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BMJ. 2007 October 20; 335(7624): 794–795.
PMCID: PMC2034701

Backpedalling from Blair's privatisation agenda

Nicholas Timmins, public policy editor

In the four months since Gordon Brown became prime minister, what has happened to the Blairite agenda of choice, competition, and—most particularly—the use of the private sector as key drivers of NHS reform? On the face of it, even an informed observer has every right to feel confused.

Since 27 June, Alan Johnson, the new health secretary, has announced the cancellation of a third round of independent sector treatment centres—when no third round was in fact ever planned. A whole clutch of contracts for second round independent sector treatment centres and for diagnostics—originally due to be signed off late last year and early this year—remain under permanent review. Only a minority are now expected to go ahead.

Members of a high powered board, which advised the health department's commercial directorate on these and other central contracts, have resigned together. Board members included a Rothschild banker and senior legal, investment, and private finance specialists. They were, they declared, “wasting their time” because, as one member put it, “no one is listening” since Tony Blair went.

The terms “competition” and “use of the private sector” as a means to reform the NHS have been entirely absent from the speeches of Gordon Brown and Alan Johnson. Neither do they appear in the chapter on how public services are to be “transformed” in the recent comprehensive spending review—although “choice” does receive a brief, passing reference.

The Confederation of British Industry, the employers' organisation, the member companies of which have a direct interest in this agenda, fears that reform on these lines—and not just in the NHS—is “on the wane.”

Against all that, the department has—11 months late—finally announced the framework contract that will make it easier for primary care trusts to buy in help with commissioning from 14 private firms—four of them big US health insurers and care managers. The department has also published a new advertisement to seek new suppliers of operations and diagnostics ahead of the introduction from next April of “free choice” for patients of any hospital prepared to treat at NHS prices.

The interim report from Ara Darzi on the “next stage” NHS review called for patient choice to be “embedded within the full spectrum of NHS funded care” (BMJ 2007;335:739, 13 Oct). It also said that new providers should be brought in to help extend GPs' opening hours. Asked a direct question—if he was committed to those proposals—Mr Johnson said, “Yes, there is a role for the private sector here, and there is a role for it in the rest of the NHS.”

The health department's new three year delivery agreement with the Treasury talks of “a richer landscape of diverse providers” as one of the tools to be used. And in private, ministerial advisers in both Downing Street and Richmond House insist nothing has changed.

In practice, however, it has. The full Blairite agenda is indeed on the wane—at least for now. And some important distinctions are emerging between how what remains of it will be used in primary and secondary care.

The Blair agenda included not just bringing in the private sector to provide additional capacity to the NHS, but its use as a challenge to existing NHS institutions—and on a scale large enough to create a sustainable private market that would supply a continuing challenge. In the hospital sector, that is evaporating.

The original contracts for independent sector treatment centres were meant to be worth £1bn (€1.4bn; $2bn) a year. But the first wave amounted to only £370m. And of the £550m intended to be in the second wave, only about £150m worth of business, if that, now looks likely to emerge. Less than half of the additional diagnostic contracts are now likely to operate. With one important caveat—which we'll come to—far from the independent sector performing “up to 15%” of elective procedures, as John Reid suggested in 2004 when health secretary, the proportion next year looks likely to be only 6-7%, according to the healthcare analysts Laing and Buisson.

For commissioning, the framework contract has been approved. But, at least initially, contractors themselves acknowledge it is likely chiefly to involve data analysis and commissioning support—not the complete “end to end” outsourcing of a primary care trust's work that at one point was under consideration in Oxfordshire, Hillingdon, and elsewhere.

But in primary care, the government may indeed invite new providers in to challenge GPs over opening hours—although that will happen locally, not through any central contract. Ministers seem more comfortable about using the private sector in areas that have fewer doctors than needed, where they can increase capacity, and as challenge to the practice of existing family doctors, than they do in the hospital sector. This is, perhaps, chiefly because the risk of large scale disruption is smaller in primary care than in the secondary sector, where private sector competition could seriously undermine some hospitals' finances.

The big unknown in this analysis, however, is patient choice. If from next April patients choose—or, more precisely, if they are allowed to choose, as promised—to use NHS financed care provided by private hospitals and independent sector treatment centres for their elective operations and diagnostics—and they do so in large numbers—then a much bigger and sustainable market for the private sector could indeed still emerge.

Four months in, it is clear that the Brown government is much less ideologically committed than the Blair one to the use of the private sector as a challenge to the NHS as opposed to using it, probably temporarily, to provide additional capacity. The days of big, central, ministerially driven, private sector contracts are dead. But there remains an outside chance that patient choice—and the decisions of commissioners locally—could yet make Blair's vision a reality.


Articles from The BMJ are provided here courtesy of BMJ Publishing Group