The amount of the NHS budget going to private healthcare firms has reached unprecedented levels, despite the health secretary’s pledge to roll back outsourcing of patient care.
The Department of Health and Social Care handed a record total of £9.2bn last year to private providers such as Virgin Care and the Priory mental health group, its annual report shows.
That is an increase of 14% from the £8.1bn that went to profit-driven healthcare companies in 2014-15 and £410m more than the £8.77bn they received in 2017-18.
It comes after Matt Hancock pledged to MPs in January that “there is no privatisation of the NHS on my watch”.
The House of Commons Library has verified the upward trend and sums involved from analysis it undertook at Labour’s request of figures about the DHSC’s purchase of healthcare from organisations outside the NHS contained in the last five years of the ministry’s accounts.
“Tory privatisation of our NHS continues to gather pace with public expenditure on independent providers now at a record high”, said Jonathan Ashworth, the shadow health and social care secretary.
“These accounts blow apart Matt Hancock’s claims to parliament there would be no privatisation on his watch.”
The relentless rise in NHS privatisation is occurring even though NHS England has declared its desire to drastically reduce what it says it views as the damaging tendering of services as part of its drive to create much more integrated care, ideally delivered by NHS providers. It has produced detailed proposals – backed by Theresa May – that it hopes will form the basis of legislation to drive private firms out of the provision of NHS care as far as possible.
The DHSC’s accounts also disclose that its total spending on all non-NHS bodies has risen even more sharply than that on private firms, from £10.32bn in 2014-15 to £13.75bn last year – an increase of £3.43bn or 33% over four years. The department stressed that, while the overall amount was going up, the rise in its budget meant that the proportion of that going to private firms had remained constant at 7.3%.
That bigger £13.75bn total includes money handed to both the voluntary and not-for-profit sector, which has risen threefold over that time from £530m to £1.62bn, and also to local councils, which has gone from £1.77bn to £2.9bn. The latter is thought to cover spending on social care, community mental health services and continuing healthcare, in which the NHS pays for medical care for people with a disability, injury or illness who are living at home or in a care home.
Campaigners against NHS privatisation strongly criticised the record £9.2bn spend on private care.
“The extra £415m spent on private providers in the last year is a significant 5% increase and makes a nonsense of Matt Hancock’s pledge of ‘no privatisation on my watch’”, said Dr John Lister, a health policy academic and secretary of the campaign group Keep Our NHS Public.
Private firms receive a far bigger slice of the share of the budget for certain forms of care than the independent sector’s 7.3% average, he pointed out. “Last year, roughly 30% of all mental health spending was in the private sector and 44% of spending on child and adolescent mental health goes to private providers. Private sector domination is most complete in the provision of controversial ‘locked ward rehabilitation’, in which a massive 97% of a £304m market in 2015 was held by private companies”, he said.
“The full picture is much more alarming with the added prospect of a Johnson government putting the NHS ‘on the table’ in any future US trade negotiations.”
Paul Evans, the director of the NHS Support Federation, which monitors privatisation of healthcare, said: “In response to criticism, failures and waste, the health secretary promised no further privatisation. But since then the outsourcing of NHS services has rolled on and more services have become reliant on the private sector to deliver their core services.” For example, a third of all hip replacements on the NHS are now done privately.
Despite the pledge to roll back privatisation, for-profit firms have consistently won contracts to deliver community health, mental health and diagnostics services in the last five years, Evans added.
“Despite the NHS long-term plan calling for an end to the experiment with competition and outsourcing, the government has done nothing to change the rules that force the NHS to advertise its contracts to the private sector. The accounts of the Priory Group, the largest mental health provider, show that 52% of its income of almost £800m comes from the NHS,” he said.
A spokesperson for the DHSC said: “We are committed to a world-class NHS free at the point of use. The proportion of NHS funding going to independent sectors has remained largely stable since 2014-15. The overall funding in the NHS has increased since 2014-15, so while the proportion of spend has not changed, the amount spent has risen in both public and independent sectors.
“We want patients to receive the best quality of care possible and the vast majority is provided by the NHS, supported by independent organisations when a local doctor decides it is in their patients’ best interests.”
