Banks get bailed out, hospitals go to the wall

Disaster looms for the NHS. The combination of privatisation and funding cuts is bringing it to its knees. While the ConDem coalition trumpets its claim that NHS funding is protected and is in fact being increased by 0.1% per annum, in reality this amounts to year-on-year cuts of about 4% because of the scale of rising need. The NHS cannot survive this without irrecoverable damage. The story gets worse from 2015, when projected cuts in government spending rise from 2.3% per annum to 3.8%. Further privatisation, a wholesale attack on working conditions, and health care rationing will be the government’s answer.

Private Finance Initiative

The crisis is particularly acute with hospitals bearing the costs of Private Finance Initiative (PFI) buildings. The total cost of PFI projects across the public sector amounts to £301bn for a capital value of £54bn; £242bn worth of payments remain outstanding. The debt burden for individual hospital trusts is enormous: the capital cost for the new Walsgrave district general hospital in Coventry is £379m; the Hospital Trust will have to pay £4bn. South London Healthcare NHS Trust, a merger of three hospitals, two of which have onerous PFI schemes, has been placed in administration. The PFI costs are currently £61m a year; the Trust has a turnover of £440m and made a loss last year of £65m. A special team has been sent in to sort the Hospital Trust out by February 2013. For one of the hospitals, Bromley, this will be at least the fifth change of management over a ten-year period. The problems the Trust faces can only be solved by closing a large number of services or complete hospitals, or by selling off the Trust itself.

There are currently 20 other NHS trusts at risk of bankruptcy due to unaffordable PFI contracts. In the case of Peterborough City hospital, the finance director resigned as the PFI-funded building opened in November 2010. Within six months, the repayments on the debt meant that the hospital faced £40m loss on just £200m of income.

Quality of care is now routinely sacrificed with mounting financial pressures exacerbated by the ConDem Coalition plan for all hospital trusts to become foundation trusts. After much delay, the Care Quality Commission investigated the University Hospitals of Morecambe Bay NHS Foundation Trust serving 365,000 people in South Cumbria and north Lancashire. Its report was damning: inadequate numbers of doctors and nurses, an atmosphere of bullying and fear between staff and management, long waits, poor communication, lack of equipment, bed shortages and serious consequences for the health and lives of patients using the service. The report on North Staffordshire is due in October.

Cutting pay and conditions

With staff costs making up 70% of the NHS budget it is easy to see how the ConDem spending limits will be met: cutting staff or cutting their pay. As if on cue, a group of NHS managers from 19 organisations in the South West NHS have united as a cartel to drive through employment contract changes that include pay cuts up to 5%, the end of overtime payments for nights, weekends and bank holidays, reduced holidays and longer shifts. This will signal the end of the national contract Agenda for Change, which standardised pay scales for health service staff, including nurses, midwives and porters

Virgin and Serco

Richard Branson bought 75% of Assura Medical in 2010 and it is now called Virgin Care. It runs 120 NHS services already, including many GP surgeries, and has links with over 50% of the board members of three of the first wave of GP commissioning groups. Having recently signed a contract with NHS Surrey to run community health services, Virgin has now won a further contract to provide core NHS and social care services for children and young people in Devon. Virgin Care will take over the children’s services for three years from March 2013, taking on 1,100 staff currently employed by NHS Devon and Devon County Council and will be responsible for 2,400 children with disabilities, children’s mental health services, school nurses and health visitors.

The other bidders in Devon were a consortium involving the charity Barnado’s and a partnership involving Serco which is also aiming to become a major private provider to the NHS. Serco already has a contract for £140m for community health care in Suffolk and a 10-year contract at Derriford hospital in Plymouth to provide a helpdesk, ward housekeeping, patient and staff catering, portering and cleaning worth £140m over 10 years. It has implemented cuts in pay, cuts in hours and roster changes in the hospital. Its performance in running out-of-hours services for 500,000 people in Cornwall has proved a disaster for patients and staff. It failed on four out of eight quality standards when assessed by the CQC. One patient complained of having to wait at a clinic for 90 minutes. Another waited so long for a home visit they gave up and dialled 999. Because of staff shortages, Serco made some doctors work extra shifts overnight and other staff work 11-hour daytime shifts. This is the future the ConDem coalition has in store for the NHS.

Hannah Caller

Fight Racism! Fight Imperialism 228 August/September 2012

 

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