she was The Health Service even Thatcher
NDER Brown's original plans, Labour's term of office was set to replicate the levels of increase achieved under the Tories. But the squeeze was taking its toll. Health workers and patients had to endure a winter crisis, in which neither the relatively mild weather nor the
STO couldn't kill largely routine level of flu and viruses could explain away the dire shortage of beds to treat emergency medical admissions. The right wing press had a field day, pressing for increased reliance on private
BRITAIN'S National Health Service (NHS) has been the main medical insurance. Blair's team were beneficiary of Chancellor Gordon Brown's Budget in March, with aware of the dangers of allowing this to an extra £2 billion allocated in the new financial year - the first happen again next winter, in what may be step in a 4-year plan to raise health spending towards the the run-up to the next general election. The
European average, from around 6.9% in 1999/2000 to 7.6% in
NHS has remained voters' number one preoccupation - even in the coming elections for London Mayor. Something had to
Clearly £2 billion above inflation each year for another three years is a very substantial something. No campaigners had asked for more. The key issue now is how the money is to be spent: in fact only
£600m of the new money has been made available immediately. The remaining £1.4 billion will be held back at national level, requiring health authorities and Trusts to
"bid" for funding for specified projects in the summer.
A chill in the heart
Tony Blair's pledge to take personal
"modernisation"
process charge of a new in the NHS will strike a chill into the hearts of many health workers. The last thing the
NHS needs now is a new proliferation of
"task forces", targets and hit-squads to add to the plethora of management talking shops that have been launched at local and national level since 1997. These "New
Labour" strings could yet undermine an apparent reversion to old Labour values.
Until now, it appeared that the NHS had witnessed an almost seamless transition from the old Tory government to New
Labour. Blair's team had stuck cravenly to the NHS cash limits laid down by their
Tory predecessors.
The whole shape of the NHS still follows the contours created by the Tory government's market-style reforms of 1991.
"purchaser/provider
The controversial split", introduced against Labour's (half- hearted) opposition, has been retained along with even more fragmentation of services and competition for scarce
2003/4. JOHN LISTER*
The reason for this continuity is clear: until it became politically impossible for them to sustain the position, Blair's government had shared the most central of the three objectives which motivated Tory policy on the NHS. The overriding concern has been to cap - and if possible reduce -government spending on the NHS, which in the UK remains a service largely free at point of use, and funded predominantly from taxation. One of the very first actions of the Thatcher government was to give legal teeth to the Labour policy of imposing rigid cash limits on local health authorities, compelling them to prioritise balancing the books over patient care.
### Tightened control
A second concern, again echoed by Labour's leadership, has been to tighten the level of central control over how NHS resources are employed, while pretending to hand over greater powers at local level. This combination of policies means that ministers can claim to have no direct say over controversial hospital cuts and closures, and no responsibility for electorally embarrassing, high profile failures of the system - while still exerting maximum pressure on local managers to achieve government performance targets. Labour has taken on and further modified this system, with potentially unpredictable results.
Of course Thatcher's Tories also had other ambitions for the "reform" of the NHS - ambitions which are possibly even too reactionary for the most avid "modernising" Labour ministers in Blair's team. They wanted to maximise the involvement of the private sector, with an expansion of private beds in NHS hospitals, private hospitals and private medical insurance -but also to find new ways in which private firms of all sorts could make money through selling services to the NHS.
### Tory zeal
New Labour has no ideological objection to the involvement of the private sector in welfare services: but they do not appear to share the Tory zeal for pay beds and piecemeal privatisation in the NHS. They realise that such a policy offers no benefits and would be an electoral liability. Some right wing Tories want increased privatisation of the health care system itself, beginning with the introduction of charges for visiting a family doctor or for hospital treatment. However even Margaret Thatcher realised that such changes would be massively unpopular, and her reforms fell far short of the schemes of her right wing colleagues.
The first years of the Thatcher government represented a phoney peace for the NHS. The Tories upheld the increasing NHS budget allocations pencilled in by the outgoing Labour government - although much of this extra money was swallowed up by inflation. The key change came in 1982, which was dominated by a long-running campaign of industrial action over NHS pay, which had fallen well below International Viewpoint #320 April 2000 11
national average increases. The Tories, in a and patient care.
* Great Britain deliberate trial of strength, singled out health workers for a further real terms pay cut: with inflation running at 12% they offered NHS staff an increase of just 4%. Industrial action began in the spring of 1982 and, reluctantly led by timid union officials, dragged on through the summer and into the autumn with sporadic one-day strikes. The TUC day of action on NHS pay on September 22, 1982 turned out to be effectively a one-day general strike and 150,000 people marched through central
But with an obdurate government and a hesitant TUC leadership, the campaign finally wound up in December 1982 with nothing gained by those that fought the hardest. Ancillary staff faced the added insult of seeing an extra government hand-out to the nurses who, in the main, had taken no action. Nurses were also given a 'pay review body' similar to that of the doctors, a move that has successfully separated their wage demands from other sec-
Thinking the unthinkable
This defeat was the equivalent for the British health unions of what was to befall the miners in their year-long strike: it set back the development of militant opposition, and gave the government the political confidence to contemplate what would previously have been unthinkable policies.
Early in 1983 the government issued a circular instructing health authorities to commence competitive tendering for hospital domestic, catering and laundry services, with a marked bias towards the private sector. New firms of private contractors sprang up, some of them subsidiaries of major corporations, specifically targeting this new, potentially lucrative market.
The consequences for NHS support staff were predictable. In what were already low-wage, labour-intensive jobs, the only way private firms could hope significantly to undercut the cost of the existing NHS service was by slashing the numbers of staff (thus undermining the quality of service), attacking the wages and conditions of staff (and risking major problems of recruitment and retention), or simply cutting corners on the work that was done.
Most private tenders incorporated a combination of all three: privatisation of services was often swiftly followed by a catastrophic drop in standards of hygiene 12 International Viewpoint #320 April 2000
But to compete with private bids, in-house tenders, too, began to be based on fewer staff on poorer conditions. In the spring of 1984 women cleaners at Barking Hospital walked out on strike against drastic cuts in pay and hours of work imposed by their private employer -they stayed out for 18 months before conceding defeat. There were to be other courageous shows of resistance - with several more long strikes- but few victories. Only in two places were privatisation attempts beaten back by union resistance.
Nonetheless, many sceptical health bosses were reluctant to privatise. The firms, too, were disillusioned: by 1988 a number of contractors had pulled out of tendering for NS domestic service contracts, and one finance director complained that "There is nobody making any money out of the National Health Service."
Due to competitive tendering, the number of directly-employed ancillary staff fell by a massive 50% between 1981 and 1991. This also struck a heavy blow at the health unions. In recent years the competition for contracts has given way to monopoly, with only the largest firms surviving and expanding through takeover bids or mergers, while the smaller, weaker firms went
End to consensus
While ancillary staff numbers went into sharp decline, there was a big increase in numbers of top managers. Roy Griffiths, managing director of the Sainsbury's supermarket chain, brought in to conduct an informal inquiry into the structure of NHS management, proposed that "business-style" managers should replace the old-style administrators: traditional "consensus" management should end. Top doctors should be pulled into line by making them responsible for department budgets.
This began the creation of a new layer of chief executives, directly answerable to the government. Numbers of administrative and clerical staff in the NHS rose by 18% between 1981 and 1991. It also began the upward spiral of senior management pay in the NHS
Margaret Thatcher had gone out of her way to insist at the 1982 Tory party conference on her credentials as a defender of the NHS: "Let me make one thing absolutely clear. The National Health Service is safe with us." But many Tories wanted an expansion of private medicine (the 1983 manifesto "welcomed" the growth in private health insurance).
The 1980 Health Services Act cut restrictions on private hospital development and disbanded the Board which the Labour government had set up to close down private beds ("pay beds") in NHS hospitals. By 1985, pay bed numbers had risen by 23% - though the numbers of patients using them had dropped by 22%, leaving a typical occupancy rate of 4050%.
### Costly irrelevance
These beds were a costly irrelevance for the NHS. NHS hospitals were forbidden to make a profit on their pay-beds, and while private hospitals already itemised treatment and services received, charging therapy, comparable NHS guideline charges were imprecise - and incredibly cheap.
The biggest area of privatisation, which effectively excluded hundreds of thousands of vulnerable patients from NHS care, was in continuing care of the elderly. The 1980 Social Security Act gave social security offices powers to pay fees for (private) residential or nursing home care for elderly patients from the social security budget, and this was strengthened in 1982. For the frail elderly, continuing care through the NHS, free at the point of use and funded from taxation was rapidly disappearing. Private nursing and residential homes boomed, offering an attractive proposition for investors. By 1993, 281,000 people were receiving statefunded care in private homes, at a cost of £2.575 billion. Alarmed at the cost, the Tories called Roy Griffiths back again to conduct an inquiry.
His 1988 report proposed what amounted to the consolidation of privatisation and an expansion of means-testing. It called for the transfer of responsibility for continuing care of the elderly from the NHS (where it was still provided free of charge at time of use) to local government (where it would be subject to means-tested charges). The privatisation was formalised. 80% of government "community care" money flowing to social services had to be spent in the "independent" (private or voluntary) sector. Strangely, these policies were enthusiastically greeted by Labour
politicians at local and national level.
Despite Thatcher's pledge, the NHS budget stood still in real terms between 1982 and 1987. In the autumn of 1987 NHS finance director lan Mills declared that the service was "technically bankrupt". Driven by cash limits, plans for sweeping bed closures were steamrollered through health authority meetings. By December, 4,000 beds had closed. Consultants were up in arms. A petition launched by Hospital Alert and London Health Emergency gained 1,200 signatures from hospital doctors in just six weeks. Thatcher's government retreated, offering a one-off £100m injection of cash.
BRING OUT YOUR DEAD
BRING OUT YOUR DEAD!
FLU CRISIS - THE NHS GEARS UP..
But nurses, battered by years of increasing workload and dwindling personal purchasing power, were becoming more resentful. As if to rub salt in the wounds the government was attempting to end nurses' entitlement to special duty payments. On January 7, 1988, a group of night shift nurses in Manchester walked out on strike. Though their action forced an almost immediate climbdown by the government, it also gave a lead to nurses throughout the country, who staged unofficial strikes.
### Waves of action
Thatcher announced a "review" of the NHS. In 1988 there were waves of official and unofficial industrial action (including strikes and "work to contract" action) by nurses furious at the arbitrary way a new grading structure was being implemented. The doctors' "union", the BMA, called for a £1.5 billion cash injection into the NHS - the equivalent of 1p on income tax- calling for it to remain essentially tax-funded. The Labour Party mounted a campaign calling for an extra £2 billion. At local level, too, doctors and consultants joined forces in many towns and districts in campaign groups to "rescue the NHS" Militancy again grew, into a "hot autumn" across the country, as angry down-graded nursing staff protested by the effective tactic of "working-to-contract".
Early in 1989 came the long-awaited Tory plans, in a White Paper Working for Patients. The new plan relied heavily on the concept of an "internal market". The NHS would be divided into "purchasers" and "providers", with both remaining within the framework of the NHS. The main purchasers would be revamped health authorities. A second line of purchasers would be GPs: bigger practices would be urged to become "Fundholders" and take responsibility for cash-limited budgets, from which they would buy non-emergency hospital treatment for their patients - from local NHS hospitals or, if they chose, from the private sector.
### Opting out
The "providers" - the hospitals and community services - would be encouraged to "opt out" of health authority control as "NHS Trusts". Hospitals would be obliged to compete against each other each year for contracts from health authorities and GP Fundholders. The claim was that money would "follow the patient", rewarding the hospitals which best succeeded in meeting local requiremerts, while holding
There were legitimate fears that the "competition" would ignore the quality of care and centre on the issue of price. Hospitals which lost contracts would also lose contract revenue - and would have to make more cuts. Separating the management of hospitals from health authorities would mean expanding the ranks of senior
Establishing competition between hospitals also meant that every form of treatment would have to be "priced", contracts costed and monitored, and bills prepared for individual cases treated in hospitals where their local health authority had no regular contract.
None of this bureaucracy had previously been necessary in the NHS, and the simplicity of the system was one reason why administrative costs in Britain had been so dramatically lower than those in other insurance-based health care systems in Europe or the "free market" system in the USA. The scene was set for the runaway expansion of NHS administrative bureaucracy. The "opting out" of hospital Trusts meant the fragmentation of the NHS. The decision to "opt out" could be proposed by senior management, and rubber-stamped by the Secretary of State. There would be no ballots or votes.
### Competing for contracts
Trusts, as rival "businesses" competing for NHS contracts, would guard their business secrets by meeting behind closed doors, holding only one public meeting a year. Trusts were also required to pay interest ("capital charges") on their assets. Trusts would be allowed to sell assets, expand numbers of pay-beds, and decide "local" pay and conditions for Trust employees - tearing up national-level agreements. They had to balance their books and show a 'return on assets' of 6% each year. A failing Trust could go bust. Ministers insisted from early on that they would not bail out bankrupt Trusts.
These reforms were formally opposed by the Labour Party, by the health unions, and by the BMA, but once the Griffiths community care reforms were incorporated into the Bill, Labour's already tepid opposition to the market reforms was further defused by its acceptance of half of the new legislation. The multi-million pound BMA campaign was not matched by any comparable effort from the health unions. Although health workers were the most likely victims of the new market-led regime, they waged no coordinated campaign.
Opinion polls showing almost 75% of voters - and more than half of all Tory voters - to be opposed to the reforms did not prevent the proposals being pushed through Parliament as the NHS and International Viewpoint #320 April 2000 13
* Great Britain Community Care Bill. However the Tories recognised the potential disruption that could be caused if the community care reforms were introduced in 1991, alongside the new internal market. Although the legislation was pushed through Parliament, the date for implementing the community care reforms was pushed back to 1993, so that the first new means-tested charges would be imposed well after the election.
When the first hospitals applied to opt out in 1990 it triggered a new wave of active local anti-opt out campaigns, often linking broad sections of the community, reaching from health unions through Community Health Councils, councillors, Leagues of Friends, pensioners groups and beyond. Large, angry public meetings were held, which demonstrated and reinforced popular opposition.
### Tories determined
But the Tories were determined. In December 1990 the first 57 Trusts were announced: the government had convinced most senior managers that there was little choice but to seek Trust status. GPs were effectively bribed to become fundholders. In 1994 it emerged that the government had been handing out a £16,500 lump sum to any GP who expressed an interest in fundholding - money that was theirs to keep. It would be followed by another cheque for £30,000 as a start-up gift for any GP that joined the scheme. There was an added incentive: practices could retain any unspent surplus from their annual budget. In 1993/94, 585 fundholding practices retained a total of £28 million.
There was growing anger, too, at revelations of the predicted "two tier" service emerging within the NHS. A BMA survey of 173 hospitals in 1994 found 73 of them were offering preferential services to fundholders patients, 41 of them promising "fast-track", more rapid admission. By 1997 each hospital Trust was spending up to £1 million a year on the bureaucracy of deals with fundholders - suggesting a national bill as high as £500 million - a "hidden" cost of fundholding.
Closures of acute hospital beds continued, with the effects masked by a succession of mild winters and the use of "waiting list initiative" funding to reduce the numbers of patients waiting over a year for
But the sharp winter of 1995/96 triggered a "trolleys crisis" in London and 14 International Viewpoint #320 April 2000 other big cities. In South West London, medical directors from six acute service NHS Trusts broke the official silence and published a letter they had sent to Health Secretary Dorrell protesting at the impact of the bed shortage. In the 1996/97 winter, Hillingdon Hospital in west London announced it could admit no more patients aged over 75 until social services found nursing home places for some of those who should be discharged. The May 1997 election drew closer amid evident chaos in NHS. This made even Labour's vague and conservative proposals for the replacement of the internal market with some form of "local commissioning" appear an attractive alternative for many health workers and concerned voters. The pattern of polling showed much stronger support to Labour in areas where hospital services were seen as under threat.
Late in 1997 came Labour's White Paper, The New NHS. Although Labour ministers proudly proclaimed the end of the Tories' "internal market", and a new era in which "competition" was to be replaced by cooperation, many key elements of the Tory reforms remain intact. The new proposals did try to reduce the number of negotiations and transactions, and promised to cut the numbers of invoices and the volume of administrative work, partly by cutting the number of purchasers ("commissioning bodies") from 3,600 to around 500. But they will not eliminate any of the existing tiers of NHS management, and the promise of savings totalling £1 billion from cuts in bureaucracy appears over-optimistic.
### Less accountability
The NHS under the new system is still run by a network of unelected, unaccountable Health Authorities - which act as planners and purchasers. But key local decisions are now taken by even less accountable new commissioning groups -Primary Care Groups (PCGs) consisting of GPs, community nurses and social service managers, but with no public accountability. After years in which Labour promised to scrap the "two-tier" inequality and bureaucracy involved in the Tory system of GP fundholding, the White Paper was at pains to explain that its proposals aimed "to keep what has worked about fundholding, but discard what has not." The difference is that all GPs, along with community nursing staff, can theoretically participate in the new Primary Care Groups and have a voice on how local budgets are spent for each "natural community" of around 100,000 people.
Labour has adopted the Tory perspective of a "primary care-led NHS", in which GPs have increasingly (though in most cases unwittingly) been enlisted to help in the rationalisation and run-down of hospital services. Despite their growing power, it is becoming increasingly difficult to recruit GPs, especially to inner city areas, while numbers seeking GP training have fallen. Some doctors have spotted that while GPs gain more control, the same reforms mean that primary care budgets are now fully cash-limited for the first time since the NHS was founded in 1948.
### Big losers
While GPs and community nurses are feted in the White Paper as the fount of all wisdom, the big losers under the new scheme are hospital doctors, hospital nursing staff and Trust management. They will have no say on the allocation of resources and no direct input into decisions on health priorities - but they will have to carry the can for decisions taken by others. Hospital staff will be press-ganged into even greater effort as they find themselves on the receiving end of cuts decided by their "colleagues" in primary care. The fundamental split of the market system remains, as do Trusts (which Labour for years promised to scrap), although their numbers are being reduced by a new wave of mergers, heralding further hospital closures and cuts
Another key Tory policy has also been repackaged by the new government. The Private Finance Initiative (PFI), intended to "privatise the provision of capital to the NHS" is now hailed by Labour's team as heralding "the biggest hospital building programme in the history of the NHS". When first introduced, PFI required that any large hospital development had to be put out to tender, inviting consortia of private banks, building firms and service contractors to bid for the chance to put up the capital, build the new facility and lease it back to the Trust with support services. The scheme means the private sector deriving profits from the ownership of district general hospitals for the first time since Labour nationalised the hospitals in
Initially PFI was presented as a way in
which additional (private) capital could be injected into public sector projects without disrupting the government's Public Sector
Borrowing Requirement. But this pretence was soon discarded. Private money is now a substitute for public investment. The negotiation of a PFI deal is a prolonged nightmare. The decision on how many beds were needed is now left not to the
NHS, but to a consortium of private developers. The result is that the health care component of new hospital schemes has consistently been whittled down in size
This leaves more scope for potentially lucrative facilities such as shopping malls, food courts and car parking, all of which will, under PFI, generate cash for the private owners of the building, not the NHS Trust.
### Monopoly contracts
Another potentially profitable aspect of PFI schemes is the prospect of monopoly contracts for support services. Many relatively small-scale capital projects have been boosted in value by the addition of contracts for almost every non-clinical support service: computers and IT services, maintenance, security, portering, domestic, laundry and catering services. All these, on long-term agreements protected against inflation, offer big profits to PFI firms. For the same reason, PFI deals cost more in the long run both for the NHS itself and for the British exchequer. Many PFI deals also incorporate a "land swap" in which the developing consortium eventually takes over the vacated NHS sites as part of the financial package.
Labour leaders began their love affair with this Tory policy in the second half of 1996. Despite a Gallup poll among Trust bosses showing that 70% of Chief Executives thought PFI was not cost effective in the long run, and 90% believing that the private sector would only get involved profits were guaranteed, shadow Treasury minister Mike O'Brien insisted that "Labour has a clear programme to rescue PFI". The rescue took the form of a new law which compels any future of Secretary of State to pick up any outstanding bills for Trusts which default on PFI contract payments.
Most of the new deals which have been agreed since Labour took over the Tory policy last for 60 years - longer than the NHS has so far existed. The government is signing blank cheques to carry on paying millions a year for hospital premises which may well have outlived their usefulness in
15-20 years time. Billions of pounds in taxpayers money will be poured over the next 65 years into the swollen coffers of private construction, contracting and banking conglomerates, while front-line patient services will almost certainly have to be pruned back to meet cash limits and reduced bed numbers.
### Milked for profits
Milked for profits by private firms, starved of cash by the government, desperate for trained nursing staff, and struggling to recruit doctors and other professionals, the NHS nevertheless remains the most popular public service in Britain. Its popular appeal rests in the main in its founding principle of being a universal service, free to all at point of need, and funded from taxation. The levels of service and the conditions of the staff working in it have been eroded over the years, as part of the general defeats inflicted by Thatcherism on the British working class.
On occasions, militant action from health trade unions has been able to link up with broader popular support to wage politically powerful campaigns, such as the 3-year hospital occupation which in the mid 1970s saved the Elizabeth Garrett Anderson women's hospital. Other powerful campaigns have taken the form of wide popular movements, based in the local community, fighting to defend threatened hospitals or services.This type of campaign has worked through applying political pressure, though even the biggest campaigns, based on the most solid arguments, cannot guarantee victory on an issue the government has made a point of principle.
With few activists from the far left or Labour Party in Britain prepared to allocate consistent time or resources to campaigning in defence of health services, the campaigns tend to be broad but politically under-developed, often led by experienced older activists from a Stalinist background. Against this constant potential for wide popular opposition, the scope for a full-scale privatisation of health care has been limited. Every government since 1948 has had to claim to be a defender of the NHS. Peripheral aspects of the service have been privatised, but not the service itself. Private, medical insurance still remains
Ch of the Bith poput
through company-run schemes.
Every major eruption of struggle by health workers, whether on pay or in defence of beds or services, has found an immediate and powerful echo of public support, and confirmed a potential for deeper and more prolonged resistance. But such struggles have found little in the way of leadership or solidarity from the timid leaders of the British trade union movement. The unions have never really recovered from the massive reverses inflicted on
NHS support staff through competitive tendering and privatisation in the 1980s.
This fundamentally altered the shape of the health unions, increasing the relative influence of nursing staff, and intensifying an unresolved crisis of leadership within them.
### Unresolved problems
The market reforms of the 1980s have boosted bureaucracy and managerial pay, but resolved none of the resource problems facing the NHS. These stem from successive British governments refusing to spend as much on health as their European neighbours, and allowing British employers to pay only half as much in national insurance payments towards health care as in other EU countries. The government's belated decision to boost spending towards European levels over the next three years is a major policy change. It is further testimony to the political strength of the NHS as an issue in the British political arena.
But the new money comes only after health authorities and Trusts have plunged £600m into the red. This means that much of the first year's increase is likely to be soaked up paying off back debts, leaving the imbalance of the service unresolved. Brown's tight-fisted policies for the first three years could yet come back to haunt New Labour, with the possibility of another winter of crisis before the next general
The task of the left in the unions and in wider campaigns is to keep up the pressure in defence of threatened services. Campaigners will be demanding that the increased funding is channelled directly to the key areas of a service that in many ways represents the last positive legacy of post war social democracy. * *John Lister is Information Director of London Health Emergency, a pressure group in defence of the NHS, which has been campaigning since 1983. (email health.emergency@virgin.net: phone 0208960-8002) International Viewpoint #320 April 2000 15