BBC On The Record - Broadcast: 24.06.01

Film: Film on the NHS. The Government says it wants to involve the private sector more in the running of the NHS. But are they prepared to take on their opponents in the unions and on the Labour backbenches.



TERRY DIGNAN: For those who use private medicine, it's a speedy journey to treatment. But it's taken Labour much longer to reconcile itself to the private sector. UNNAMED WOMAN: Good morning. Welcome to the London Independent. DIGNAN: The Tories were once accused of privatising the NHS with internal markets. So the speed at which Labour has embraced the private sector has shocked many in the party. The Government now pays for NHS patients to be treated in hospitals like this one, the London Independent. The next step is for the private sector to take over NHS services. The Government regards this as a bold and radical agenda. It's certainly alarmed the unions and many Labour MPs. Some even talk of a war against privatisation. Yet supporters of the private sector aren't too happy either. They fear the policy may be watered down if ministers try too hard to placate their critics. PROFESSOR JULIAN LE GRAND: On the one hand it's being pressurised by its traditional supporters, the public sector unions particularly, to rule out the use of the private sector in health and education. On the other hand it can see the logic of actually looking to who provides the best service, whether it's in the private sector or the public sector. Now, those two things run into conflict and I think you are seeing government ministers finding that conflict quite difficult to manage. DAVID HINCHLIFFE MP: I feel that within the Parliamentary Labour Party there would be tremendous opposition to any moves in terms of increasing the existing role of the private sector in the National Health Service. DIGNAN: When Tony Blair's battlebus arrived in Birmingham for the launch of Labour's election manifesto, few in the party realised what was in store for public services. In England and Wales the private sector was to be given the green light. Services would remain free but there'd be no ideological bar to managing them privately. TONY BLAIR: There should be no barriers, no dogma, no vested interests that stand in the way of delivering the very best services for our people. JOHN EDMONDS; The whole idea of private sector management in the health service, seemed to come up in the campaign out of nowhere. I mean I've been a part of the policy commissions of the party and that wasn't discussed there. There is a hint of it in the manifesto - a bit surprised that was included. But then the Prime Minister made a speech with a bigger hint and of course what then happened is the journalists were told 'have a look at the report by this think tank, IPPR' and a few bits of that were leaked and what we found then was a bit of a hidden agenda. DIGNAN: The private sector is moving into the NHS inexorably. Labour has embarked on a hospital-building programme using the Private Finance Initiative. Under PFI new hospitals are paid for and maintained by commercial companies. Even though some argue PFI doesn't provide value for money, the IPPR, which is close to Labour, will call this week for the policy to be extended. LE GRAND: I think the logic of PFI sends you towards saying, well what the government has to do is significantly increase the role of the private sector in education and health. You can't leave them just simply operating the ancillary services - it doesn't make any sense, it doesn't work properly. What you've got to do is actually be bolder and actually have the private sector manage - even own in some cases - the whole organisation. DIGNAN: Supporters of private sector involvement believe the health service could be transformed by an influx of the kind of commercial expertise that this hospital has. ANTHONY COLMAN MP: I think there's a situation where certainly in my experience having been a director of a FTSE 100 company that you can get a situation where you as a private sector person, you are perhaps more results orientated, more directional and more achievement orientated than perhaps often occurs in the public sector. DAVID METTER: You need management systems and you need people that are motivated in order to be able to produce the efficiencies on the scale that you need. And there's reason to believe that the private sector would be able to do this better than the public sector. DIGNAN: Why do you say that? METTER: Well the public sector generally is not motivated by efficiency or what underlies efficiency is the need for profit. DIGNAN: Staff here know that the London Independent must make a profit to survive. That may have become easier now that these hospitals are taking in NHS patients whose operations are paid for by the taxpayer. But many Labour MPs and union leaders are promising confrontation with the Government if ministers go further and allow a big expansion of the private sector into NHS hospitals. HINCHLIFFE: I don't see that they've a great deal to offer. I think that many of the examples of services that have gone from public into the private sector - Railtrack for example - very topical at the moment, don't auger well for what could happen in the National Health Service. EDMONDS: Whether or not there's going to be a row depends on how far the government intends to go. If the government simply wants to use spare capacity in the private sector, in private sector hospitals, for extra operations, no one is going to object to that. But if it means bringing private sector management, private sector practices into the health service and the profit motive into the health service, I think there's going to be a tremendous reaction from the public, never mind the trade unions. DIGNAN: While ministers have been keen to talk up private sector involvement in the NHS, some of their recent announcements suggest they're nervous of this policy. They've placed some areas of the health service off limits to the private sector. It's argued the Government's attitude appears contradictory. For example, ministers say clinical staff such as doctors and nurses won't be treated in the same way as ancillary staff many of whom have been transferred to the private sector. And the Government is to experiment with keeping even ancillary staff within the NHS at two PFI hospitals. LE GRAND: Most people who've looked at PFI think that's going in the wrong direction. If anything we should be moving the other way towards actually giving the private sector more control rather than less. EDMONDS: The government's made a series of statements ruling out things, clinical services will not be privatised. Ancillary staff will not now be automatically transferred to the private sector. That doesn't really leave anybody left. So it's very difficult to see how the private sector can manage a hospital in these circumstances, when the staff are apparently staying in the public sector. It seems to me to be a recipe for a mess and I think the government has got a lot of clarifying to do. DIGNAN: At a private hospital like this everyone is on a contract. If you're not up to the job, you're out. Commercial organisations say they need the power to hire and fire if they're to perform efficiently. ANAESTHETIST: Good morning, sir. Welcome to theatre. My name's Ron and I'm your anaesthetist for today. DIGNAN: According to the private sector, if it's to manage NHS staff, it must have control over them. ANAESTHETIST: Here we go, just breathe away normally, nice slow deep breaths. Off we go to sleep. METTER: The issue does arise if the employees are seconded what managerial controls and disciplines do the service providers have over these employees. Now if they are able to terminate their employment or terminate the secondment for poor performance, for example, then some of the issues fall away. DIGNAN: So, it's unclear how far Tony Blair is prepared to go in allowing private management to run parts of the NHS. The acid test is this - does he mean it when he says that neither dogma nor vested interests should stand in the way of using the private sector. Labour says some of twenty new surgical units could be privately-run. It could be an important step in evolving the private sector's role. Opponents fear this will happen by stealth which could explain why again there's vagueness about the proposal. EDMONDS: The reference in the Labour Party manifesto to special surgical units and the fact that these might be managed in the private sector, I think adds confusion to confusion. I mean special surgical units are what we used to call hospitals. So are these going to be managed in the private sector? And are the doctors and nurses in these particular establishments going to be managed by the private sector? We don't know. We think not and some statements from the government suggest not, but we're still not clear. LE GRAND: What the government is intending to do is use the private sector in a more incremental way. For instance, if they set up new services like a specialist cataract operation...factory in a sense, a specialist, a specialist unit that would just do cataracts, that could be managed by the private sector. Pathology services could be managed by the private sector. And in the long run, that may well evolve towards actually transferring a whole hospital to the private sector and seeing, comparing how that works in contrast to the public sector. HINCHLIFFE: Well I would personally see that as being a complete betrayal of everything the Labour Party stood for, since the 1940s, when we introduced the National Health Service. I think it would quite frankly cause outrage within mainstream Labour Party circles who are already uneasy about some of the noises being made about greater involvement of the private sector. DIGNAN: Independent hospitals are offering NHS patients the best that money can buy. Now Tony Blair wants private sector expertise to be extended to the public sector. He's being advised to allow companies to take over a number of NHS hospitals. LE GRAND: If we were moving towards something like ten per cent, I would think that would give quite a useful gingering up process for the National Health Service and that might be the target to aim for. DIGNAN: The Government wants to go in the direction of more private sector involvement in the NHS. But will the pace at which it pursues this policy be slowed by attempts to reassure opponents of the idea? HINCHLIFFE: We're gonna go half-way and I don't believe that that's achievable and I think that the problem that the government have got at the moment is how they can in practical terms, bring this new ideology into the health service without it having quite damaging effects. LE GRAND: I think the government does have to start presenting a consistent picture on this, I think that they are committed to some sort of bold transformation of public services and all credit to them for that, but that does mean that they are probably going to have to bite the bullet, of certain areas, like involving the private sector to a much greater extent than they previously have so far. DIGNAN: So has Tony Blair got the nerve to take the NHS into the bright new world of the private sector? If he really believes that's the way to transform the health service, he's going to have to take on those he calls the forces of conservatism - the unions and their allies in the Labour Party. He says he's got the scars on his back from previous confrontations. This time the stakes are much higher.
NB. This transcript was typed from a transcription unit recording and not copied from an original script. Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy.