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Privatisation is not the answer

We need a proper strategy to revitalise our public services – expecting privateers to rush to the rescue is no answer to the problems in the NHS and elsewhere, warns DIANE ABBOTT MP

PUBLIC services in this country are in crisis, which is now widely acknowledged even by those in government. Fixing that crisis is imperative for the livelihoods of millions of people in this country, and the wellbeing of almost all of us. A failure to do so will have drastic social and political consequences.

The problems of public services are so profound that they are even acknowledged by the Tories. The Prime Minister Rishi Sunak recently apologised for his failure to correct the problems his party has created in the NHS.

Yet the depth of that crisis is not fully understood among those who accept the essential truth of the point. As a result, the onus is on politicians and political parties to say how they will tackle it.

Unfortunately, to date the Labour front bench has not proposed any convincing plan to address the generalised crisis of public services, not even in outline. In fact, to fill that vacuum all we have had is the shadow health secretary Wes Streeting making a series of statements or writing articles arguing that the greater involvement of the private sector is the answer to the crisis in the NHS. 

By default, this is the current leadership’s answer to the current crisis. There is only one other plank to the current platform, as far as anyone can tell. This is idea that there will be stronger growth at some point in the future. The fruits of growth can then, at a later date be used to improve public services.

Naturally, we all hope that the economy will improve at some point. But hope is not a solid basis for policy. The International Monetary Fund (IMF) recently published its forecasts for major economies, regions and the world as a whole. It makes grim reading on the British economy.

The IMF is far from being an infallible authority. But its bias tends towards optimism on the major Western economies. It certainly cannot be accused of left-wing bias. Essentially the IMF projects a continuation of the long stagnation of the British economy. This year will be barely any better than and output per head will not grow at all. Only marginal improvement is expected in future years.

Anyone hoping that the “animal spirits” of the private sector will rescue the economy looks set for disappointment. By extension, the same applies to anyone hoping that economic recovery will rescue public finances and allow a major improvement in public services is also set for disappointment.

This is where misconceived idea that privatisation can be a panacea comes in. Some readers will know that I have recently been in a spat with Wes Streeting on X (formerly known as Twitter) on this issue. 

To be clear, if there are tasks that the public sector finds impossible to do, or is much less efficient in doing than the private sector, it would be pointlessly ideological to argue for it. If artwork were being commissioned for a major new public building, say, then it would be sensible to commission artists to provide it.

The NHS and its backlogs do not fall into either of those categories at all. Ninety-nine per cent or more of what is needed to address the crisis in the NHS can be more readily and easily accessed in the NHS than anywhere else.

To take the most obvious example, Streeting’s plan is to commission the medical staff and resources from the private sector to address NHS backlogs. But no private-sector organisation maintains vast spare personnel, idling until the day they might get the call from the public sector for help. We know that private health providers will draw personnel from the NHS itself in order to meet any increased demand for their services. 

This is what they do already, and it already constitutes a huge drain directly on resources. It was revealed in January this year that hospitals and GP surgeries across Britain are now paying a record £4.6bn for agency personnel and another £5.8bn for doctors and nurses on staff to do extra “bank” shifts to plug gaps in rotas.  

At the time Streeting was reported as saying that “years of neglect of the growing NHS staffing crisis by Conservative governments had obliged “desperate” hospitals to spend “huge” sums on agency staff, including doctors who can cost more than £5,000 to hire for a single shift.” 

That was true then. But what he now promises is much, much more of the same. More waste, more inefficiency, more of a drain on the NHS, and vastly greater amounts diverted to the private sector.

There are fundamental problems with this approach and, as ever with the NHS, they are highlighted by the sheer scale of its functions. The first, as the Office for National Statistics (ONS) recently revealed is that 9.7 million people are one waiting lists. Yet there around just 160,000 private hospital beds in this country. Over a year ago, the Tory government signed a deal with the private sector to use as much spare capacity in their network as possible. 

This means the amount of spare capacity that the private sector could currently provide is tiny. They are already contracted to offer any spare capacity they might have. A meaningful dent in current waiting lists could only be made by building up the private sector. 

The second fundamental problem is that this could only be done by draining resources from the NHS and incurring vastly greater costs. This is necessarily true to cover the additional costs of the private-sector providers, and especially their profits. A comparison of the cost of routine operations tends to show the private sector costing about 50 per cent more than the NHS. Most private providers will not touch emergency or highly complex cases at all.

Naturally, it is these additional costs and the profits that can be derived from them that so interest the multinational provide healthcare providers. This is the key motivation behind their generous donations to political parties and individual politicians. Unfortunately, the recipients include members of the current shadow cabinet.

Privatisation cannot be an answer to the crisis in our public services, or our key infrastructure as the rip-offs and scandal of water and energy privatisation show. But the political consequences could also be severe.

These will be among the major tests of an incoming Labour government. And a huge majority means that the public will blame no-one else for failure.

Diane Abbott is MP for Hackney North and Stoke Newington.


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