privatising the NHS thanks to New Labour

The government’s controversial Health and Social Care Bill, ostensibly giving GPs more control over NHS budgets, is about to open the door for a huge private sector takeover. This week, with the government plans still on hold (and supposedly in a “listening” phase), the House of Commons held a debate to challenge the proposed reforms to the NHS:

“During the debate on Monday, shadow health secretary John Healey called for the government to shelve the plans, warning they were “high risk, damaging and unjustified”.

He told MPs: “This is setting up the NHS as a full-blown market and that is the wrong prescription for the NHS.”

And he added such a move would lead to hospitals being ‘driven to the brink’.”

Others, including some within the government, are also questioning the proposals. Nick Clegg says he intends to block the health bill unless it is altered:

[Clegg] said getting the NHS reforms right was “now my number one priority” and called for guarantees there would not be “back-door privatisation”.

He also vowed to be a “moderating” influence on the Conservatives on issues such as the NHS – a marked change in tone from the early days of the coalition government.”

Whether or not Clegg actually keeps to his promise we shall have to wait and see of course. Meanwhile, the Royal College of GPs (RCGP) have sent a 26-page analysis to the Prime Minister’s office which explains how the changes risk “unravelling and dismantling” the NHS:

RCGP chairman Dr Clare Gerada told the BBC the changes needed went far beyond any modest alterations.

She said: “I would hope that during this pause the government will reflect on what we’re all saying and will rewrite the part of the bill that is actually risking the NHS and risking the NHS being unravelled irreversibly for ever.”   1

Unfortunately, the previous government’s record on NHS reform is very far from exemplary, and so during the debate “Tory MPs attacked what they said was hypocrisy, pointing out that Labour had invited the private sector into the NHS while they were in power.”

According to Colin Leys, co-author of The Plot against the NHS, in this regard at least, they are perfectly correct. These are the opening remarks to a lecture he gave at Goldsmith’s College on 8th April:

“The common view of the changes proposed in the government’s Health and Social Care Bill is that they would be the most radical changes ever made to the NHS. In one way this is correct: the changes do mean replacing a comprehensive, universal system of care with a US-style healthcare market, consisting of providers, all governed by the bottom line. There will be a limited, ‘basic’ package of services for everybody, funded by the state; and better-quality treatments, on payment of a fee or co-payment, for those who can afford to pay.

But in another way the common view is wrong: the changes that were made under New Labour were more radical. A simple consideration makes this clear. If Mr [Andrew] Lansley had taken office last year facing an NHS as it still was in 2000 his project would be unthinkable. In 2000 there were no foundation trusts; no payment by results for hospital treatments; no private health companies already providing NHS acute care and GP services; no independent regulator of the healthcare market (Monitor). Without all these changes, and many others, what Lansley’s bill now proposes would be unthinkable.”2

In fact, New Labour began to tinker with the NHS almost as soon as it came into office, with promises “to overturn the Conservatives’ internal market structure, vowing to replace it with a more collaborative, quality-based approach”.

It wasn’t too long, however, before it began “pushing towards a more market-orientated strategy: a patient choice-led approach to hospital funding, the removal of ideological barriers preventing the use of private health providers to carry out NHS work, and the devolution of management and budgetary control from Whitehall to local NHS organisations”.3

Following its “Agenda for Change” initiative of 2004, the New Labour government then, in 2006, installed a new chief executive, David Nicholson, whose role was to carry out reforms of the NHS “to tackle its debt crisis.”4

In his first interview as chief executive, Nicholson told The Guardian that:

“It is his NHS pedigree that has made him determined to push through reforms even faster than before.”

And Nicholson’s credentials are noteworthy enough to be detailed in the same article under the heading early baggage (the “second stage” of his career, which I’ve highlighted in italic, being of particular interest):

“Nicholson has been with the NHS for 29 years. He joined as a graduate trainee in the same year he joined the Communist party…

Nicholson drifted away from the Communist party and abandoned his membership in 1983. But he has stuck with the NHS in a career that has spanned three phases. For the first 10 years he worked in mental health, mainly in Yorkshire…

For the next nine years, Nicholson moved into the acute hospital sector. He was chief executive of Doncaster Royal Infirmary, one of the first wave of NHS trusts to break free from Whitehall control under Margaret Thatcher’s policy of NHS reform. That “liberating” experience taught him the benefits of independence and the need to mobilise support for reform among clinical staff. “Once you engage them and gain their trust, there is nothing stopping you,” he says.

The third stage of his career, which has led him to the top of the NHS tree, was in regional and strategic health authority management. It was there, he says, that he learned how to deliver change on a grand scale by getting all the bits of the system pointing in the same direction.”5

In a speech delivered behind closed doors back in 2009, it was Nicholson who told health service finance directors that a new programme of reforms was needed to deliver between £15 billion and £20 billion [which equated to 6% of the total budget] in ‘efficiency savings’ over three years from 2011 to 2014. In response, Dr Hamish Meldrum, chairman of the British Medical Association council, warned that if efficiency savings went ahead on such a scale “there is a real danger that patient services could be threatened”.

We also learn from the same article in The Telegraph that previous reforms, such as Agenda for Change, had in any case made almost “no difference” to efficiency:

“The PAC [all-party Public Accounts Committee] report on Agenda for Change, to be published on Thursday, will show that one such drive – called Agenda for Change – has made almost no difference to the amount the NHS pays out in salaries every year.

The reforms to NHS pay structures were introduced following an agreement in 2002 between trade unions and Alan Milburn, the then-health secretary, who called the package “a good deal for Britain’s NHS”.

The changes, described as “the biggest job evaluation and implementation scheme on the planet”, were introduced between 2004 and 2006, with new salary bands and job descriptions to standardise the pay and conditions of over one million health service employees.

The Department for Health predicted at the time that the new pay system would save taxpayers at least £1.3 billion over five years, as well as ensuring a significant increase in staff productivity.

However, MPs were told by the National Audit Office (NAO), the Whitehall spending watchdog, that ‘for 2007/08 the £28 billion NHS pay bill is broadly similar to what it might have been if the programme had not been implemented’.” 6

What had started with Thatcherism, and then continued under Blair and Brown, has now reached a critical phase under Cameron. To understand how this relentless drive towards privatisation on the basis of “efficiency savings” has been maintained by successive governments, I recommend an excellent short documentary put together by Tamasin Cave and David Miller at

As Colin Leys said in his lecture at Goldsmith’s College:

When you have seen [the video] you understand a lot more about Andrew Lansley and where his ideas are coming from.”

Leys concluded his lecture as follows:

But just in case you are not convinced of the design behind this, and don’t think it’s fair to call it a plot, let me add just one item. In January there was a discussion on Radio 4 between Matthew Taylor, who was once Blair’s chief of staff, and Eamonn Butler, the Director of the Adam Smith Institute, where Tim Evans also works – same Tim Evans who negotiated the concordat with Milburn and looked forward to the NHS becoming just a kitemark.7  They were asked if they thought the NHS was really going to be ‘a mere franchise’. Butler replied, quite casually, ‘It’s been 20 years in the planning. I think they’ll do it.”

Click here to read a full transcript of the lecture.

The Plot Against the NHS by Colin Leys & Stewart Player is published by Merlin Press Ltd for £10. Click here to go to Merlin Press website.

1 “Government fights off Labour challenge to NHS plans” from BBC News on May 9th 2011. Click here to read the full article.

2 From a lecture given by Colin Leys at Goldsmith’s College on April 8th 2011 based on a book also entitled “The Plot against the NHS”, by Colin Leys and Stewart Player, published on April 14th. Click here to read a full transcript.

3 “NHS reform: the issue explained – Labour has promised to create an NHS for the 21st century, investing record sums to try to achieve its vision of a dynamic publicly-funded, consumer-driven health service.” Patrick Butler reports for The Guardian, Wednesday 7th May 2003. Click here to read the full article.


“The government today appointed a new head of the NHS whose first job will be to tackle its debt crisis.

David Nicholson, currently chief executive of NHS London, where some of the current financial problems are most acute, replaces Sir Nigel Crisp, whose sudden departure in March provoked a fierce political row.

Announcing the appointment, the health secretary, Patricia Hewitt, said: ‘David’s challenge is to ensure that the NHS continues to achieve better results for patients, while restoring financial balance.’”

Taken from “New NHS chief appointed” by Matt Weaver, published in The Guardian on Thursday 27th July 2006. Click here to read the full article.

5 From an article entitled “Right on with reform: In his first interview as the new NHS chief executive, David Nicholson says the health service should brace itself for more upheaval. ‘Tough decisions’ on failing hospitals are high on the agenda, he tells John Carvel, from The Guardian, Wednesday 13th September 2006. Click here to read the full article.

6 From an article entitled “NHS chief tells trusts to make £20bn savings: The head of the NHS has told senior managers to plan for spending cuts even more drastic than those already thought to be on the way.” by James Ball and Patrick Sawer, published in The Telegraph on June 13th 2009. Click here to read the full article.


“The story begins for me in July 2000. Alan Milburn was the Secretary of State for Health and was in the middle of negotiating a so-called concordat with the Independent Healthcare Association. The concordat said that from now on the NHS would take advantage of private sector healthcare providers on a regular basis, not just exceptionally, as for example in the annual winter beds crisis. The Independent Healthcare Association’s chief negotiator was Tim Evans. I interviewed Tim Evans at the time. He told me that his vision was that the NHS would be just ‘a kitemark attached to the institutions and activities of a system of purely private providers’.

Click here to read a full transcript of the lecture.


Filed under Britain, neo-liberalism, Uncategorized

2 responses to “privatising the NHS thanks to New Labour

  1. pete

    Totally agree with you except that NHS would have been safer under Labour than the coalition and Nick Clegg….

    Andrew Rap


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