NHS Update March 2018


This is our first monthly update. We give an overview of current issues in health and social care and how they relate to the wider health policy landscape. We hope that you will share our updates on social media and with other networks. All we ask is that you always include the authorship as Public Matters with a link to this site.

The context for all these updates will always be:

  1. Current issues are part of a sequence of policy changes which have taken place over the last 30-40 years. This is not a simple case of the current government underfunding the NHS.
  2. The policy landscape around the NHS has altered over this time from being based on a government responsibility to provide services to the government as ‘single payer’ for a combination of public, private and voluntary sector providers. This matches Tony Blair’s desire to see the NHS as a kite mark and a funding stream.
  3. During this period, the public-sector ethos has been replaced by private sector metrics and a belief that only competition and financial incentive motivate people to work effectively and efficiently.
  4. This combination has created the space for the private sector’s representation both as lobbyists and as active contributors in the form of management consultancies to take an influential role in policy decisions and legislation.
  5. The visible consequences of these policies have been a shrinking of the NHS which has resulted in a greater market space for the private sector both as ‘NHS providers’ and outside the NHS. It is also in the process of changing the nature of the NHS itself into a second-class service for those who can’t afford to pay.

We believe that this has been a retrograde step in the provision of public services.

The NHS is more than just a structure for the delivery of healthcare. It is a social institution that reflects national solidarity, expresses the values of equity and universalism and ensures the duty of government to care for all, no matter how rich, no matter how poor. The experience of the last 70 years has demonstrated that when commerce and the market have been kept outside of the NHS, its costs have been relatively low when compared with other developed countries. The more the market encroaches on those services, the higher the cost – which bears out Bevan’s original concept.

Modern public policy should be developed to reflect both the values and ethos that drove the creation of the NHS and with an understanding that this is fundamentally a more cost-effective and efficient way of delivering this service.


Mental Health is not given the priority that it needs regardless of promises from all parties to give it parity of esteem with physical health.

All mental health patients, regardless of age, risk being sent long distances from home for in-patient treatment. The majority of locked rehabilitation centres are provided by the private sector.

The Care Quality Commission (CQC) issued a report on mental health on the 1 March:

  • Placements in the private sector were nearly twice as long as similar placements in the NHS.
  • More than three times as far away and twice as expensive.
  • Managers at private providers were half as likely as NHS providers to know who was going to be responsible for after-care after discharge.
  • The CQC recommended that every CCG should provide specialist rehabilitation facilities. NHS England has responded by saying that it is implausible for them to do so.

Sustainability and Transformation Plans (STPs), currently under review in the Health Select Committee inquiry, are notable for their lack of detailed information about how they will deal with mental health services.

NHS provided rehabilitation services have been cut from 130 in 2009 to 82 in 2015.

The private sector has been the direct beneficiary of this loss. In January 2016 The Priory Group was sold for £1.3billion by the US Private Equity Firm Advent International to Acadia Healthcare of Tennessee. Below is an extract from Channel 4’s Dispatches programme in which a senior figure at Acadia Healthcare is explicit about the business opportunities offered by the NHS’ loss.

“What we would look forward to, or hope does occur, is that the NHS continue to close beds and have a need to outsource those patients to the private providers. We think that, or are optimistic, if the NHS closes more beds and outsources those, we would be the big winner there.”

There have been calls in recent years for The Priory to lose its NHS contracts after episodes of unacceptably poor care. In one case a 17-year-old girl committed suicide. The coroner who ruled on the case said her anxiety had been exacerbated by her unacceptably prolonged stay at The Priory one hundred miles from her home in Scunthorpe. https://www.theguardian.com/society/2016/jun/04/child-deaths-priory-hospitals-cancel-nhs-contract


Wider issues around the NHS include the sale of property, the One Public Estate and devolution. These policies are shrinking the amount of publicly owned land in the name of providing cash to ‘pump prime’ transformation. NHS matters must be considered in relation to devolution. Below we consider the situation in London, but it applies throughout the country.

The Mayor of London is holding a consultation on the London Plan, his statement of priorities for London during his term of office and beyond. The London Assembly has new responsibilities for health and social care, devolution and the STPs. It is a matter of some concern that the London Plan incorporates the Devolution Team’s November 2017 recommendations in Health and Care Devolution: what it means for London.

The 5 Year Forward View (5YFV) and the Naylor Review are based specifically on the reduction of the number of sites from which the NHS operates: fewer GP family practices, closure and downgrading of hospitals, centralisation of services. This has the following implications for the London Plan;

  • A reduction in the number of sites will mean further distances to travel. This means access for those with severe illness and disability may be reduced and travel becomes a health cost. Unwell people are unlikely to walk or cycle longer distances.
  • The NHS is one of the largest employers in the country. A reduction in the number of facilities it operates from means concentrating staff into fewer sites which runs counter to the Plan’s aim of increasing employment opportunities in more areas.
  • The Plan seems to accept the NHS estate disposal proposals without question. But ‘surplus’ NHS estate is being created by the closure of working services, not by re-appraising unused or derelict land. How will London cope with an increased population if the planned housing density increases are in part based on the land which should be providing its essential health services? Where will the health services of the future be built?
  • The Plan describes consideration of community as central to housing development but hospitals and GP services form part of the spatial awareness and sense of place of communities – a fact which is borne out by the fierce level of campaigning surrounding hospital downgrades and closures.

An Independent Inquiry into the NHS plans was held in NW London in 2015 headed by Michael Mansfield QC. Its key findings were:

  • Cutbacks are being targeted on the most deprived communities.
  • The public consultation was inadequate and flawed.
  • There is no business plan to show the reconfiguration is affordable or deliverable.
  • NHS facilities have been closed without adequate alternative provision being put in place.
  • The plans seriously underestimate the increasing size of the population in NW London and fail to address the increasing need for services.

The Mayor should address the issues implicit within the NHS plan for both its feasibility and its impact on the Plans’ wider objectives of access to services before committing to large scale use of public land, especially NHS land, on the One Public Estate model.

Participants in devolution must understand the longer-term consequences of the NHS sell-off. It may present itself as a solution to the provision of new housing but local authorities will be left with the fall-out of the lack of healthcare in the future.


Health and Social Care ‘integration’

In oral evidence before the Health Select Committee (HSC) on 27 February, Dr Colin Hutchinson, Chair of Doctors 4 NHS, raised the problem of blurring the boundaries between health and social care in the integrated care process. His worry focussed on the means-tested nature of social care and whether more NHS care provided at home ran the risk of it being not paid for or re-categorised as social care.

Eligibility for continuing healthcare is a matter of law set out in the Care Act 2014. Neither NHS England nor individual Clinical Commissioning Groups (CCGs) have discretion over the policy. But the latest data from NHS England has shown that there is a great deal of variation across England in who is actually being approved for receiving this care. NHS England wants the CCGS to save £855million over four years from the Continuing Healthcare Fund. Analysis discovered that some CCGs would only approve those who are terminally ill even though the continuing healthcare budget is intended for all adults who are assessed as having a primary care need. A Public Accounts Committee report from January casts doubt on NHS England being able to achieve its projected savings targets ‘without either increasing the threshold of those assessed as eligible, or by limiting the care packages available’. Dr Hutchinson’s predictions appear to be substantiated and that implies a risk to patient safety.

There is a real problem that needs to be addressed: what are people talking about when they talk about ‘the NHS’? There is a tendency to treat the NHS as an identifiable entity with a shared set of assumptions about its form and purpose. However, the STP process and the privatisation process have both cast serious doubt on whether those assumptions still hold true.

NHS Subsidiary Companies (SubCo)

The creation of subsidiary companies by NHS Trusts supposedly in order to avoid VAT is part of a growing development of privatisation of non-clinical services. Unison has launched a campaign to oppose these companies but they are a little late as many Foundation Trusts have been sub-contracting to themselves in this way since the 2012 Health and Social Care Act became operational in April 2013.

The VAT loophole appears to be just an excuse for setting up Subsidiary Companies. There are specific VAT exemptions for private companies providing pharmaceutical services which don’t apply to the NHS. This is why as a money-saving exercise so many hospital pharmacies are now provided by private companies (eg Sainsbury’s and Boots). But Northumbria Trust has said there are no VAT benefits at all from its SubCo.

Some Trusts have created private companies to run non-clinical services and some clinical services. Although NHS staff transferred to the SubCos will have their salaries and T&Cs TUPE’d, Trust boards have been clear that new staff will not be employed at NHS rates. This is how they intend to achieve their savings. The nature of the companies allows for a future sale to the private sector.

Privatisation is often talked about as if it only applies to clinical contracts. This separates clinical provision from the rest of the NHS and allows a vast privatised field of activity to be created whilst allowing its supporters to declare that accusations of ‘privatisation in the NHS’ are greatly exaggerated and scare-mongering.

Caroline Molloy in Open Democracy has also written about Subsidiary Companies. 


Gareth Snell’s 10-minute rule bill, Local Health Scrutiny, is a welcome addition to the debate about accountability in the NHS and the principle can be extended more generally to accountability in public office. Whilst the parties are divided along ideological lines about public service there should be no question about the responsibilities of bodies with statutory duties. The scrutiny committees who hold them to account must have powers to make meaningful changes or put processes on pause while full scrutiny is completed.

The Five Year Forward View and subsequent STPs with their hospital closures and downgrades would not have proceeded at the scale and pace that they have if there had been meaningful ways to halt their progress. However, across the country campaign groups and legal challenges have fallen on the basis that the changes they were opposing have already been embedded and that a fait accompli cannot easily be undone. The scrutiny and the challenge must be made by officials at planning stage not at implementation stage. It is an abnegation of responsibility and leaves accountability devoid of meaning if it is left to the general public.

Reinforcing the powers of scrutiny committees should be adopted as policy – not just for the NHS – to ensure that accountability in public services has ‘teeth’.

The theme of accountability was also present in the HSC’s oral evidence sessions for their Inquiry into Integrated Care: organisations, partnerships and systems. In their questioning they presented the setting up of integrated care systems and partnerships as a possible “workaround” of the 2012 Health & Social Care Act.  Rosie Cooper MP found this a troubling concept.

She said “Everybody is using the word “workaround,” but actually it means getting around the rules and we are all complicit in the fact that we are saying we are not sticking to the rules—we are going to get round them. I have a fundamental problem with that because I think the big gap here is the word “trust.” […..] Does the end justify the means?”

Allyson Pollock, witness, replied, “I am afraid that it does not, because everything follows from the law. If you are finding that everything is as chaotic and untrustworthy as you say, then we need the primary legislation to end the internal market, to re-establish area-based bodies, which continue their needs assessment”.

The issue in question here is not a minor point. Accountability follows directly from the law. If there is no clear law then there is no accountability. Rosie Cooper is right to be troubled by it.


One of the immediate outcomes of the issues discussed in this briefing is that areas which were already working towards creating ACOs on the 1 April 2018 have now had to return to their existing agreements in order to extend or amend them.

In the Cabinet Minutes of Northumberland County Council, report of the Chief Executive of 3 March Item 4.5 it says: ‘Because of the relatively high cost of CHC (Continuing Healthcare) in Northumberland, NHS England have recently carried out a review of the arrangements in this area. Oral feedback suggests that they are likely to recommend some improvements to the details of the processes being followed, and that they may suggest to the CCG that its approach to determining eligibility should be revised’.

This illustrates Dr Hutchinson’s point from the HSC about the danger of blurring the edges between the NHS provision and social care provision, as the merger between health and social care is likely to mean that anything removed from NHS eligibility will be picked up by the means-tested social care side. It also reflects Rosie Cooper’s concerns about workarounds as there is no legislation allowing NHS England the powers to change these eligibility criteria.