Will Labour rescue the NHS, or implement “Lansley-lite”?

By Todd Hamer

“The Tories are marching over the bridge that Labour built” – Dave Prentis on the Health and Social Care Bill.

Andy Burnham made a pledge at the TUC rally in March this year that he will repeal the Health and Social Care Act if he is health secretary when Labour are next in power. But is this promise sufficient?

Burnham himself said that the Tory’s legislation “represents a break with 63 years of NHS history and a ‘genie out of the bottle’ moment.” [1] How will Burnham put the genie back in the bottle? What is his alternative to the HSCA? And what does this mean if Burnham is not Labour’s health secretary after the next election?

The following analysis describes Burnham’s recent efforts to lead the opposition to the Health and Social Care Bill (HSCB). It shows that his policies are woefully inadequate. It argues for a radical break with the pro-market policies of New Labour and a progressive policy based on the founding principles of the NHS that can position Labour at the forefront of the movement to save the NHS.

Burnham on the cuts

The majority of cuts that the NHS is currently experiencing were originally planned by Andy Burnham while he was Health Secretary. In fact Burnham is so enthusiastic about the “Nicholson challenge” (a plan to flatline NHS funding for 5 years) that one of his first interventions as Shadow Health Secretary was to criticise Lansley for planning to increase health spending! [2] Lansley’s promise of increased funding never materialised and in fact he has cut spending in two successive years (£766 million 2010-11, £26 million 2011-12). Nevertheless, the fact remains that in his first debate as shadow Health Secretary Burnham situated himself to the right of the Tories.

During his time in office Burnham backed the recommendations of Sir David Nicholson, the chief executive of the NHS, to make £20 billion “efficiency savings” by 2015. Nicholson pointed out that rising demand due to the ageing population and new technologies cost the taxpayer an extra £20 billion by 2015. He advised the government to halt extra funding and attempt to find the extra cash by shutting down hospitals and moving care to the community. Burnham concurred.

In the context of the HSCB, the Nicholson challenge is the main motor force of privatisation. Before Labour left office the NHS was considered one of the most efficient health systems in the world [3]. Before the Tories can privatise the NHS there is a job of driving down the standards and world-beating efficiency to create space in the market for private sector competitors. Burnham is right to bemoan rising waiting times. He is also right to point out the “Tory NHS” will mean patients have two choices: “wait longer or pay to go private”. But he cannot draw any political conclusions from these observations as long as he stands by his policy to implement £20 billion cuts with the inevitable effect of eroding the free NHS service and opening up the market for the private sector.

Burnham on privatisation

Burnham has done his best to expose the fact that the Tories are trying to privatise both commissioning and NHS provision. But here again, he struggles because his own policies are mere watered down versions of Lansley’s.

Whilst he is opposes Lansley’s plans “to let market forces rip right through the system with no checks or balances” [4] he is also at pains to stress that “without the contribution of private providers, we would never have delivered NHS waiting lists and times at historically low levels” [5] . His main problem with privatisation is that the Tories want “unchecked privatisation” whereas he would like to see “the private sector working at the margins providing innovation and support.” [6] The problem with this analysis is that market forces tend to take on a dynamic of their own – interfering in clinical decision making, creating unnecessary bureaucracy and expanding and creating new markets.

To some extent this is seen in Labour’s own manifesto pledge to “[give] Foundation Trusts…the freedom to expand their provision into primary and community care, and to increase their private services—where these are consistent with NHS values, and provided they generate surpluses that are invested directly into the NHS.” [7] Market pressures from Foundation Trusts to expand their private work led Labour to accept proposals to raise the private patient income caps. Burnham has since claimed that he was only planning a “modest loosening” of the cap. But it is difficult to oppose the Tories plan to give over up to 49% of NHS beds to private patients when the Labour policy is nothing but a smaller step in the same direction.

Will Burnham deliver?

Despite being almost universally rejected and ridiculed, including by leading Liberal Democrats and the Tory’s own appointed head of the Commissioning Board, Andy Burnham has struggled to articulate a coherent opposition to the Tory’s Health Bill because he agrees with the general direction of travel.

He agrees with Lansley that the NHS needs cuts of £20 billion. He agrees that hospitals should have greater freedom to charge for private beds. He agrees with the private sector running NHS services. Where he differs is that he believes the Tories are moving too far and too fast. Although he has promised to repeal the Bill, he has since qualified this with a promise to avoid any “top-down reorganisations” [8]. And in case anyone was confused about the Labour party position, Ed Miliband has also entered the debate stating his approval of “clinician-led commissioning” [9].

Cut through the bluster and Andy Burnham’s vision is basically Tory policy minus the Maoist execution and with a bit more regulation. Burnham would have courted a little bit of private enterprise, encouraged a little bit of clinician led commissioning, had a little increase in private patient income cap and made all of the cuts. His vision is HSCB-lite. Miliband and Burnham have both stressed that much of Lansley’s programme could have been executed without new legislation.[10] If Burnham is the next Labour Health Secretary then his promise to repeal the Bill without any top-down reorganisation will probably leave much of the new infrastructure in place.

A socialist alternative

Entirely missing from this debate is a rational evaluation of the pre-Thatcher NHS. The Tories drove through this policy arguing that the NHS was bureaucratic and wasteful. Nobody from the Labour benches raised the obvious objection. The waste and inefficiencies of the NHS bureaucracy are the result of Tory and New Labour attempts to introduce market mechanisms and PFI. For much of its history the NHS was a state-planned organisation run on the basis of block grants and risk-sharing. It was occasionally a bit clunky and it was chronically underfunded but from 1948-1980 the bureaucracy accounted for just 6% of health expenditure. With the introduction of the Tory “internal market” and the continuation of this policy with New Labour’s “purchaser-provider split” the bureaucracy swelled to around 14% health funding. Health economist, Allyson Pollock, estimates that in the new system “billing, invoicing, marketing and advertising will add between 30% and 50% to costs” [11]. In the USA, with a fully privatised system administration costs account for a third of all health spending [12], 50 million are without health insurance [13] and they spend nearly 17.4% GDP on healthcare (compared with 9.8% in UK) [14].

Whilst the rising demand for healthcare is significant, the NHS is founded on the principle that free state-of-the-art healthcare is a right. If society could provide a universal and comprehensive service in 1948 when national debt exceeded 200% GDP then it can surely provide it in 2012. When Nye Bevan set up the NHS in 1948 with a national debt exceeding 200% GDP, he was prepared to win an argument about the redistribution of wealth from the rich to the poor. The choice to avoid this debate is a political choice that puts Labour politicians on the wrong side of the class divide. New Labour oversaw a widening gulf of wealth inequality back to pre-1945 levels. At a time of economic crisis, the policy of being “intensely relaxed about people getting filthy rich” now comes at the cost of increased waiting times, treatment rationing and staffing cuts.

These arguments and evident truths should inform a rational discussion about the privatisation of the NHS. The labour movement must imagine the possibilities for an NHS run on the founding principles of collaboration, risk-sharing and democratic planning. The Labour movement must fight for such a policy and fight for leaders willing to argue it and implement it.

1. 1. Hansard, 16 January 2012
2. “I did not say that a Labour Government would cut the NHS budget; I said that we would maintain it in real terms, not increase it, as the Secretary of State proposes.” (Andy Burnham, Hansard 7th Sep 2010).
3. Davis, J. Mirror, Mirror on the Wall, report (June 2010)
4. Hansard 12 July 2010
5. Hansard 26 October 2011
6. Ibid
7. Labour Party Manifesto 2010
8. Hansard 16 July 2012
9. The Times 27 February 2012
10. Hansard 16 January 2012; The Times 27 February 2012
11. Guardian 27 August 2012
12. Woolhandler S, Campbell T, Himmelstein DU. Costs of health care administration in the United States and Canada. New England Journal of Medicine. 2003;349(8):768–775
13. US Department of Health and Human Services, September 2011
14. OECD Health Division (30th June 2011) OECD Health Data 2011 – Frequently Requested Data

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