RESEARCH: Labour's historic opportunity to reverse NHS outsourcing in first term

Protesters in Parliamentary Square with the message "NHS Privatisation Kills"

3 June 2024

Brand new We Own It analysis of NHS contracts data shows that 94% of NHS outsourcing contracts for services [1] are set to expire during Labour’s first term in government, if they win.[2] In reaction, actor and comedian Stephen Fry says the party has a historic opportunity to reverse NHS privatisation.

Take a minute to send our letter to Wes Streeting, Labour's shadow health secretary, demanding he pledges to take outsourcing NHS services back in house as their contracts expire. Click HERE.

Using NHS contracts data provided by public sector procurement specialists Tussell, We Own It’s analysis shows that Labour will inherit 7452 contracts for services, worth a total of £29.1 billion,[3] between for-profit private companies and local, regional and national NHS entities in England.

93.7% of these contracts - 6983 contracts - worth £19.7 billion, are scheduled to expire between 5th July 2024 and 5th July 2029. This means Labour will have to decide whether to bring those services back into the NHS.

Tussell estimates that for-profit private companies stand to make just over £1 billion IN PROFITS from all NHS outsourcing contracts Labour is set to inherit when they take office on the 5th of July [4]. 

We Own It estimates that the £1 billion that is set to leave the NHS in private profits could have helped the NHS hire over 27,000 NHS nurses [5] or cover the cost of knee replacement surgeries [6] for over 71,000 NHS patients.

Among the contracts Labour can bring in-house in their first-term is failed track and trace provider, Serco’s £128 million contract to provide catering and cleaning services to University Hospital Southampton NHS Foundation Trust, expiring on 31st May 2027. 

£27.5 million in profits is estimated to leave the Barking Havering & Redbridge University Hospitals NHS Trust, the North East London NHS Foundation Trust and the North East London Integrated Care System, which cover constituencies in North East London including Shadow Health Secretary Wes Streeting’s Ilford North constituency

Labour can do in the NHS what they have already pledged to do in rail

Labour’s public transportation (rail and buses) plans demonstrate a pragmatic approach to rebuilding public services, which includes pursuing public ownership in areas where they can take services back when contracts end without compensating shareholders.

This means, like in rail, Labour can commit to take almost all outsourced NHS services in house in their first term, when their contracts end.

A March 2024 review by the University of Oxford shows that outsourcing in healthcare leads to worse care for patients. [7] 

Additionally, in their April 2024 report, the BMJ’s Commission on the Future of the NHS (under the subheading of “food”), identifies outsourcing in areas like NHS catering as leading to poorer health outcomes. [8]

Peer-reviewed academic research also shows that hospitals cleaned by private companies are dirtier and spread more hospital-acquired infections than those cleaned by in-house NHS staff. [9]

Latest We Own It/Survation polling shows 78% of the public want the NHS fully in public ownership [10]

Reacting to our research, actor, comedian and former QI host said: "After 14 years of the worst outsourcing in the entire history of the NHS, Labour has a historic opportunity to reverse NHS privatisation. As We Own It’s analysis shows, they can make a serious difference in reinstating the NHS as the fully public service their party founded the NHS to be, if they choose to.

“Politicians have historically presented outsourcing as a neutral choice, but it clearly isn’t. It’s resulting in billions leaving public services in the form of profits, which could instead be used to provide a better service to everyone. And as we see with water, the railway and the NHS, it has not worked.

“It’s important to remember that our NHS was ranked as the best healthcare system in the world by a panel of experts at the Commonwealth Fund in 2014. Comparisons of global healthcare systems still show the NHS is among the most efficient systems in the world. This demonstrates there is nothing wrong with the basic model of our NHS. 

“Like everyone in Britain, I owe so much to our NHS. Our NHS speaks to the best of our nature. It is an emblem of the compassion we have for each other. Nothing brings Britain together better than our love for the NHS. Labour has a big opportunity to bring the country together with a commitment to protect our NHS from private influence so that it continues to be here for future generations.”

Johnbosco Nwogbo, lead campaigner at We Own It said, “Only the NHS has A&Es, trains doctors, and treats everyone however complex their case may be. Building up the NHS to treat everyone who needs care is the most efficient and effective reform a Labour government could introduce. 

“The first step is to take back NHS outsourcing contracts when they expire. Labour will get a chance to do right by the NHS, and the public is looking to them to protect the NHS. We know this is what the public wants, with our latest polling showing almost 8 in 10 people saying they want a fully public NHS.”

Dr Ben Goodair, an Oxford University public policy researcher, said: 

"This newly presented analysis by We Own It highlights the huge scale of NHS outsourcing, which has been rising consistently over the last two decades. The latest academic evidence, in part produced by me and my colleagues at the University of Oxford, suggests this is a concerning trend for quality of care - as for-profit provision of NHS services is linked with worse patient outcomes, including higher mortality rates. 

“Were a new government to prioritise the best quality healthcare, then they may want to reconsider the NHS' ongoing privatisation."

Prof Christine Cooper, professor of Accounting at the University of Edinburgh, said:

“The We Own It empirical analysis and plan for a Labour government not to renew private NHS contracts are entirely sensible and workable. The rationale presented in support of privatisation was that the provision of public services by the private sector would mean better, more efficient services at lower cost and investment to modernise old-fashioned systems.

“The evidence suggests that measures to bring back outsourced contracts would enable better public services at lower cost. Whether to outsource to the private sector is no longer a question of ideology, it is a question of economic interest and empirical evidence.”

End notes:

  1. This analysis includes only contracts for services such as clinical services, non-clinical services such as cleaning and catering, and other services that the NHS already does in some parts. It excludes NHS outsourcing contracts for which no start and end date has been indicated in the Tussell dataset. Additionally it excludes contracts for products such as when NHS bodies purchase ventilators or phones. It also excludes contracts for works such as Liverpool University Hospitals NHS Trust’s Lift Replacement Programme. This analysis also excludes contracts marked as “Not applicable” and “Not Specified” such as contracts between NHS bodies and Royal Mail to deliver correspondence to patients. Finally, this analysis excludes NHS outsourcing contracts for the NHS in Wales, Scotland and (Health and Social Care) Northern Ireland.
  2. The next parliament is scheduled to be inaugurated on the 9th of July but we assume that the new government begins to take effect as soon as the election results are called on the 5th of July.
  3. The difference between the total value of the contracts Labour is set to inherit (£28.3 billion) and the total value of all current outsourcing contracts (£30.9 billion) is the value of the 1716 NHS outsourcing contracts that are expiring between now and when Labour takes office (£2.54 billion)
  4. The profit estimates are derived using Moody’s Bureau van Dijk. 
  5. We are assuming an average salary of £37,000 per annum -
Protesters in Parliamentary Square with the message "NHS Privatisation Kills"

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Tim replied on Permalink

Take privatisation out of NHS and insource public services

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