Selling by stealth

Written By: Michael Thorne
Published: August 2, 2017 Last modified: August 2, 2017

For the third time since 2010, the government is planning to sell off NHS Professionals, the NHS in-house temporary staffing agency. This is the latest in a long series of gradual and covert moves to privatise our NHS. The obscurity is no surprise as 84% of us want a publicly owned NHS. Those who want to place it in private hands know they can’t do so transparently.

Plans for the sale in 2010 and 2014 were shelved. This time, the schedule has been disrupted by the election, and now Labour MP Eleanor Smith has tabled an Early Day Motion calling on the government to halt the sell-off. It is co sponsored by SNP health spokeswoman Dr Philippa Whitford MP and Green Party co-leader Caroline Lucas MP.

NHS Professionals was set up in 2001 as a response to the unsustainable costs of recruiting temporary healthcare staff through private agencies. It consists of a bank of 88,000 healthcare professionals and is used by around 60 out of 250 NHS Trusts. The organisation saves the NHS £70 million per year and turned a profit of £6.4 million in 2015-16. It is currently owned entirely by the Department of Health, but the government plans to sell 74.9% of it to the highest bidder.

Despite the success of NHS Professionals, agency staffing poses a significant financial problem for the NHS. The costs of agency staff have have risen each year from 2011 to 2015-16, in which they reached £3.64 billion – £1.4 billion over budget.

Unsurprisingly, a large chunk of this ends up as profit for recruitment agencies, and is not reinvested in the NHS. In 2016, between £300 and £600 million went into the pockets of agencies. While hospitals struggle to function, the heads of recruitment agencies earn salaries of almost £1 million a year.

In October 2015 efforts were made to curb extortionate recruitment charges. This is reported to have saved the NHS £300 million in six months, but some trusts have struggled to fill vacancies since the imposition of the caps on charges. Yet even after controls were introduced, there were reports of recruitment agencies taking a commission as high as 49%.

The staffing problems facing the NHS look set to continue, not least given the net loss of nurses reported earlier this year. But the solution is not to hand NHS Professionals over to private control, which would effectively turn it into the kind of organisation it was meant to allow the NHS to avoid.

Privatisation drives up costs. The millions funnelled to recruitment agencies’ share­holders could be reinvested in the NHS under a publicly owned system. The additional bureaucratic costs of running the NHS as a market are also astronomical, estimated to be at least £5bn-£10bn a year.
Privatisation has also led to lower standards of healthcare, with services out­sourced to companies which have repeatedly failed to provide adequate treatment for patients. The handing over of Nottingham’s dermatology centre to Circle – who won NHS contracts worth nearly £1.5 billion in 2014 – left it on the brink of collapse in 2015. And in 2013, it emerged Serco had been tampering with data and was forced to pull out of a contract to run out-of-hours GP services in Cornwall. A 2014 inquiry led by Debbie Abrahams MP also found evidence on an international scale that privatisation reduces quality of healthcare.

Privatisation damages accountability, too. The ‘Clinical Commissioning Groups’ estab­lished by the Health and Social Care Act in 2012 frequently outsource work, and outsourcing companies can avoid disclosing information by appealing to “commercial confidentiality” rules.

The government has already spent £2 million arranging the sale, half of which went to the consultancy giant Deloitte. The recruitment agency Staffline is one known bidder, others remain undisclosed. Ultimately, though, we know who is responsible: Jeremy Hunt, the Health Secretary; Philip Dunne, Minister of State for Health; and Ben Masterson, Head of Companies Management.

These are the actors which a We Own It campaign will target. A petition to stop the sale has already reached 15,000 signatures. Given the Tories’ weakened mandate, public outrage, and action in Parliament, could yet force the government to abandon the sale.

Michael Thorne writes for the anti-privatis­ation campaign We Own It ( uk). His article is printed under a Creative Commons 4.0 licence courtesy OpenDemocracy