Privatisation and marketisation through competitive tendering and outsourcing have been ongoing in the NHS and the public health sector for decades, much to the benefit of corporate interests profiting from the slow ‘drip drip’ dismantling of the health service.


As revealed in The Great NHS Heist documentary, the Conservative Party was ‘wargaming’ its plans for selling off the NHS and other public utilities as long ago as 1977, planning denationalisation “not… by frontal attack, but by a policy of preparation for return to the private sector by stealth”. Campaigning group WeOwnIt has also noted a 1988 pamphlet from the Tory-linked Centre for Policy Studies thinktank which suggested how profitable the NHS would be for the private sector.


And now, despite plans leaked earlier this month suggesting the government was considering reversing the controversial market reforms introduced in the 2012 Health and Social Care Act, the privatisation of services that could have been provided more efficiently by the NHS appears to have accelerated ‘under the cover of covid’ during the past 12 months. 


Two reports from the National Audit Office (NAO) published in November last year offer incontrovertible evidence of how this has played out, covering a period when new covid-related contracts worth a staggering £17.3bn were awarded, the use of emergency procedures meant that £10.5bn worth of these contracts were awarded directly to companies without any open competitive procedure taking place.


The Conservative Party’s default stance on public procurement – to spend extravagantly on private contractors while sidelining existing but underfunded NHS resources – has been on display right from the early days of the pandemic, with high-value contracts awarded to commercial partners (occasionally linked to Tory politicians) under circumstances of minimal transparency, and with no commitment to ensuring these arrangements are not carried forward once the crisis has passed.


Indeed, as the Guardian discovered last year, the head of one of the key, long-standing beneficiaries of the Tory government’s taxpayer-funded largesse – Serco’s Rupert Soames – was already privately suggesting that the pandemic could go “a long way to cementing the position of private sector companies in the public sector supply chain”.


Even before the pandemic began, analysis by the House of Commons Library in July 2019 – six months after health secretary Matt Hancock had assured MPs that there would be “no privatisation of the NHS on my watch” – revealed that private healthcare firms like Virgin Care and the Priory Group had raked in more than £9bn from the NHS’ budget in 2018, up 14 per cent from the equivalent 2014-15 figure. 


More recently, the total outlay on covid-related contracts awarded to private contractors over the past year may not become clear for some time – the successful legal challenge by the Good Law Project last week over the government’s failure to publish contract details within 30 days has yet to bear fruit in terms of new statistics – but information already in the public domain offers ample evidence of the commercial sector doing very well indeed out of the NHS despite that sector’s record of failures and underperformance.


Last month the Guardian reported that Medacs Healthcare, a company linked to the Tory donor and former party treasurer Lord Ashcroft, had scooped a £350m contract with the DHSC to supply laboratory staff for the government’s covid-19 testing operation.


This development follows neatly on from the awarding of contracts of undisclosed value last year to Deloitte, to set up and run drive-in testing centres – which soon became the focus of media coverage when test results for NHS staff were lost – and later to co-ordinate the new Lighthouse laboratories which effectively bypass the NHS’ existing network of 44 labs across the UK.


(With regards to the latter contract, a related development occurred in October last year, when the South East London Clinical Commissioning Group [CCG] entered into a £2.25bn 15-year deal with private company Synlab to take over its pathology network contract.)


Deloitte has also played a leading role during the pandemic in the sourcing of PPE items such as gowns, masks and visors. Supplies of these items – responsibility for which has mostly been outsourced in recent years – have frequently been in short supply across the UK during the past 12 months, and have often proved to be useless (thereby “wasting hundreds of millions of pounds”, according to the NAO reports).


Serco, of course, is the standout example of a private contractor being awarded NHS contracts despite a record of underperformance. 


In 2012 it admitted presenting false data on 252 different occasions to the NHS on the performance of its out-of-hours GP service in Cornwall. In 2018, it was revealed that staff at the Serco-run breast cancer screening hotline were not medically trained and had to use ‘cheat sheets’. The following year the company was fined £22.9m over fraud and false accounting allegations in relation to electronic tagging contracts with the Ministry of Justice.


Yet last October shares in Serco soared by 18 per cent on the back of profits from its latest contract – thought to be worth almost £410m – with the Department of Health & Social Care (DHSC) to take part in the privately managed test-and-trace set-up (in which it has again been accused of hiring staff with no medical training). 


In the same month, it was reported that staff from the Boston Consulting Group (BCG), which also has its nose firmly in the £22bn test-and-trace trough, were said to be earning more than £6,000 a day.


Yet only last week a report from the DHSC itself revealed that contact tracing – a major element of the test-and-trace operation – has had only a minimal impact (barely 5 per cent) on curbing the spread of covid-19, and that self-isolation alone was responsible for the majority of transmission reduction.


At the time of writing it was unclear whether the contracts with Serco and BCG contained performance-related claw-back clauses.


Equally questionable was the awarding of a contract to Capita – reported in 2019 to have mistakenly archived 160,000 patient records under an earlier contract with NHS England, and to have been stripped of a contract to run cervical screening after it failed to send out appointment invitations, reminders or results – to help the NHS recruit retired nurses and doctors last year.


The NHS is already heavily dependent on the private sector. Some CCGs spend more than 20 per cent of their budgets with non-NHS providers. A significant number of non-urgent operations and surgical procedures are already carried out on behalf of the NHS by private contractors. And the health service is on the verge of signing a four-year deal with private hospitals to help it deal with a huge, post-covid backlog of work.


Given that outsourcing is clearly being used to fill gaps in NHS provision created by years of underinvestment – the public health grant in England is estimated to have suffered a £1bn real-terms cut since 2015/16 – none of the healthcare covered by existing or already agreed new contracts is likely to ever return to the NHS, even under the latest leaked plans from the DHSC.


For an in-depth analysis of NHS outsourcing and contract failures pre-pandemic, check out our 2013-19 review here.

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