Corporate Culture, Public Service and Democracy

Are governments fundamentally law makers using their legislative powers to shape the country’s social structures and balance the competing needs of the people or managers of an economy which is powered by the engine of entrepreneurship? That difference is very important to the delivery of public services and has been at the heart of the change from the Attlee government creation of the NHS and the Welfare State to our modern system of public management. But is this form of management the effective system it claims to be or has it compromised democracy and accountability as the corporate sector has been enabled by the changes to move closer to the decision-making centres of government?

The cumulative direction of policy decisions since the late 1970’s has created a substantial shift in the governance and management of the state sector. Instead of headlining the need for an expanded health and education sector to meet the growing needs of the population, for example, electoral and manifesto commitments have focused on the need for ‘economic discipline’ and ideas of consumerism and efficiency leading to lower deficits and debts. In our current times that translates directly into plans to shrink the state to fit notional macro-economic demands rather than to address the real needs of the population.

Key elements of this managerial state include the creation of autonomous agencies and devolving budgets and financial control. It has also involved the creation of ‘market competition’ in services which are monopoly or monopsony providers like the NHS and competition in the provision of the services themselves e.g. treating the private and public sectors as businesses on an equal footing and allowing them to bid for public contracts rather than planning their delivery through purely public systems.  This has meant not only an increasing emphasis on performance, outputs and customer orientation rather than population needs, but a rise of the management consultant as a necessary adjunct of government. Dealing with the private sector on large scale and complex tenders is not a skill of the public sector civil service. But to fulfill this function US consultancies such as McKinsey and Bain are used and they serve two clients: government and global corporations.

This matters because all governments for the last 40 years have followed this pattern and it compromises those who may wish to challenge the status quo. When Jeremy Corbyn faced Theresa May across the dispatch box in the first Prime minister’s questions after the general election, he should have owned the debate. In the back and forth that took place on the subject of the tragic loss of life of Grenfell Tower the question of accountability was inevitably raised.

Jeremy Corbyn set out his case along lines which attacked current government policy: 40% cuts to local authorities’ budgets, cuts and a pay cap strangling public sector jobs that have led to 11,000 fewer fire fighters which have disastrous consequences for us all. In short, as Corbyn summed up, ‘What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity.’ He went further to make demands on new regulations and the provision of resources to ensure that people are safe in their own homes.

There can be no disagreement that changes need to be made and a serious review of the legislation around fire safety is essential as a matter of priority.

But instead of attempting to defend her government’s agenda, Theresa May turned to her Right Honorable Friend and, with her characteristic smirk, informed him, the house and the country that the changes to legislation that removed the requirement to inspect a building on fire safety from the local fire authority – usually the fire brigade – to a responsible person were made by a Labour government; by Blair’s government.

12 years ago, Barroness Andrews, who presented the new legislation for Regulatory Reform (Fire Safety) Order 2005, announced the changes, ‘Business and government have agreed that that the law needed to be streamlined.’ She goes on to say, ‘[The Act] will, for example, remove the requirement for some businesses to obtain a fire certificate from the local fire and rescue authority.’ The laws that took effect in 2006 ended the practice of routine fire service inspections and passed responsibility to local councils. But it is in her assurance that business and government have agreed that we should look more closely.

It is this point, as Theresa May so carefully pointed out, that has been developing for decades and under governments of all colours – namely the outsourcing of public services to the private sector and the deregulation for the benefit of business and at the cost of accountability for the rest of us.

Perhaps most important of all is the ensuing democratic deficit. For all of Jeremy Corbyn’s impassioned demands for justice and for redress, he was ultimately unable to bring the government to account. Theresa May side-stepped any acknowledgment of guilt by passing the responsibility straight back across parliament. In fact, she left her political side-swipe til last thus ensuring that Jeremy Corbyn did not have the opportunity to respond. Such is the political game-playing of Prime Minister’s Questions. But what would he have said if he could have responded? There is no defense for his own party’s role in the degrading of the public sector.

New Labour made an art of blurring the lines between private and public ownership. It was Blair who introduced Academies into our Education system against the advice of many teachers’ unions who believed amongst other fears that the system would increase inequalities. They were shown to be right when the Academy Commission published its damning report in 2013. The report asserts that ‘all publicly funded schools should be placed within a common administrative and legal framework’, which sounds remarkably like a suggestion to return to the original publicly provided Education system.

Despite a growing body of evidence that Academies undermine equality and do not necessarily improve results for children, the policy has been accelerated. Lord Harris, a Conservative peer, has been handed acres of inner-city London land on which to build an ever-increasing number of his own brand of primary and secondary schools (41 at present) – none of which have to follow the national curriculum and all of which are built on land that was once publicly owned. Despite the evidence-based research that has concluded that the system is flawed and is unsustainable, the Conservative government appropriated Blair’s infatuation with privatising the public sector and pledged to convert all schools to Academies. But the chief architect of these policies under Labour was Lord Adonis who has just admitted to the catastrophic failure of tuition fees (another ‘politically diseased’ Labour policy).

It was Blair and Brown who were responsible for the expansion of rotten PFI deals which has diverted £billions of public sector revenues into the private sector. It was their introduction of the internal market that opened the door for global healthcare corporations stepping into our ‘national health service’ which is now wide open to the global marketplace as a result of the Coalition’s Health & Social Care Act.

Businesses have always stalked the halls of Westminster, not only as lobbyists but as advisors. McKinsey have advised governments on both sides of the Atlantic since the 1920’s. Harold Wilson’s government believed in the modernizing influence of such consultancies. His then Trade Minister Tony Benn, beloved Left-winger with national treasure status close to the adoration received by Corbyn today, welcomed McKinsey and Conservative Keith Joseph used them to help re-design the NHS in 1972, leading to McKinsey giving evidence to the Royal Commission at the end of the 70’s advising that the NHS was broken and that charges should be brought in. Fortunately at that stage their advice was not acted on.

New Labour’s era ushered management consultancies and business men right in to the heart of government and the writing of legislation. McKinsey wrote the Health and Social Care Act 2012 that has denationalised the NHS.

Price Waterhouse Coopers proudly claim to bethe leading advisor to the government and public sector’. But as the Public Accounts Committee said of PwC in 2015 they were responsible for ‘mass marketing tax avoidance schemes’ and their report (the second such in a matter of months) highlights the conflict between being advisor to two client groups with such competing interests. The PAC further said,

“The fact that PwC’s promotion of these schemes is permitted by its own code of conduct is clear evidence that Government needs to take a more active role in regulating the tax industry, as it evidently cannot be trusted to regulate itself. In particular, HM Revenue & Customs needs to do more to challenge the nature of the advice being given by accountancy firms to their clients, ensure that tax liabilities reflect the substance of where companies conduct their business, and introduce a new code of conduct for all tax advisers. Unless HMRC takes urgent action, this irresponsible activity will go unchecked, causing harm to both the public finances and the reputations of the companies involved.”

In such a role they cannot be other than an inappropriate influence on the public sector. Where profit is the primary force (as is necessarily the case in business) the values and social purpose of education, prison services, health can only come second.

After generations of private influence over public sector decisions, it will come as little surprise that the CEO of the cladding company who provided the flammable and toxic cladding to KCTMO, the tenant management organization for Grenfell Tower, is on the Building Regulations Advisory Committee (BRAC). Mark Allen is listed as Technical Director Saint-Gobain Delegation UK and Ireland on parliament’s website. The committee itself has been criticised by fire safety experts for being “heavily weighted towards the building industry” and has proved “difficult to engage with”

The reality is just as Theresa May said, both colours of government are responsible for the outsourcing of our public services to the private sector. It has been with cross-party agreement that red tape has been cut meaning a degrading of health and safety laws that are designed to prevent avoidable catastrophes such as the devastating fire at Grenfell.

As George Monbiot revealed, even while the fire at Grenfell blazed an organization called the Red Tape Initiative, chaired by Conservative MP Oliver Letwin, met to discuss ‘whether rules determining the fire resistance of cladding materials should be removed for the sake of construction industry profits.’ This initiative is a government-backed organization that includes several members from the neoliberal privately financed think tank Policy Exchange and it is largely dominated by industry alongside some representatives from NGOs and Trade Unions.

The Red Tape Initiative on the front page of its website states that, ‘Brexit presents many challenges for Britain and its businesses. But it also provides us with an opportunity to cut some of the bureaucracy that has impeded business and made lives more difficult. The Red Tape Initiative (RTI) will identify the most important, least controversial opportunities for cutting red tape in a post-Brexit world.’ Yet another example of business replacing genuine experts in the shaping of policy. In this case a self-serving group tearing up the fire safety standards in order to improve profits for industry.

At the end of the day until Corbyn starts talking about the damage, the cost, the degradation caused by the ushering in of the corporate sector into national and local government decision-making the change he promises will remain out of reach. Until we have a government that truly values the integrity of public services we will not be able to even start to restore the vital protections that a true public sector ensures. And until our public services are made public again there can be no democratic accountability. At the dispatch box on 28 June the dead of Grenfell Tower were nothing but a pawn in a political game of cat and mouse. The work of the opposition must include a clear program of creating a modern public sector within a cradle of public ownership, provision and accountability. The elephant in the room of direct corporate influence in Westminster and Whitehall cannot be avoided.

The Americanisation of the NHS, happening right here, right now

At approximately 2000 words this is a long read. It is designed to be read without needing to click through the links, but they will provide evidence and/or context to this blog, if you wish.

We all like human stories and in the NHS there are plenty, tales of everyday – and extraordinary – heroism by its dedicated staff alongside tragedies and failure of the system. There are the immediately understandable stories of privatisation, too, such as Virgin taking over children’s services.

But the structures and organisation of the NHS are rarely in the headlines. They lack the human element that catches our attention. After all, other than NHS managers, who is concerned as long as the NHS stays ‘free at the point of need’ as we are constantly told by politicians, think tanks and NHS leaders?

But it is in its structures and its organisation, not in its de-funding and outsourcing that the NHS is perhaps in gravest danger. This is a project long in the making and the ground has been prepared and developed by every government over at least the last 30 years.

The American health care industry and their representatives’ role is key to understanding what has happened, what is happening, and what is about to happen. This is nothing to do with Donald Trump and Theresa May and what trade agreement nightmares they may dream up in the future. This is here and now.

What are we talking about when we talk about the NHS?

The NHS is no longer a unified organisation as we tend to think of it. The NHS Confederation, a membership body,  describes itself as representing 560+ organisations from the statutory, voluntary and commercial sectors which comprise ‘the NHS’ and as the sole voice that speaks for them all.

All of them, regardless of which sector they come from, run as businesses and the contracts they hold are won in a competitive market. They operate under and hidden behind the NHS ‘logo’, now used as a kitemark for a myriad of services, some of them profit-making, rather than the name of a single organisation dedicated to the health of the public, as it used to be.

The business model and the ‘bottom line’ of their profit-and-loss accounts dominates their planning. As an example Salisbury NHS Foundation Trust’s Strategic Plan 2014-19 discusses their deteriorating market share and how they will address it with a market analysis of their competitors which includes other NHS Foundation Trusts and private sector hospitals.

This competition is most visible – and often most campaigned against – when clinical contracts or the running of hospitals is awarded to the private sector, Circle and Hinchingbrooke Hospital or Virgin’s many contracts totalling £1bn++.

But it is in the organisational structures that manage the competitive system that the most profound effects and costs are seen. Tendering exercises are long and costly and can even fail at great expense. The contract which was under negotiation in Stafford for cancer care could not be concluded, but still cost £840,000. Cohorts of lawyers, accountants, management consultants, estate agents and commissioners are needed to run a commercial system, each of which is itself a commercial profit making business. Meanwhile uncertainty about the future and long term planning pervades the service and instability grows.

This system is the antithesis of the ethos of the NHS. Designed as a co-operative and integrated publicly owned and delivered system which served health needs, not business constraints, the NHS delivered universal, comprehensive and accessible care with good outcomes at low cost. The market and private sector competition promoted as both efficient and cost saving has, in fact, reduced the ability to offer a full range of services and forced the closure of hospitals and GP practices as uneconomic to run. Funds which should be targeted on front line services are diverted into the profit streams for the companies running the system.

But this is commercialisation, not Americanisation. However, having altered the structure to more resemble the mixed private/public services across the rest of the world, with increasing numbers of contracts going to the private sector another new – and costly – reconfiguration of the NHS is taking place. This now fragmented and commercialised group of bodies is in the process of being drawn together into US style ‘Accountable Care’ systems (or organisations) which are being put on the international market as large scale contracts covering multiple services in one fell swoop.

United Health and the NHS and Accountable Care

UnitedHealth Group and its subsidiary, UnitedHealthcare Medicare & Retirement are the USA’s largest provider of Medicare Advantage plans. They deliver these plans through Accountable Care Organisations.

According to United Health’s website they currently “support the National Health Service by partnering with health commissioners to provide health data, intelligence and information, enabling more effective and timely decision-making in the areas of: risk stratification, integrated care solutions, commissioning support services, referral facilitation services and enhanced quality in the management and prescribing of medicines.”

They have other links with the NHS too. Simon Stevens spent 10 years working for United Health of America in some very prestigious posts, ending up as executive Vice President of the UH Group before he took up his NHS England role. United Health was an NHS primary care provider during Stevens’ previous tenure at the Department of Health.

Stevens’ aggressive role in increasing UH’s market share and profitability caused the Independent to ask if he really was the best person to be running the NHS.

United Health is one of NHS England’s favoured contractors on its ‘Lead Provider Framework’ organisations which supply commissioning support services to the NHS. The capture of backroom and advisory positions is an even more fundamental level of privatisation and of Americanisation than contracting out clinical services.

Introducing Accountable Care into the NHS

UK politicians’ love affair with the US system of healthcare started over 20 years ago ago with Kaiser Permanente – another US giant – being the favoured model to replace the NHS’ own publicly provided system with mixed private/public service. Jeremy Hunt referred to ACOs in his speech ‘Towards making healthcare more human centred and not system centred’  in 2015.

And he announced “the start of an international buddying programme. Five NHS trusts (…) will from this year be partnered with Virginia Mason in Seattle, perhaps the safest hospital in the world. But we will not stop there: if we want to be the best we must learn from the best – whether Kaiser Permanente in California, the Mayo Clinic, Alzira in Spain, Apollo in India or anyone else”

Virginia Mason’s ‘lean’ management system, based on Toyota’s car manufacturing, was criticised in the HSJ (Health Service Journal) and Dr Clive Peedell, co-founder of the National Health Action Party, produced a comparison between Virginia Mason’s own performance and his own Trust which cast a lot of doubt on the reasonableness of paying $13 million for its advice:

Accountable Care Organisations appeared in Simon Stevens’ 5 Year Forward View in October 2014. On 1 March this year, during a House of Commons Public Accounts Committee session, he announced the potential candidates for the first Accountable Care Systems, which are destined to end up as ACOs. Jim Mackey, NHS Improvement’s CEO, confirmed just a few days ago which organisations would definitely be going ahead.

The final list excluded Greater Manchester and Northumberland which had appeared on the original. In fact Greater Manchester had put its first Local Care Organisation out to international tender on the 14 March “to deliver sustainable, high quality, safe and affordable prevention, primary, community, secondary health and social care services, through a blend of direct and sub-contracted provision”, just two weeks after the initial announcement was made. The contract is worth £6bn over 10 years.

In the West Midlands the Dudley Clinical Commission Group, also not mentioned on Stevens’ list, put out a tender on June 9 – the day after the general election –  worth £5bn over 15 years for a Multispeciality Community Provider (MSCPs) another US import and part of the 5 Year Forward View.

The World Economic Forum driving the US model globally

Dudley CCG’s document entitled ‘New Care Model value proposition (VP)’ submitted to NHS England in February 2016  states that ‘a review of experience from the creation of Accountable Care Organisations in the United States (our bold) has fundamentally influenced our approach to evaluation’. They go on to say ‘as our 2015/16 VP showed, we articulated the value of our programme using a similar framework to that used by Bain & Co to guide this submission.” So a clear statement that the US model was the influence and the framework was from one of the ‘Big 3’ US global management consultancies.

Bain & Co describe themselves as the leading consulting partner to the private equity industry and its key stakeholders and as a strategic partner and active member of the World Economic Forum.

Simon Stevens is also a participant in the World Economic Forum. The following is an extract from the WEF press release on 27 April at this year’s meeting:

New York — A diverse group of leading stakeholders in the $7.6 trillion global healthcare sector are calling for a major overhaul of healthcare systems, designed to deliver improved patient outcomes at lower cost. The proposal hinges on “value-based healthcare”, a patient-centric system that focuses on outcomes that matter to patients across the care spectrum. The recommendations are presented in a new World Economic Forum report, Value in Healthcare: Laying the Foundation for Health-System Transformation, released today in collaboration with Boston Consulting Group, and to be implemented in four pilot locations, starting in Atlanta (USA) this year. (…)

It is the first time that such a diverse group of leaders have aligned on a system-level approach to healthcare reform.”

The companies which formed this ‘diverse’ group are almost all suppliers to the NHS and are US global companies with the exception of Takeda which is Japanese global. Simon Stevens is also a contributor in his role as CEO of NHS England.

Medtronic has a long term contract with the NHS

Novartis Pharmaceuticals is an NHS partner

Kaiser Permanente

Qualcomm Life has access to clinical data for its apps for the NHS

Takeda Pharmaceutical is a supplier to the NHS

These companies are putting forward a joint redesign programme for health care in partnership with the CEO of the NHS but which is not at all about promoting the NHS’s unique brand of comprehensive, universal, accessible, high quality care, available according to need not ability to pay. Instead it is promoting the US model – which is being rapidly, and currently, imported to replace the NHS.

The US system of healthcare is not designed on the same principles as the NHS. It is one of the most costly and inefficient health systems in the world, denying or restricting care to many of its citizens.  The global corporations influencing this move and embedded in the redesign do not share the principles of the NHS: they are seeking a profit-share from public funds. The unvarnished truth is that there are riches in public services if they can be turned away from their principle purpose to serve the public. Within certain constraints the government cannot allow services to fail completely, so risks are low and the potential gains are high for the private sector.

The Health and Social Care Act of 2012 de-nationalised the NHS. By 2020 the American model will be embedded. The most efficient and effective healthcare is a national health service that is publicly owned, provided, delivered and accountable. Private companies by their nature are not as accountable, by their nature they must have profit as a priority. Public ownership means oversight, real accountability and care. Profit is not a factor. There has been over 30 years of collusion on this agenda from all our main political parties. It is time to reverse the trend of destruction and move forward to a modern, first class public service.