The much-anticipated review of NHS performance commissioned by Health Secretary Wes Streeting, and conducted by Professor Lord Darzi, has now been published.

The review identified several factors as central to the crisis the National Health Service is currently facing. Those factors include, “austerity in funding and capital starvation”, alongside the effects of the Covid pandemic, the “lack of patient voice and staff engagement; and management structures and systems.”

The review heaps blame on the Health and Social Care Act of 2012 for the NHS’s current lack of capacity to deliver surgeries and tests, which has resulted in over 7 million people on NHS waiting lists. According to Lord Darzi, “by dissolving the NHS management line, it [the 2012 Act] took a “scorched earth” approach to health reform, the effects of which are still felt to this day.” The 2012 Act, which the review calls “disastrous”, was “a calamity without international precedent”.

Where the review clearly falls short is in its failure to identify another clear impact of the 2012 Act, which has had a disastrous impact on the NHS: privatisation. 

Section 75 of the 2012 law required NHS commissioners to tender for services over a certain value, allowing NHS providers such as Trusts and Foundation Trusts to compete against private companies on almost equal footing to deliver NHS services. According to academics Allyson Pollock and Peter Roderick, “In the first year after the Act's implementation, one-third of NHS contracts were awarded to the private sector”. 

Campaigners have long suspected that this expansion of the role of the private sector in the NHS has been disastrous for the health service. Recent We Own It research has demonstrated that they were right.

We Own It analysed over 72,000 NHS outsourcing contracts given out by NHS bodies at the national, regional and local levels between January 1st 2012 and May 31st 2024, worth a total of over £130 billion. 

Our analysis showed that private firms made an estimated average of 5.18% in profits from NHS contracts for outsourced services. In other words, £6.7 billion, or £10 million per week over the relevant period, of the total value of all the contracts was lost to profits. 

Our analysis found that out of the £6.7 billion total profits that have left the NHS, £5.2 billion, or around £7.8 million per week, were from contracts for services that the NHS performs in some parts and can perform, such as surgeries, tests, musculoskeletal therapy, cleaning, catering, security, patient transport, etc. That is, services that can, relatively easily, be brought back in-house.

While Darzi blamed austerity and top-down NHS reform for the current lack of NHS capacity, it is easy to see how the extraction of profits from the system could equally have undermined the health service’s ability to build capacity. For example, £10 million a week (or even just the £7.8 million a week lost from service contracts), could have theoretically helped the NHS build one new operating theatre every week to treat 100 extra patients per week.

Crucially, the review also fails to mention the impact of Private Finance Initiatives on the NHS over the last 14 years. Despite only receiving around £13 billion in assets from PFi deals, NHS Trusts were saddled with over £80 billion in PFI debts. PFI has done significant damage to NHS Trust budgets, and, as a consequence, to their ability to provide the care that NHS patients deserve and that Trusts want to provide. 

A 2019 report by the Institute for Public Policy Research (IPPR) found that some NHS Trusts are spending £1 in every £6 available to them servicing PFI debts. Some trusts are in greater debt than others, leading to what has been named the “PFI postcode lottery”. Trusts like North West Anglia, Sherwood Forest, University Hospitals Coventry and St Helens and Knowsley all spend over 10% of their budget on PFI debts.

The Labour government must not only learn from the failures of the 2012 Act and past policies like PFI, they must set about reversing them. In other words, in addition to the three big shifts (from hospital to community, from analogue to digital, from sickness to prevention) the government is talking about creating, patients need a big shift from private to public. 

This means bringing outsourced NHS services back in-house when their contracts expire. Our research shows that 94% of all current outsourcing contracts for services expire during this parliament. This means that the government has a historic opportunity to reverse the impact of the calamitous 2012 Act. 

This is what patients and the public want. 87% of the public according to the latest polling say they want the NHS to be run completely in the public sector.