Don’t pop the champagne yet: why leaked Downing Street proposals won’t ‘rein in’ the private sector in the NHS

There’s been some furore and debate created by a Guardian article on 25 September “NHS privatisation to be reined in under secret plan to reform care”, though it must be odds-on for the most misleading headline of the week. It wasn’t secret – Matt Hancock has previously announced he was preparing a new bill and NHS England has had its proposals not only out to consultation but also examined by the Health & Care Select Committee – and it isn’t ‘reining in’ privatisation. 
We’ve been told talking about legislation is almost guaranteed to put all but the hardiest to sleep! But this is important, especially if you are a campaigner, or have any influence in your union or other organisation which might decide to put their weight in favour of these changes (as some have already).


“A twin-pronged attempt to severely restrict future privatisation would involve scrapping Section 75 of the Health and Social Care Act 2012 and removing the commissioning of healthcare services from the remit of the Public Contracts Regulations 2015”

When the Act was passing through all its parliamentary processes, there was a specific campaign to keep Section 75, ‘the competition clause’, out of it (even when it was clear the rest would pass) and the campaign for its repeal carried on afterwards.

The original rationale for the campaign was that the clause was seen as forcing contracts to go out to tender, ‘compulsory competitive tendering’, rather than being automatically awarded to NHS bodies, which risked a rapid increase in private sector contracts.

(Of course, the real issue behind this is about contracts going out to tender at all. If we truly had a public sector NHS there would be no contracts.)

Although the guidance given by the NHS regulator, Monitor was that, competition should be employed where it serves the interests of patients, and is not an end in itself. The regulations do not impose competition on the NHS. No one will be forced to put services out to competitive tender and there are circumstances in which there might only be one capable provider of care’,  the clause nonetheless created both a chilling effect on commissioners who didn’t want to fall foul of the rules (allowing Virgin to sue the NHS when it didn’t get a contract it wanted) and encouragement for pro-privatisation commissioners. And, despite denial from the government that there has been any real rise in privatisation (or that the contracts can be considered privatisation), the campaigners were right.

The objective of repealing Section 75 achieved slightly mythical status in the process, as if its repeal alone would be good. So, at first sight this appears to be something which might be expected to gladden campaigners’ hearts – and the Guardian’s headline plays to that.

But before planning to crack open the champagne, there are three important things to be aware of:

Privatisation is embedded in the Act. Anyone who was intent on removing privatisation would have to change a great deal more than a few sections as well as various bits of related non-NHS legislation;
the whole of NHS legislation since 1990 (and according to our legal friends, possibly even a bit before that) contains elements of privatisation, ‘choice’ (which in this context means privatisation) and marketisation;
• there’s been a lot of water under the bridge since the Act came into force and the removal of Section 75 – especially in the context of legislation to create ‘Integrated Care’- removes regulation and oversight from all the private companies that are already in the NHS rather than stopping any more coming in.

Far from a straightforward repeal of Section 75 being something to celebrate as a small step towards ending privatisation, it’s a calculated move towards creating ‘free market’ health care.


Governance is about accountability and doing things openly, fairly, according to a proper set of rules, and agreeing who is responsible for what. You can’t hold any organisation providing public services, be they the government, a public, private or voluntary body, to account if you haven’t got that. Until (or, sadly, unless) the private sector is removed from the NHS it must be under strict regulations, otherwise there is a risk of contracts going to private companies without public oversight: jobs for the boys.

The potential for conflict of interest is huge; also, existing contracts could be extended without re-tendering, making it even harder for any future government to end them. The only thing worse than the private sector replacing public services is the prospect of a deregulated private sector.

With Boris Johnson installed at No 10 Downing Street with a full complement of ‘small government’ free market proponents in the Cabinet, who have already proposed a massive new roll-out of Free Schools, it is even more unlikely that there will be a reversal of privatisation in the NHS.

In fact it would be an ideological U-turn of immense proportions to imagine that one of his first legislative moves will be to roll back privatisation in the NHS: especially if, as his sister alleges, the Prime Minister’s programme is backed by disaster capitalists.

On the contrary, we are likely to see in Johnson’s first Queen’s Speech, the completion of a 30 year project to remodel the NHS into Integrated Care Systems on the lines of Kaiser Permanente’s Medicare in the US.

The Prime Minister has already said that Simon Stevens, the CEO of NHS England, had once helped him get elected president of the Oxford Union as a student , and together they would “sort things out”. Stevens – rather than the Department of Health – is the prime mover in the development of new legislation. It may be that readers will have become so inured to the upending of democratic process that this passes without remark. But this is a serious undermining of due process and it does matter.

When McKinsey co-wrote the Health & Social Care Act with their private clients in mind  it caused a legitimate stir, but it may be less obvious that NHS England assuming the right to take the lead on legislative change is also highly problematic. But when Simon Stevens was presenting an advance indication of the intentions of his Next Steps on the NHS 5 Year Forward View to the House of Commons Public Accounts Committee on 27 February 2017 he said:

We are going to formally appoint leads to the 44 STPs. We are going to give them a range of governance rights over the organisations that are within their geographical areas, including the ability to marshal the forces of the CCGs and the local NHS England staff. We will probably get about 6-10 of them going as accountable care organisations or systems. … We will nevertheless, within the letter of the law, act according to the spirit of what I have just described and push as hard as we can without parliament itself having to legislate. If at some point down the line you choose to do so, that will no doubt be a welcome recognition of where the health service will have moved to in the meantime.”

Compare that process with what should have been:  green papers, white papers, primary legislation, statutory instruments, formal public consultation, policy guidance. Despite the insertion of ‘within the letter of the law’, Stevens was saying that he was going ahead anyway with the changes and that parliament can catch up later. The Conservatives acknowledged that these changes would be necessary in their 2017 manifesto. In other words a done deal.

Alarm bells should ring when a service CEO can fundamentally reshape a public service with an open acknowledgement that there isn’t the law to allow him to do it. The things that are being done are not minor: either changing or ignoring elements of the Act or creating new bodies which don’t exist in any legislation.

And key to that issue of ‘where the health service will have moved to in the meantime’ is the creation of collaborative bodies – which may be joint private companies or Special Purpose Vehicles – to run Integrated Care Provider organisations. That’s why the removal of Section 75 at this juncture should be treated with extreme caution. Lifting the clause and all the regulations associated with it serve a dual function: ‘freeing’ the market and enabling the creation of the provider ‘collaboratives’ that form the ICPs.


On this issue there were submissions to the Health & Social Care’s Select Committee Inquiry into the new legislative proposals.

In a written submission, Dr Albert Sanchez-Graells, a specialist in European economic law, with a focus on competition law and procurement wrote, “The legislative proposals to support the implementation of the NHS Long-term Plan limit themselves to the de-regulation of the ‘NHS internal market’, without formulating an alternative governance architecture.

He concludes If changes are sought, these should be underpinned by either a complete abandonment of the ‘NHS internal market’ through a proper and full suppression of the purchaser-provider split, or an improvement of the existing mechanisms for the governance of this (quasi) market. A strategy that is solely de-regulatory such as that underpinning the NHS Long-term Plan should be opposed by the House of Commons Health and Social Care Select Committee.”

Andrew Taylor, former Director of the Co-operation and Competition Panel for NHS-funded services said when giving evidence:
There will still be a lot of private sector participation in the NHS. I do not think anyone has realistically talked about removing the private sector from the NHS, because of the reliance on it to deliver a significant amount of services. The current rules provide a Government structure for those markets. In effect, the proposals deregulate NHS markets. They do not remove markets from the NHS; they just deregulate them and remove those governance structures. My concern is that ungoverned markets will no longer necessarily deliver the best outcomes for people, so these proposals have to be treated with a degree of caution.

The Committee’s report on its inquiry gives a nod to these concerns. In the section on the Competition and Markets Authority it states: ‘We heard concerns that NHS England and NHS Improvement’s proposals risk deregulating, rather than de-marketising, the NHS without creating an alternative regulatory mechanism. In its response to this report, we request that the Government set out its assessment of the likelihood that the proposed legislation would have the effect of deregulating competition in the NHS and how it intends to ensure patients and taxpayers are protected from any adverse unintended consequences.

Where is the evidence that any such protections are being considered – or whether the consequences are really ‘unintended’? Of course, that will not be clarified until any draft legislation is actually published, but the indicators to date are not reassuring.

Despite the Health & Social Care Act being characterised as ‘a top down reorganisation so big you could see it from outer space’ as if it was a one-off, the reality for the health service has been a non-stop top-down reorganisation under Stevens’ direction since he published the 5 Year Forward View in October 2014: a fact recognised in his own words when he say the government legislation would be ‘a welcome recognition of where the health service will have moved to in the meantime’. 

There are many milestones on the long road from Bevan’s NHS to a Medicare-style health service. This is a major one – and there’s no reining in of privatisation in sight.


Please follow We Own It’s campaign to bring the NHS back into public ownership here
999 Call for the NHS have more on this subject and a campaign here
The NHS (Reinstatement) Bill remains the flagship for returning the NHS to full public ownership #NHSBillNow

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