- Created: Wednesday, 07 December 2016 16:50
- Written by Robert Clough
There was no extra money in the Autumn Statement on 23 November for the NHS, despite the fact that it is so obviously in a catastrophic financial crisis, we must now expect savage cuts, with an escalation in rationing services and tightening of eligibility to those that remain. These will be set out in the local Sustainability and Transformation Plans (STPs) that are now being published and whose purpose will be to show how £22bn can be cut from the NHS budget over the next four years. Robert Clough reports.
What is happening to the NHS cannot be explained by Tory ideological hostility to state provision of health care alone. A nationalised health service is the cheapest and most efficient way of meeting the health needs of the working class under capitalism. The ruling class is not opposed to the NHS in principle: it simply regards its level of health care provision as far too generous for the working class. Although it seems that the working class pays through its taxes for the NHS as with any other state service, in fact the worker never sees this money nor has any choice about its deduction. The process obscures the underlying reality: that state expenditure is paid for by part of the surplus value extorted by the ruling class. Taxation is the means by which this transfer to the state takes place, and it reduces the surplus value available for profitable capital accumulation. Furthermore, since most of state health care is directed towards the maintenance of workers who do not produce surplus value for the capitalists, either because they are employed unproductively or because they do not work at all through retirement or disability, there is an added reason for the ruling class to axe it (for a thorough discussion of these issues, see Revolutionary Communist No 3/4: Inflation, the crisis and the post-war boom). The pressure is therefore on: the cost of the NHS must be slashed and slashed again. What will determine the outcome will be the extent of resistance both within and outside the NHS, and this presents a political problem for the ruling class: the popularity of the NHS is likely to generate serious opposition to A&E or hospital closures.
Tory lies about NHS spending
In the lead up to the Autumn Statement, Prime Minister May and Chancellor Hammond trumpeted the £10bn extra they claimed the government had given the NHS, fending off accusations that this was fiction. But fiction it is. First, the amount includes £2bn from the last spending round of the ConDem coalition government. Second, the balance of £8bn is in reality £7.6bn. £3.2bn of this is made up by a transfer from other Department of Health (DH) budgets – robbing Peter to pay Paul by slashing DH spending on capital projects, drugs, training and public health. Of the £4.4bn left anything between £2.5bn and £3.7bn will be used to pay off the underlying hospital deficits in 2016/17. Only by shifting £1.5bn out of the DH budget in 2015/16 could the government begin to plug the hospital deficits of £3.7bn which were reduced by ‘tactical accounting’ to £2.5bn for that year.
Overall the government plans are to increase annual NHS spending by a pitiful 1.1% in real terms between 2015/16 and 2020/21. But this is a quarter of both the average annual increase of 4% since the establishment of the NHS, and of what is needed to keep pace with increasing need and advances in medical technology. It is even less than the average annual increase of 1.2% under the ConDem coalition. NHS spending will increase by 0.7% in 2017/18 and by zero the following year. Underpinning this is a drive to cut the cost of every operation. Between 2010/11 and 2015/16 the cost ‘per-patient’ represented by the tariffs for each hospital procedure fell from £1,000 to £820. In response to this 18% cut, hospitals have reduced their costs by 13% leaving a 5% gap – the deficit.
Rising demand – falling performance
Despite this, demand for health services continues to rise:
- The number of A&E attendances was 5% higher in the second quarter of 2016/17 than in 2015/16.
- Over the same period, the number of emergency admissions from A&E rose 4%.
- The number of GP referrals to hospitals increased 3% in the year to September 2016.
- The number of GP appointments has risen by 10% in two years; the number of appointments for those aged 85 or more has risen 26%.
- Slashed budgets, however, mean that performance continues to deteriorate:
- Only 86% of those attending A&E were admitted, transferred or discharged within four hours of arrival. The target is 95% and has been missed every month since July 2013.
- Waiting lists at 3.9 million in September were the highest since December 2007 and are 600,000 more than in January 2016.
- 82% of cancer patients began definitive treatment within 62 days of an urgent GP referral; the target is 85%.
- The ten NHS regional ambulance services in England responded to only 68% of the most urgent 999 calls within eight minutes, the 16th month in a row they have failed to meet the standard of 75%.
Hospitals are being instructed not to declare emergency ‘black alerts’ and to pass routine operations to the private sector over the winter to prevent closures.
NHS and state welfare
The post-World War Two establishment of state welfare services including the NHS were born out of political necessity. The British ruling class needed social stability to allow it room to reconstruct the imperialist world order. It could not afford a repetition of the massive working class unrest that followed the First Imperialist War, fuelled as it was by the victory of the Russian Revolution in 1917. The 1945 Labour government, therefore, sought to head off possible political turmoil by directing a massive increase in state economic intervention which included a programme of nationalisations. Part of this involved the establishment of central government control over local authority and voluntary hospitals to create a national health service.
The profitable conditions of the post-war boom meant that the ruling class was prepared to continue funding a service of which the working class was a major beneficiary. However, the advent of crisis conditions in the 1970s heralded decades of ceaseless NHS reorganisation to try and contain expenditure. By 2000, however, the pressure of these changes, coupled with cuts in spending instigated by the 1992/97 Tory government and continued by the incoming Labour government, brought the NHS to the verge of collapse.
Labour government privatisation
As popular opposition mounted, the government realised that it would have to change direction or forfeit the electoral support of better-off sections of the working class to remain in government. Labour attempted to square the circle through a substantial increase in NHS expenditure while introducing market mechanisms in order to force through improvements in productivity. This, the government intended, would also encourage private health care companies to take over the delivery of some NHS services. Labour also forced the NHS to use private finance for any significant new building projects; PFI was to prove ruinously expensive compared to the previous use of state finance. While private companies have won substantial contracts to run NHS services under the Tory government and the ConDem coalition, none of them have approached the size of Labour’s Independent Sector Treatment Centre programme which lavished £5.6bn on private companies between 2003 and 2010 following a tendering process from which NHS organisations were excluded.
Many on the social democratic left in and around the Labour Party claim the government’s main purpose is to privatise the NHS. This is not the case. Private health care companies require a risk-free environment and assured level of profits before they invest in delivering NHS-commissioned services. The continued attrition of NHS budgets makes this less and less possible. Where privatisation does take place it will be mainly in diagnostic, community or primary care services where it might be possible to make money, but only at the expense of quality or service levels. The largest provider of such services, Virgin Care, posted a loss of £9m on an income of £40m in 2015, offset in part by £5m profit it made on a contract in Surrey. There will be no appetite for taking over acute or mental health hospitals after the fiasco of Circle Health’s management of Hinchingbrooke hospital which it had to give up after three years because of deteriorating service quality and finances.
It is the discipline involved in the tendering of NHS services that is key: it forces NHS organisations to find ways to reduce services, cut wages and intensify working conditions in order to hold on to contracts. The involvement of private companies is not central to this process. Thus, although NHS England invited expressions of interest in October 2016 for £15bn worth of specialist care services, a private sector spokesperson told Health Service Journal that any interest ‘will be at the margins.’
Social care in crisis
The crisis in NHS services has been exacerbated by draconian cuts in adult social care over the past six years. Between 2009/10 and 2014/15 local authority spending on care for older people was cut by 9% in real terms: overall, £4.6bn was taken from social care budgets over this period. This has led to a reduction of 26% in the numbers older people receiving funded social care – an estimated 400,000 people. Research published in 2016 shows that while 35% of elderly poor people needed some help with daily living activities, only 12% actually received it. Between 50,000 and 100,000 care home beds may close over the next four years. Although councils can raise extra money through a 2% increase in council tax, former Tory Chancellor George Osborne’s claim that this would increase available social care funding by £2bn a year was always a lie: in 2016/17 the extra amount from this source was £382m. The government also claimed that even more money would be available from the illusory Better Care Fund. Much of this was anyway taken from the NHS: and with cost pressures of 4% a year, the result will still be a funding gap in 2017/18 of £1.3bn to which must be added a further £600m cost of implementing the National Living Wage. The Autumn Statement did not mention this crisis, let alone offer any extra money to address it. The cuts mean that 220,000 fewer people were receiving meals on wheels in late 2014 than in 2010, a fall of 63%. Only 48% of local councils still provided meals on wheels, compared to 66% in 2014. The effect is expressed in the escalating use of food banks, and of record levels of hospital admissions for malnutrition which have tripled in ten years, 80% of them emergencies. The impact this has on the NHS will intensify: already record numbers of patients are being kept in hospital because a lack of social support outside means they cannot be discharged safely.
In an effort to distract attention from the crisis the government intends to crack down on what is often called ‘health tourism’, a very loose term which can include anyone using NHS services on a visit to Britain. At least 90% of this is covered by reciprocal agreements with other, mainly European, countries. The remainder amounts to between £60-80m a year (the King’s Fund) and £200m a year (National Audit Office), less than 1% of the £22bn NHS deficit. The 2016 Immigration Act now requires the NHS to seek proof that a patient is a resident and entitled to free NHS treatment. A senior Department of Health official has suggested that all patients should be asked to prove their eligibility for hospital treatment by producing a passport and evidence of their address. Around seven million people do not have a passport and would struggle to prove their entitlement.
STPs = service cuts
The principal mechanism for implementing the cuts demanded by the government is the local STP. There will be 44 in all, corresponding to geographical ‘footprints’ decided on by NHS England, each charged with delivering their share of the required £22bn savings by 2020/21. Scheduled for completion this autumn, about half have been published as we go to press. Management consultants may have drafted the plans behind closed doors, but local authorities within the footprints will have to agree to them if they are to be implemented. This will tie them into achieving the required cuts: Labour councils in particular will be put on the spot and blamed if the plans do not proceed.
Those STPs that have been published so far show that many of England’s 163 acute hospitals will have services removed, including cancer care, trauma and stroke care. Just as need is increasing, thousands of beds will be cut, including 535 in Derbyshire, 400 in both Devon and Yorkshire, 30% of all beds in Bristol, North Somerset and South Gloucestershire. One of the five acute hospitals in the South London footprint will lose all acute services and beds. Bedford hospital will lose its A&E, consultant-led maternity unit and most emergency surgery. There will be a downgrading of A&E units at Macclesfield (and at least one other unit in the Cheshire and Merseyside area), Milton Keynes, Teesside and Hinchingbrooke. Centralisation of childbirth units will also lead to downgrading at Yeovil hospital in Somerset and in hospitals in Surrey, Birmingham, Solihull and Leicester.
However, these plans are so complex that they are unlikely to deliver the cuts by 2020/21, and a slash-and-burn policy of rationing will in fact replace them. Most of the STPs require substantial capital investment which is not available: Cheshire and Merseyside, the second-largest STP after Greater Manchester, needs £755m. A survey of just under half of all Clinical Commissioning Group leaders at the end of October 2016 showed that nearly two-thirds had low to very low confidence that their plans would be delivered, and only two of those questioned had high or very high confidence, despite the fact they had been central to developing the STPs.
Soaring waiting lists, reducing eligibility for hospital services to ‘undeserving’ patients such as smokers or those deemed obese; restricting the availability of standard operations such as cataracts or hip replacements; increasing co-payments for other services such as replacement hearing aids; all these forms of rationing will be extended in the coming years.
Local campaigns will develop to oppose proposed closures: whatever the STP management-speak about improving services and making tough choices, the vast majority of people will see the plans for what they are: a programme for slashing NHS services. They must be made unworkable by mass mobilisations, and as a first step, by demands that no Labour Council endorses a single STP and that no NHS organisation implement the proposed passport checks.
Fight Racism! Fight Imperialism! 254 December 2016/January 2017