The Weekly paper of the New Communist Party of Britain
Week commencing 31st March 2017

Half of extra NHS funding went to private sector

IN THE autumn Budget statement of 2014, in the run up to the 2015 general election, the Tory-led coalition pledged an extra £2 billion for the NHS. Two-and-a-half years later it has transpired that about half of that money was spent on treating patients in the private sector, according to an analysis of health service data made by the Health Foundation for the Financial Times.

The analysis showed £901 million was spent on buying services from private and non-NHS providers in 2015/16. It said £800 million was spent buying the same kind of care from NHS trusts. The Government claims it showed the NHS was “making clinical judgments about delivering high-quality care.”

Then-chancellor George Osborne’s decision to allocate an additional £2 billion in his 2014 autumn statement was seen as a considerable coup for the Simon Stevens, who heads the NHS in England. It ensured that in 2015—16, health received its largest increase since the final year of the Labour government.

Osborne claimed this was a “down payment” on a plan drawn up by NHS bosses, which called for an extra £8 billion per year above inflation by 2020. The discovery that operations and other activities were outsourced to private providers because hospitals lacked the capacity to carry them out will intensify pressure on Stevens, as he prepares to deliver a report this week on a five-year “transform and sustain” plan to overhaul the system.

In 2014 Stevens said the Government had listened to his request for funding “to sustain frontline NHS services and kick-start transformation.”


But according to the Health Foundation’s analysis health commissioners spent a total of £901 million of the extra cash on buying care from private sector, and other non-NHS providers, compared with just £800 million spent on purchasing the same kind of care from NHS trusts. This means £1 in £8 of local commissioners’ budgets is now spent on care outside the NHS.

Anita Charlesworth, director of research and economics at the Health Foundation, said that the NHS was becoming “an emergency service”, as hospitals operated at close to full capacity to cope with unplanned admissions and “delayed discharges” of the elderly. She said: “Rising demand for emergency care meant that NHS providers haven’t had the capacity to deliver planned care and patients had to be diverted outside the NHS.“NHS hospitals were left squeezed by sharply rising drug and staff costs with little additional funding.

“The result was big deficits that had to be covered by raids on investment budgets.”

She said the NHS had to consider “urgently” how to ensure additional funds reach NHS providers: “The health service needs to plan better for emergency demand, fund emergency care fairly and make sure it gets the best possible price for care provided outside the NHS.”

The NHS’s inability to take full advantage of the extra funding to improve efficiency will deepen controversy over the decision to give health a more generous settlement than most departments.

The Department of Health said that the findings simply showed: “The NHS is making clinical judgments about delivering high-quality care for patients — the truth is that for many years the independent sector has made a contribution to helping the NHS meet demand.”