgets, but pay awards accounted for less than 30 per cent of the new money and should have been absorbed easily. Nor was greed involved; the increases returned NHS pay to previous levels after years of pay freezes. The hourly rate of the lowest-paid rose initially from [pounds sterling]5.16 to [pounds sterling]5.67 an hour; medical consultants got increases of 4-5 per cent a year, taking them to averages of between [pounds sterling]75,000 and [pounds sterling]95,000, while managers--their numbers swollen by the complications of marketisation--got 7.5 per cent more last year.
The real reason for the decision to axe in excess of 13,000 clinical staff and 1,000 NHS beds, plus associated services, is market-oriented reforms such as "choose and book", "payment by results" and foundation hospitals. Hospitals and services are required to behave like stand-alone companies, competing with each other and private corporations for income and patients. But their ability to balance the books is undermined by a requirement for primary care trusts--through whose hands 80 per cent of all NHS funding passes--to transfer 15-20 per cent of their budgets away from NHS hospitals and NHS primary care providers to for-profit, and usually multinational, healthcare corporations. The government plans to hand over most of the NHS budget to the private sector through "practice-based commissioning". Under this policy, local primary care trusts will eventually contract with for-profit companies such as the US-owned UnitedHealth Europe--whose president is Simon Stevens, Tony Blair's former health policy adviser--to provide GP services, transferring to it the 80 per cent of the NHS budget for all health services currently spent by primary care trusts. …