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England's National Health Service: Liberation or devastation?

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By John Lister

The British ConDem coalition government has unveiled plans for sweeping and controversial changes to the National Health Service in England[1], which would see its workforce of around 1 million reduced to near zero within five years, with a combination of large-scale cuts and job losses, and staff hived off to the private sector and 'social enterprises'. And while services would still be available to all free at point of use, and funded from taxation, the NHS would effectively be reduced from a public service to a 'single payer' fund of taxpayers' money to be used to purchase health care from a range of private nonprofit and for-profit providers.

Flag - EnglandIn mid-July, the government released its White Paper, titled "Liberating the NHS" which triggered an angry reaction from health trade unions and from the Labour opposition, even though Labour had begun a number of similar policies while in government. Few of the proposals on the table go further towards privatization than any previous reforms in the 62-year history of the NHS.  Most were barely mentioned in the election manifestos of either the Conservatives or the Liberal Democrats in the run-up to May's general election.

The coalition's first 47-point statement on health policies published in May explicitly rejected more "top-down reorganisation" for the NHS, and proposed to introduce elected members to the 152 Primary Care Trusts which currently hold a large majority of the £105 billion ( tk dollars) health budget, and commission care at local level in England.

Nevertheless, the coalition will begin an unprecedented reorganization of the NHS, scrapping not only all 152 Primary Care Trusts (PCTs), but also the 10 Strategic Health Authorities (SHAs) which had been the coordinating bodies for the local NHS hospitals and providers.

While the White Paper requires tens of thousands of staff to work themselves out of a job within two years, thousands of staff who deliver services in NHS hospital Trusts and provider organizations also face massive upheavals, job losses – and the loss of their NHS pay, terms and conditions and pensions.

The White Paper requires all NHS Trusts to move to the autonomous status of 'Foundation Trusts' – or be taken over by one of the 129 Foundation Trusts already established – by 2013. Foundations, established under legislation  adopted after 2003, are outside of the management and accountability structures of the NHS, and are accountable not to the Secretary of State for Health but to an independent regulator.

Foundation Trusts already run more or less as free-standing businesses, although clearly the vast majority of their funding flows from the NHS. They are now being encouraged to take advantage of the freedoms which Foundation Trusts enjoy to break away from the national pay framework and negotiate local pay scales.

The White Paper also calls for lifting restrictions on the amount of money Foundation Trusts are allowed to generate through delivering private medicine or through joint enterprises with private companies.

Health Secretary Andrew Lansley has said he wants to push them even further into the commercial arena, by removing Foundation Trusts from the NHS balance sheets altogether.

This would mean that staff, like those who find themselves transferred to social enterprises, would no longer be NHS employees. And while European legislation means that existing NHS staff transferring would take their NHS terms and conditions with them, this does not cover pensions, and would not apply to any new staff recruited after the changeover. The White Paper restates and speeds up plans to cut a hefty £20 billion (more than $31 billion) in "efficiency savings," now to be achieved by 2014.

With unions and some members of the British Medical Association opposed to the policies the White Paper advocates, the next few months will see a bloody fight over changes to the National Health Service waged inside and outside Parliament.


[1] The proposed legislation does not apply to Scotland, where the NHS is controlled by its own Parliament, or in Wales or Northern Ireland, where the NHS is run from devolved national assemblies.

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