Labour’s plan to expand the private health sector while the NHS struggles

Labour’s announcement on elective care plan

On 6^th January 2025, Sir Keir Starmer, the Prime Minister, announced a government initiative on health care.

The announcement was mainly to do with elective care – that is, the planned care we have when we go onto a waiting list before treatment or an operation, usually at a hospital.

Some of the announcement was very promising. The Prime Minister promised:

• that 92% of referred patients would be seen and treatment started within 18 weeks by 2029
• that there would be 2 million more appointments by July
• that there would be half a million appointments via community diagnostic hubs, open 7 days a week, 12 hours a day for same day tests and consultations
• and that there would be some new surgical hubs for common, less complex procedures and an expansion of some existing hubs.

On the face of it, this looked a good step forward.

More worrying was the plan to cut GP referrals to hospital specialists by paying them £20 for every time they asked for ‘advice and guidance’ from hospital clinicians about how to care for a patient, an option increasingly being used to hold off a referral and keep the patient under the care of the GP with no access to specialist care. Where this is the best thing for the patient, we have no complaint to make. But where this is used essentially to deny the hospital care a patient needs, it serves as a cynical measure to enable the government to achieve its waiting list promises without actually giving patients the care they ought to have. It turns out GPs have also been worrying about this for some time.

And another worrying development was the plan to cut 1 million appointments by scrapping automatic follow-ups and putting the onus on patients to request a follow-up – using the NHS App. This is a recipe for widening inequalities in health care as those with good health literacy, easy access to the internet, confidence in using online apps, time to spend chasing this and the self-assurance to advocate for their own health care secure their follow-up appointments while those who are digitally excluded and unconfident in online communication, with limited understanding of what is expected don’t get their follow-up appointments.

The deal with the private health sector

But there was even more troubling news. The Prime Minister announced that the government is entering a ‘partnership agreement’ with the private health sector. The announcement confirmed what we feared – that the government planned to embed the private sector even more deeply into the NHS. The extent of this is flabbergasting.

The government has promised the private health sector the following:

Huge increase in public funding for the private sector: £2.5bn of the NHS budget to expand the private sector’s provision of elective care and diagnostic care for NHS patients with expansion into a wider range of care than has previously been the case

Digital Integration: NHS and independent sector digital systems will be aligned around national standards, allowing patients to access appointments and results more easily via the NHS App

Workforce Development: Both sectors will collaborate to grow and develop the elective workforce, ensuring consistent training in the independent sector

More power and influence: Greater involvement of the private sector in ‘planning’ local health services

Expansion of the private sector: The government hopes that the near-guaranteed income from the NHS budget, arising from collaborative working and long-term contracts, will encourage the private sector to expand their diagnostic and elective care facilities.

In short this is a programme for the expansion of the private sector at the expense of the taxpayer. Of course, the private sector will have to treat NHS patients for its money but it will be doing so at minimal risk. Moreover, although at first sight it looks as if the private sector will be helping out the NHS by taking some of the pressure off it, there is evidence that involving the private sector in this way adds to the NHS’ problems rather than solving them.

Why is expanding the role of the private sector a problem?

• The policy isn’t about using the ‘spare capacity’ of the private sector, it is about expanding it. The private sector is being given long-term NHS contracts to expand its capacity and its foothold within the NHS. Public money will be used to underpin private capacity, guaranteeing private profits at minimal risk.
• The policy reduces the funding available for NHS facilities and services. Funding, which would otherwise have been spent on improving and expanding services in the NHS, is now being diverted to the private sector.
• Private sector units cherry pick patients. Because they mainly undertake relatively routine procedures, they accept patients who tend to be younger, to live in more affluent areas and to have relatively simple conditions. This leaves the more complex cases – which are more expensive to treat – to the NHS, which now has less money because some of the budget had been siphoned off to give to the private sector.
• The use of the private sector for NHS funded care increases inequalities. Evidence shows that since governments started using private companies in this way, patients living in more deprived areas are less likely to be treated by private sector providers and wait longer on the waiting list than patients living in more affluent areas.
• When things go wrong, it is the NHS which has to deal with  the problem. There are two reasons the private sector takes the relatively easy procedures: first, they involve less risk and it is easier to make a profit from them; and second, small private sector units typically lack intensive care facilities, multi-disciplinary teams and adequate night-time medical cover. When something goes wrong in the private sector, the patient must be transferred to the NHS, sometimes via an NHS ambulance and for an NHS re-operation, costing hundreds of millions of pounds per year.
• The private sector takes staff away from the NHS. There is only one source of trained staff  – the  NHS. If more work is done in the private sector, staff are inevitably taken away from NHS work with the result that NHS services, including the more complex care, are reduced and undermined. 
• The quality of training in the private sector will be questionable as opportunities are limited by the limited nature of the work they do.
• Terms and conditions for staff can be worse in the private sector. Low paid workers are treated less well in the private sector – for example in pay and sick leave and job security for staff. These are often held down to cut costs and generate profits.
• The involvement of the private sector can worsen overall care. Diverting public funding to the private sector undermines the resources available to the NHS . For example, there is so much of the public budget now going to privately provided cataract operations that the private sector has expanded hugely – with 80-90 new private clinics opening in recent years – that the portion of the ophthalmic budget available for treating other, often more complex and more serious conditions has been shrunk. This means that many patients face longer and longer waits for complex care endangers NHS patients. So, the impact overall is to threaten the quality and quantity of some care. Research from Oxford University published in The Lancet suggests increases in the outsourcing of health care like this results in an increase in the death rate.
• Involving the private sector is more expensive. This is not necessarily because they are paid more for each procedure. They may be paid the same as the NHS but they have much lower overheads – there is no need to have an intensive care unit on hand, for example – and use the surplus to channel into profit. There are other aspects which make it more expensive:
  • an expensive competitive tendering process may be needed and contracts must be managed;if a company doesn’t get the contract it believes it should and threatens to sue, NHS funds must be used in the legal case;if they don’t make enough profit, they may hand back contracts leaving the NHS to find an alternative provider;if they fail to supply services at an acceptable standard and the contract fails, the NHS has to put in place an alternative;they may go bust, leaving the NHS to deal with the consequence;
  • and they may cut too many corners – the cyber attack on pathology lab provider Synnovis, which lacked the necessary cyber security, is thought to have cost £69 million. And some forms of private sector involvement are more expensive than the NHS equivalent – the private finance initiative is a good example where it has been calculated that two hospitals could have been built for the price of one had governments used public money to fund the investment instead of handing to over to a consortium of private companies.

Our demands

• We call for a commitment to publicly funded and publicly provided services and an end to outsourcing
• We want money which is being used to expand the private sector to be switched to stabilising the NHS and expanding its NHS capacity
• Emergency funding is required to stabilise both services and health care facilities – this includes  fully funding an expansion in community based services and  tackling the repairs backlog which is almost £14bn as many hospitals cannot use some of their own facilities because they are not safe.