In the last weeks of Blair's election campaign, his repeated references to "more investment in schools and hospitals" took a sudden, if predictable turn. Blair announced sweeping public sector reforms which would bring the private sector into the heart of the NHS (and further into education as well). According to him, this would solve the problem of chronic under funding in these areas and in addition, would allow "private expertise" to be used to the benefit of the public good.

After the election, while the media speculated copiously about the planned increase in privatisation of health care, citing a leaked report from the Institute for Public Policy Research (entitled "Building Better Partnerships"), Blair used the Queen's speech to announce one aspect of the planned reforms: the plan to "decentralise" power in the NHS and to legislate in order to "regulate" the medical profession.

But in the Commons afterwards, Blair had to admit that his latest privatisation drive goes far beyond the limits of the existing Private Finance Initiative (whereby private companies build and manage hospital buildings) and that his government sees "no ideological bar" to bringing private companies into the management and delivery of services at every level of the NHS.

The public sector union, Unison said it might, in the light of these announcements, review its financial support for the Labour Party. John Edmonds of the GMB made indignant noises, echoing the words of the T&G's Bill Morris, who, in a post-election article in the Observer had written: "The mantra public bad, private good' must be dispelled." But of course this is not the present government's "mantra", though it was one chanted by the previous Tory governments. Blair knows how to "repackage" an old "mantra" into "new" reforms and what he and his health secretary Alan Milburn argue instead is that investment and expertise from the private sector is the only way to improve a service which everyone agrees is critically under-resourced.

Union bureaucrats are, however, past masters at raising a point of difference on a question which is not the issue and then claiming they have achieved a breakthrough or even a "victory". And in this case all they wanted was to be "part of the solution" for the public sector, as they put it - and not left out in the cold where they would be of no use in smoothing the bumpy ride that Blair's latest "reforms" might have. Bill Morris, for instance, is not opposed in principle to the private sector putting its foot in the NHS door. As he explained in his Observer article, "where it is necessary to introduce private investment into public projects, this should result in best quality services and best terms and conditions".

So having been called to a special summit at Downing Street on the 27th June, the union leaders were duly brought on board. As the Financial Times put it, Blair "calmed their fears", assuring them that there would be no "wholesale privatisation of the NHS" and that medical treatment would remain free at the point of use. But after leaving the summit meeting not one of them could claim to have been given any tangible guarantees - neither for workers' "terms and conditions" nor for patients.

This is hardly surprising. As Barbara Roche, now Labour's Cabinet Office Minister, explained on the BBC's "Question Time", on the 21st June: "I want what works. I am not ideological about this...the idea that you have these two things (private and public) in separate boxes is wrong...." In other words, for her, and for the government of course, there is no difference between the private sector "delivering" services and the public sector doing so, provided "it works". How it works is not the issue for them but for whom it works certainly is - not the population, at the receiving end of a service which does not meet its needs, but an army of profiteers, waiting in the wings ready to exploit these same needs. In a nutshell this is the content of Blair's new reforms. And of course this is not "wholesale" privatisation. It is very expensive privatisation indeed.

It is indisputable that the emergency situation which prevails in the NHS can only be met effectively by the state taking emergency measures to increase resources considerably. But Blair intends to use this need for huge investment - which the state allegedly cannot afford to put in - as a pretext to open up ever new areas of the NHS and social care to private profiteering. And this, despite the fact that the steps taken in this direction so far - in the NHS itself (leaving aside the disaster of privatisation of the railways) have already exposed the potential for catastrophe. Be it the consequences of the subcontracting of cleaning services which have led to dirty and infectious hospitals, or the fact that those hospitals already built under the Private Finance Initiative (PFI) cut the overall number of beds available by 32%, when bed shortages are the main cause of the present huge waiting list for in-patient treatment. But never mind, Labour has resolved to carry on regardless, whatever the cost to the population.

A state of emergency

The NHS, at every level, has been in a state of undeclared emergency for some time. Undeclared, of course, for political reasons. No Labour politician was going to admit this during the protracted election campaign. But nevertheless, Blair was forced to confront the anger of those directly affected by this crisis. There was Sharon Storer who accosted Blair during his electioneering visit to a hospital in Birmingham, over the treatment of her partner, who has cancer. Consultant orthopaedic surgeon Nicholas Packer told Blair when he arrived at the Queen Elizabeth Hospital in King's Lynn, Norfolk, that staff morale was "rock bottom". And then Richard Taylor, an ex-consultant physician, standing as a campaigner against the downgrading of Kidderminster General Hospital won a seat in parliament with a huge majority of 17,630 (58% of the vote) in a previously safe Labour seat (on a 68% turnout compared to the national average of 59%). This speaks for itself.

When Labour took over from the Tories - and Blair said on the eve of the 1997 election that the electorate had 24 hours to "turn around the NHS" (by voting Labour) - the waiting list for in-patient treatment stood at 1,158,000. Under the Tories it had mounted and mounted as they constantly cut away at public sector expenditure. But in December 2000 after nearly four years of Blair's regime, this waiting list was still over one million - at 1,034,000. That there should be even one patient in need of treatment waiting more than a few weeks is bad enough, but over one million? How can the NHS even pretend that it is still a national "health service"?

But then again, Labour had only promised to bring the waiting list for hospital treatment down by 100,000 and conveniently, they had just achieved this "target"after four years were up. And as has been revealed since then, the "waiting list for the waiting list", that is, the list of patients waiting for an appointment to see a hospital consultant in order to be allocated a bed, was higher in March 2001 - at 284,000, than it was under the Tories in March 1997 when it was 247,000.

Hospitals admitted having fiddled data to make lists seem shorter by suspending patients from them. The chief executive of the Plymouth Hospitals Trust had to resign when it was found that 3,000 names on their list had miraculously "disappeared".

Then there has been the scandal of "filthy hospitals", most of which were being cleaned by private contractors (253 out of a total of 700 hospitals in England received "poor" ratings for cleanliness); the 100,000 hospital-acquired infections per year - causing 5,000 deaths - due to poor hygiene, premature discharge of surgical patients to free up beds as fast as possible, as well as antibiotic resistance. Negligence claims against the NHS increased by 72% between 1990 and 1998, and alongside these, there are now 850,000 reported "incidents and errors" annually.

The shortage of trained staff is of course the most glaring "inadequacy". There are lots of figures bandied about on the size of the shortfall of doctors and nurses. But these statistics are not very meaningful. The NHS is the largest single employer in Europe and probably the world, with 970,000 employees - 340,000 of whom are nurses or midwives. To say that 20,000 more nurses are needed, to remedy the shortage, or 10,000 more doctors, as the government does, is little more than guesswork and patently far short of the mark if thousands of them end up being bogged down in administrative and managerial tasks as is so often the case.

But we can be sure of what we see with our own eyes. The evidence of crisis in the NHS is no longer merely anecdotal. Everyone either knows somebody who has had a bad experience or has indeed undergone one personally, be it delays in Accident and Emergency departments (the average minimum "trolley waiting time" is two hours), repeated cancellation of an operation, or even being refused the most effective treatment for a condition.

"Rationing" of both investigations and drug treatments has become the norm, and nobody even expects to see a specialist inside of 18 months. "Nurse specialists" are routinely taking full responsibility for seeing patients who would formerly have seen doctors while the "NHS Direct" telephone "consulting service", which was launched last year, is meant to compensate for the shortage of GPs. And now the public is also exhorted to ask pharmacists for health advice rather than "burden" GPs or Accident and Emergency departments with their ailments.

We also know that the NHS has been conducting a recruitment campaign all around the world, for nurses on temporary contracts to fill the gaps - amid much criticism for "stealing" these workers from poor countries which need them even more than Britain does. Worse, it has recently been exposed than many of these foreign nurses have not even been given nursing jobs in the NHS but have been pushed into casual jobs in private nursing homes or jobs in the NHS way below what they are qualified for, on the lowest wage grades.

We know too, that government spending on health falls far short of the European norm. Indeed, even if there was a 6% increase in real terms in government spending on health per year (as has been promised, but it remains to be seen what sort of accounting and other tricks will be used to make the actual figures look good enough) this would still only bring UK spending to 7.6% of GDP within three years compared to a European average of 8%.

The shocking reality is that this appalling degradation of the NHS has been allowed to happen at a time when we are told that the British economy has never been so healthy and that the government had "underspent" its budget for the public sector by £6bn during 1999/2000!

Blair "out-Tories" the Tories

The NHS, poor service though it may well be, will nevertheless cost the government £59bn over 2000/01. This may seem like a lot of money. And yet cutting expenditure had been the sole aim of almost every single one of the so-called "reforms" introduced by successive governments, ever since the inception of the NHS.

Of course these cuts are never presented as such. In the 1980s, under Thatcher, it was the bureaucracy and inefficiency of the NHS which were targeted in her rhetoric in order to justify the cuts. But the "innovation" of Thatcher's government was to allow the private sector to begin the process of parasitising certain areas of the NHS giant. This killed two birds with one stone, as it were. It gave profiteers the chance to increase their money-making enterprises with hardly any risk, since the NHS was a guaranteed "market" and it also "justified" cuts in funding.

But of course, despite the fact that the profit-making potential of NHS operations was not yet fully exploited when the Tories were displaced by Labour in 1997, there were limits to what both the public and the huge NHS workforce would tolerate. And this had begun to slow down the privatisation process.

By 1997, most ancillary services such as cleaning, catering, laundry, sterilisation, and some laboratories had been subcontracted. Hospitals had become autonomous "trusts" with their own budgets and were competing with other trusts for resources and services within an internal NHS "market". This gave hospitals an incentive to cut operating costs at the expense of patients and staff while creating a framework for the future participation of private players in this "market". GPs, who were always subcontractors anyway, were given independent fundholding status, with the power to "buy" services from hospitals and Health Authorities.

This was the so-called "purchaser-provider" split between those providing primary care - GPs and local public health bodies who were now known as "purchasers" - and the secondary care "providers", the hospital trusts. But of course, the NHS was still fully government funded, however inadequately.

But chronic under funding for so many decades meant that NHS infrastructure was beginning to crumble and something had to be done about it. The Private Finance Initiative (PFI), whereby capital projects, such as the building of hospitals or the investment in new equipment would be partially or wholly funded by the private sector and then "leased" back to the NHS, was launched under John Major, in 1992. It allowed payments for investment to be spread out over a long period of time without inflating the public debt, while offering huge profits to the private sector. However, PFI consortia began to increase their demands for more lucrative terms from the government and between in 1995-7, PFI schemes more or less ground to a halt.

It was up to Blair to give new life to the process, and he did. Adjustments were made to the contracts to be offered to private investors which made the "transfer of risk" more acceptable - even if the terms were already very generous: for instance companies building hospitals receive guaranteed repayments over 25-30 years and gain the operational contracts for these buildings. They also have the chance to retain the buildings rather than return them to state ownership after the 30 years are up. What is more, many PFI projects have continued to receive additional public subsidies to "help" them along.

Today, Labour prefers to talk about "Public Private Partnerships", to give the illusion that the public sector remains in control. But in fact the end result is the same as for PFIs. It insists that PFI and PPP are not privatisation by the back door. But of course this depends very much on how much "flexibility" is built into the operating contract granted to the private "partners" - flexibility which Labour has, in fact, increased. So the companies which own and run a PFI/PPP hospital for the NHS could, with only minor adjustments to a few clauses in their contracts, begin to run services, employ their own staff on reduced non-NHS terms - and perhaps, even better, eventually introduce charges to "customers", or at least to some of them.

Of course, as many commentators point out, in the long term PFI and PPP are very expensive ways to finance investment. Firstly because the state could borrow money at lower interest rates than the private sector. This additional cost is estimated to add an extra £50m for every net £1bn of PFI contracts. Secondly, the private sector aims to make a profit out of the transaction, so this adds a premium. For example, South Buckinghamshire NHS Trust's new hospital which was costed at £45m, will require a total repayment of £244.7m to United Healthcare over 30 years. Then of course there are the costs of the transaction itself - payments to a battery of lawyers, consultants and financial managers. And, as mentioned before, the additional state subsidies which are paid as "revenue support" just as if these were publicly-financed projects.

But of course the real object of the exercise is precisely to provide yet another source of profits for the private sector from the public purse. Instead of private capital being made available to the public sector, public capital is made available to the private sector, thereby allowing the state to subsidise private profit. Eventually patients and staff will have to foot the bill for the profiteers' greed, through cuts in services and conditions. Since this would be an extremely unpalatable dish to serve up to the electorate, politicians have the job of disguising it. And so far, Blair is doing a fine job.

Small wonder that the government's favourite think tank, the Institute for Public Policy Research, while criticising existing PFI schemes and pointing out that since they are publicly funded, they "incur future liabilities for the exchequer", recommended that PFI be extended to clinical and clinical support services and to some of the planned new diagnostic and treatment centres. It also advocated long term "partnerships" with the private and voluntary sectors to provide social care and private partnerships for the refurbishment and building of new premises for primary care.

It should come as no surprise either, that this report was sponsored by vested interests such as the insurance group, Norwich Union, the private health consortium, and financial consultancy, KPMG, among others. This report is considered to be a blueprint for the government's latest reforms.

As for Blair's undertaking to get rid of the "NHS market" - the purchaser-provider split - made in the December 1997 NHS White Paper, and, what is more, which Labour claims to have done, this is a complete travesty.

What Labour has done is to rename "purchasers", who "buy" services from the hospital trusts or other "providers". Primary care "purchasers" are now called "commissioning" bodies instead - who "commission" services rather than "buy" them. They have been restructured into larger units, ending GP fundholding on a small scale and replacing it with large scale Primary Care Groups or Trusts. These new Primary Care Trusts are really just fund-holding on a very much bigger scale - indeed they will eventually be given the power to spend 75% of the NHS budget!

But they also will take over functions previously carried out by social services such as home helps, and other personal care. These will now officially be services which are paid for on the basis of means tests, where previously local authorities could decide to fund such services themselves. Once again, the elderly and the disabled will be the first to pay, just as they already have to pay for residential homes.

Blair's new plans

It seems to be a characteristic of this government to repackage its ideas over and over and present them as "new plans" every few months. And since amid this flurry of words and paper, the NHS has got steadily worse, they have come up with even more words and paper in frantic attempts to cover up the cracks. So it is not only difficult to keep track of all these "plans", but it is just as difficult to identify which ones are really new.

Since 1997, every year, announcements of "major reforms" for the NHS have been made and since they all take time to implement, some of the 1999 reforms (laid out in 1997/98) are only just manifesting themselves - such as the setting up of Primary Care Trusts. In July last year, after Alan Milburn took over the Department of Health from Frank Dobson, another "new" plan was announced - a 5-year national plan this time, which would "modernise, rebuild and reshape" the NHS. It would create 7,000 hospital beds (but how many others will be cut, like at Kidderminster?), 500 "one-stop" primary care centres with GPs, dentists, opticians and social care professionals under one roof (yet another form of the Primary Care Trusts?), recruit 7,500 more consultants, 20,000 more nurses, cut waiting times, clean up dirty hospitals, break down the boundaries between professionals, etc etc. In short, this plan was of a mixture of promises which had been heard before (but never fulfilled) with an implicit large-scale development of private involvement in the NHS.

The legislative machinery for the implementation of this plan was contained in the Health and Social Care Bill which was speedily pushed through parliament just before the election. Tacked on to this Bill was the plan to abolish Community Health Councils (independent local patients' "watchdogs" which mainly deal with complaints against the NHS) - which had to be dropped due to a backbench rebellion. But this Bill still happens to give Milburn all the powers he needs to bring the private sector into parts of the NHS it has so far not managed to reach. In other words, the implementation of most of the latest "reforms" announced during the election and in the Queen's speech.

What these amount to are the so-called "decentralisation" of control, "a phased programme to put power and resources in the hands of the NHS frontline", to quote Milburn. The main effect will be to axe 60 of the existing 95 Health Authorities in England, in order to create 30 new authorities covering populations of over 1.5 million each, while the NHS Executive will be axed. Under the pretext therefore of devolving decisions to doctors, nurses and other "frontline staff", hundreds of civil service and NHS administrative jobs are to be cut, while 1,000 job will go in the Department of Health itself.

Health Authorities' management will be allowed to be put out to tender on a franchise basis with the "best performing management teams invited to apply". Said Milburn: "the NHS cannot be run from Whitehall", but Labour had been right to exercise firm central control in its first term to establish a "clear national framework within which local services can operate". Of course, now it may "be right to shift the centre of gravity to the frontline...so local health services can be given greater control" because this way, the government is shifting responsibility for privatisation onto the Health Authorities, perhaps under private management themselves, and the "frontline"!

Indeed, since Primary Care Trusts will be given the responsibility of spending 75% of the NHS budget, there will be a huge scope for these Trusts to subcontract work to, and buy services from the private sector without the state itself having to take the blame for the consequences - much in the same way as it was done in local government for instance.

Take the 500 "one stop" primary care centres for instance. Six Health Authorities have already been chosen for pilot schemes. £175m of public money has been set aside to finance LIFT (Local Improvement Finance Trust) which will help 3,000 GPs to find private funding to refurbish and expand their practices. In return, of course, the owners of these private funds will get a share of the money normally paid by the NHS to the GPs for this purpose.

Another "new" announcement was 100 new hospitals, to be built by 2010, mostly under PFI, but there is also scope for BUPA and other private health insurance companies to "develop" specialist units - the so-called "surgical factories" which are to process thousands of patients needing hip replacements and cataract operations, for instance, and will only exist thanks to NHS funding, thereby creating another channel through which the NHS budget will be used to line the pockets of profiteers.

While Milburn insists there is no plan to include clinical services in private contracts, what is the provision of specialist surgical services by private health companies, but precisely this? Such double-speak is quite conscious however, because one thing the government is sure about and that is that privatisation is an unpopular policy with the electorate. But having said that private sector managers will be imported into the NHS "to engineer a cultural change", why not private companies to accompany them?

It should never be forgotten that the ultimate aim of every government "reform" is to economise. And of course once private managers come into the NHS they will do just this. The consequences for staff and patients are not hard to imagine. Already nursing staff have been forced to become "flexible", and this squeeze on their conditions will continue as "the boundaries between professions" are altered. With few workers carrying out more functions, great economies can be made, after all. Multi-skilling is an old trick and has been used to cut thousands of jobs in manufacturing industry.

The patients will also have to "treat" themselves as another IPPR report titled "Future Patient" proposed recently. Since the government has "decided" that by 2004, waiting times to see GPs will be reduced to a maximum of two days (despite the fact that there are said to be 10,000 too few GPs nationally), patients are now to be "educated" in "self-diagnosis" and "self-treatment" and urged towards "greater self reliance" as a measure to clear doctors' waiting lists. And by the way, this report did not appear on April Fools' Day.

Healthcare must be the right of everyone

Whatever Blair may say, all of this can only lead to a two-tier health service, possibly with the introduction of charges for patients. This has been the case for dentistry for many years already so that today over 50% of adults are not even registered with a dentist. The poor general state of the population's teeth is testimony to it.

Whereas the majority of the population have to rely on a resource- starved facility funded by the state and the private sector is able to cream off profits from this same facility, the wealthy section of society can enjoy the benefits of private medical services developed with the aid of these self-same profits whose origin is the public purse.

But there is another way. An emergency situation should be met with emergency measures. And this would mean cracking down on the private profiteers' parasitism on the state, not facilitating it as the present government is doing. The main strength of the post- war NHS was its centralisation and the fact that it was a no- go area for private profiteers (with the exception of the pharmaceutical industry). This made up in some measure for the lack of resources which has been the NHS's main problem ever since its inception.

The high degree of centralisation of the NHS made it possible to achieve economies of scale and also allow long-term planning. Once the Thatcher government began to turn previously "joined-up" hospitals and local authority services into autonomous trusts and self-financing units, this advantage was eroded. It meant that the already existing inequalities between regions and districts in the provision of health were exacerbated. It set the stage for "post code rationing" where for instance one health authority decides to provide a new and expensive treatment for a particular disease and another cannot afford it so refuses to supply it.

Today the crisis in the NHS is not worse than the situation faced by the British government on the eve of World War II, when it had to institute an emergency plan to enable it to provide hospital and health care facilities for a population under threat of aerial bombing - and of course to cope with wounded soldiers from the front. The disjointed hospital provision of the 1930s was a serious obstacle as was the severe shortage of beds. There were two contrasting hospital systems existing side by side, distributed around the country in a totally unplanned and haphazard fashion.

On the one hand, there were over a thousand voluntary hospitals, independent of any public control, ranging from great teaching hospitals to tiny cottage hospitals and on the other, the hospitals for the poor, provided by local authorities. This should ring a very loud bell. The voluntary hospitals relied on private patronage and competed wastefully with each other to install prestigious new equipment, attracting more nurses and doctors accordingly. They could choose whom they treated and preferred acute cases. The chronically ill were shunted to local authority hospitals which had a shortage of nurses, huge wards and were mostly housed in dilapidated buildings. There was in fact a straight class division between these two kinds of hospitals.

This was the context in which, within two years, the Emergency Hospital Service and later the Emergency Scheme managed to organise a national health service for wartime. But it required a centralised and unified system. In just one year, 1,000 new operating theatres had been provided. Many thousands of new beds were set up in "hutted annexes". A national blood transfusion service was created. By the end of 1940, specialised facilities became widely available and free treatment was offered at first for war casualties but gradually to the population as a whole.

This whole scheme was so successful and improved standards so radically that the medical profession itself, which had set up a Medical Planning Commission, came out in May 1942 in favour of a unified, centrally planned public medical service under state control. And this was the model for the national health service proposed in the Beveridge report in 1942, "to ensure that everybody in the country - irrespective of means, age, sex, or occupation should have equal opportunity to benefit from the best and most up-to-date medical and allied services available... and to provide the service free of charge".

So would it be impossible for Blair's government to build 1,000 new operating theatres or provide thousands of beds by requisitioning buildings and using some of the current budget surplus to employ and train thousands of staff? Of course not. But like the governments of the wartime period whose rapid action was the response to a real external threat, so with Blair. Unless he feels afraid of the consequences if he does otherwise, he will go ahead and try to turn the NHS clock back. But he will only succeed if the pressure exerted on him from the profiteers is greater than the outrage of the majority of the population who are deprived of proper health care.

30 June 2001