U-Turn On Private Health

November 13, 2007 11:46 AM


Suddenly I feel unwell



Lifelong union man Alan Johnson was put into the Department of Health for one reason and one reason only: to buy off the fractious strike-minded NHS unions after the disastrous regime of Patricia Hewitt.

Obviously, your traditional union buy-off simply comprises dishing out taxpayers' money in the form of big pay awards. But Johnson's problem is that the money's all gone.

So instead, he's trying to placate the brothers and sisters by reversing Blair's much vaunted "reform" programme.

The latest step is reported today:

"A pioneering £700m-a-year government scheme to buy surgical treatment centres and diagnostic services from the private sector is set to be more than halved by ministers.

The move means that the original £700m a year’s worth of business will turn out to be worth less than half of that – possibly as little as £200m.

The dramatic scaling back of the second wave of big central contracts will delight Unison and other opponents of the drive to involve the private sector in the delivery of NHS care."

It's a U-turn that will cost taxpayers a packet:

"The late cancellations mean that the government will have to pay out up to £20m in bid costs to contractors, which include Netcare, Clinicenta and Alliance Medical. This is on top of £5m already paid out for scrapped schemes."

On top of that, we've already shelled out for procuring services we won't now be taking:

"Aside from the private sector’s costs, the health department had by March this year already spent £72m on the procurement.

The department admitted last month that just eight of the 190 staff in the health department’s commercial directorate were civil servants. The remainder were external hirings costing a total of between £88,000 and £120,000 a day – or the equivalent of between £20m and £30m a year."

This whole fiasco highlights some familiar themes. The health service reform programme was inflicted top-down on a workforce that had never even been consulted, let alone won round. The staff were seen as the enemy, inflicting scars on the back of the Prime Minister, and obstinately refusing to recognise the brilliant sunlit uplands onto which they were being led. No surprise they've resisted to the last ditch.

And once again, a half-baked attempt to bolt private sector efficiency onto monopolistic state provision has produced a hideously expensive mishmash. We taxpaying customers have ended up paying millions for something we're not even going to get. And the private suppliers are so hacked off they're unlikely to play ball again anytime soon:

"One senior executive said the companies were now very wary. “There is a trust issue here,” he said. “We have been led up the garden path. We are not sure we want to go up it again”.

It's the worst of all worlds. We've been left with an underperforming state monopoly, in thrall to embittered union throw-backs, and costing us well over twice as much as when Labour came to power.

Having used up all the money, they're taking us right back to square one.

Suddenly I feel unwell



Lifelong union man Alan Johnson was put into the Department of Health for one reason and one reason only: to buy off the fractious strike-minded NHS unions after the disastrous regime of Patricia Hewitt.

Obviously, your traditional union buy-off simply comprises dishing out taxpayers' money in the form of big pay awards. But Johnson's problem is that the money's all gone.

So instead, he's trying to placate the brothers and sisters by reversing Blair's much vaunted "reform" programme.

The latest step is reported today:

"A pioneering £700m-a-year government scheme to buy surgical treatment centres and diagnostic services from the private sector is set to be more than halved by ministers.

The move means that the original £700m a year’s worth of business will turn out to be worth less than half of that – possibly as little as £200m.

The dramatic scaling back of the second wave of big central contracts will delight Unison and other opponents of the drive to involve the private sector in the delivery of NHS care."

It's a U-turn that will cost taxpayers a packet:

"The late cancellations mean that the government will have to pay out up to £20m in bid costs to contractors, which include Netcare, Clinicenta and Alliance Medical. This is on top of £5m already paid out for scrapped schemes."

On top of that, we've already shelled out for procuring services we won't now be taking:

"Aside from the private sector’s costs, the health department had by March this year already spent £72m on the procurement.

The department admitted last month that just eight of the 190 staff in the health department’s commercial directorate were civil servants. The remainder were external hirings costing a total of between £88,000 and £120,000 a day – or the equivalent of between £20m and £30m a year."

This whole fiasco highlights some familiar themes. The health service reform programme was inflicted top-down on a workforce that had never even been consulted, let alone won round. The staff were seen as the enemy, inflicting scars on the back of the Prime Minister, and obstinately refusing to recognise the brilliant sunlit uplands onto which they were being led. No surprise they've resisted to the last ditch.

And once again, a half-baked attempt to bolt private sector efficiency onto monopolistic state provision has produced a hideously expensive mishmash. We taxpaying customers have ended up paying millions for something we're not even going to get. And the private suppliers are so hacked off they're unlikely to play ball again anytime soon:

"One senior executive said the companies were now very wary. “There is a trust issue here,” he said. “We have been led up the garden path. We are not sure we want to go up it again”.

It's the worst of all worlds. We've been left with an underperforming state monopoly, in thrall to embittered union throw-backs, and costing us well over twice as much as when Labour came to power.

Having used up all the money, they're taking us right back to square one.

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