new health · 2007. 8. 5. · health workers and local ser-vice users, by establishing elected...

HEALTHBulletin of Hands Off Our NHS * No.58 * Autumn 2003

EEMMEERRGGEENNCCYYINSIDE

A SPECIAL12-page20thanniversaryissue

Oxfordcouldbe eyeof newstormagainstDTCsStaff at Oxford�s EyeHospital, situated in thecity centre RadcliffeInfirmary, have decidedto mount a campaign todefend its servicesagainst possible cutsand closures.

The threat to the spe-cialist service which cov-ers a wide catchmentpopulation throughoutthe Thames Valley stemsfrom the announcementof plans to open a new,privately-run Diagnosticand Treatment Centre todeal with over 7,000 dayand outpatient cataractoperations over a 3.5year period � patientscurrently treated in theOxford NHS unit.

Under the governmentplans, the cash (around£750 per case) would fol-low the patients � leavingthe Eye Hospital with justHALF its current £5m ayear budget, but retain-ing the responsibility tocare for thousands ofmore serious and chroniceye conditions which donot offer easy profits tothe private sector.

The Eye Hospital hadalready put plans in placeto meet the govern-ment�s tough new targetson reduced waitingtimes, and the local Pri-mary Care Trusts havemade clear their prefer-ence to keep serviceswhere they are.

The decision on DTCshas been forced uponOxford from nationalbureaucrats at theDepartment of Healthbureaucrats, who havedemanded local healthchiefs toe the line.

Ministers have given acommitment to establishsome 26 privately-fundedDTCs, and is now insis-tent that cash must bediverted from existing

Mental health Trusts� cash crisis � p10(continued on page 2)

Market system, competition, privateproviders, Foundation hospitals �

THE VOTE AGAINST Foun-dation Hospitals at LabourParty conference was nofreak result. Ministersalready knew that their planto give the best-resourcedand best-performing hospi-tals even more resourcesand more freedoms at theexpense of non-foundationTrusts was highly unpopular.

Indeed the process ofestablishing foundation hos-pitals has already beendropped in both Sweden andin Spain after the first fewexperiments went sadlywrong.

The foundation Trust ideahas been opposed by organi-sations representing almostall sections of health work-ers, by other trade unions, bypatients� groups and by avast percentage of LabourMPs who are not on the min-isterial payroll.

This opposition isn�t opposi-tion to more local controland flexibility in the NHS: itcomes from the bitter experi-ence of NHS Trusts, whichthe Thatcher governmentinsisted were supposed todeliver precisely the sameresult.

And people are even morewary because the new Foun-

dations would be encouragedand empowered to act morelike private businesses �doing more deals with theprivate sector, competingwith other Trusts for con-tracts to treat NHS patients,and so n.

To open up the space forFoundation Trusts, ministersare effectively re-creating anew, competitive market sys-tem within the NHS. We aretold that this represents�modernisation�.

But markets aren�t newor modern: they have beenaround as long as capital-ism.

What was new was the

post-war concept of a pub-licly-owned, publicly-run wel-fare state, in which a rangeof vital services were effec-tively removed from the mar-ket � and run for the benefitof service users, providedfree rather than as commodi-ties sold for profit or personalgain.

A genuine modernisation ofthe NHS would build on thisfoundation, ensuring that thenew funds injected werespent in the most cost-effec-tive way within the publicsector � and moving towardsmore local control andaccountability.

This means empowering

health workers and local ser-vice users, by establishingelected health authoritiesand giving elected tradeunion reps a genuine voice inshaping policy at every level.

Foundation Trusts and mar-ket reforms head in theopposite direction, empower-ing accountants, bureaucratsand private profiteers.

Despite the bureaucraticcosts of the Thatcherite mar-ket-style reforms, the NHShas remained one of theworld�s cheapest to run.Plunging waiting times showthat where sufficientresources are put in, the sys-tem can deliver.

So why do ministers wantto drag us back to moreexpensive, discredited, old-fashioned market modelsmore suited to Victorian mill-owners than a 21st centurypublic service?

London Health Emergencyis now celebrating 20 yearsof campaigning to defendand extend the NHS:strangely it is us, and ourcolleagues in the unionsfighting for this principle whoare denounced as dinosaurs� when it is the so-called�modernisers� who are drag-ging us back to the failedsystems of the past.

BACK tothe future?

DTCs � p2

PFI p9

FoundationTrusts p5

LIFT � p12

Hear ALLYSONPOLLOCK andTONY BENN atLHE�s 20thAnniversarymeeting � see p3

Forward �or back?HealthSecretaryJohn Reid

Modernisation? These hospital support staff at Whipps Cross Hospital have had to stage strikes to persuade contractors ISSMediclean to break from Victorian working practices and agree to raise their wages to the level of NHS staff.

2 HHEALTH EEMERGENCY

Oxford Eye Hospital has beenworking to a plan of expandingits capacity to treat cataract andreduce waiting lists to 3 monthsby December 2004. Consultantspoint out that there is �no capac-ity gap in Oxfordshire � in factwe can demonstrate over-capac-ity�. A DoH document on Capac-ity Gaps last December made toreference to Oxfordshire.

Rather than providing extracapacity to treat additional

patients, the new DTC will trans-fer up to 50% of NHS cataractpatients into the private sector, athigher cost.

According to top consultants atthe Eye Hospital, the conse-quence is likely to be:

! Restricted ability to screenand treat patients with other eyeproblems, many potentially moresight threatening than cataract

! The Eye Hospital would beleft with a more complex and

expensive caseload! Withdrawal from outreach

clinics in surrounding towns(Banbury, Wantage, Abingdon,Bicester and Witney).

! A loss of specialist cornealdiseases services � meaningpatients will have to travel toLondon for treatment

! Questions over the viabilityof on-call services, A&E ser-vices and specialist services

! Training and research �

which requires a minimumcaseload � restricted, with thedanger of losing accreditation fortraining

! Impossible to recruit a Pro-fessor, undermining the aca-demic department

! No choice for patients,since the full DTC contractwould have to be paid for,regardless of how many treated

! Redundancies among nurs-ing, admin and other staff.

WHEN is a private hospi-tal not a private hospital?When it is an IndependentSector Treatment Centre �the coy new official gov-ernment-speak for a chainof 26 privately-owned andrun units previouslyknown as Diagnostic andTreatment Centres(DTCs).

But while 20 NHS-runDTCs have been quietlyestablished and are on courseto operate successfully, thekernel of the governmentplan, unveiled in 2000, was toallocate a substantial share ofthe routine elective (non-emergency) surgical and diag-nostic work to the private sec-tor.

Alan Milburn�s NHS Planalways centred on creating anew �partnership� with theprivate sector � the same pri-vate sector that routinelypoached NHS-trained nurs-ing and medical staff, andwhich �cherry picks� thepatients and the procedureswhich offer the most profits,leaving all of the costly, longterm and intensive treatmentto the NHS.

Milburn�s �partnership�began with the �Concordat�which proposed a greater useof private sector hospitals toprovide treatment for NHS-funded patients � siphoningcash from the budgets of theTrusts which were alreadystruggling to cope with localdemand.

It was grasped as a lifeline bya private sector which was car-rying vast numbers of under-used beds. A whole BUPAhospital in Redhill in Surreywas effectively hired todeliver treatment for NHSpatients � though the costs ofthis deal have never been pub-licly revealed: BUPA�s stan-dard costs for routine opera-tions are well above those inthe NHS.

But the private DTCs wereto be different: they were tobe new units, set up and runfrom the outset by the privatesector � and under the origi-nal specification, they weresupposed to bring all of thenecessary staff with them,making no demands on thelocal pool of qualified healthworkers. This meant thatmany of the corporations sub-mitting bids have been over-

seas or multinational compa-nies.

They were supposed toensure �additional clinicalactivity, additional workforce,productivity improvements,focusing specifically on addi-tional capacity.�

�It will be a contractualrequirement for providers todefine and operate a work-forces plan that makes avail-able additional staff over andabove those available to theNHS. � We recognise thatadditional costs may resultfrom our requirement for theindependent DTC to providestaff that genuinely add to theNHS workforce � We willrecognise these factors in ourevaluation of value formoney� (DoH GrowingCapacity). In fact none of thishas happened.

DTCs have now been toldthat they are free to recruit upto 70% of their staff from theNHS � potentially strippinglocal hospitals of the staff theyneed, and lumbering themwith sky-high bills for agencystaff to fill the gap.

The profit-seeking DTCswill scoop up a share of the

projected caseload of 250,000procedures a year whichwould be delivered in this way� 135,000 extra operations,and 115,000 treatmentsdiverted from existing NHSunits.

Their profits are guaranteed.The nationally-negotiatedcontracts are to be drawn upon a �play or pay� basis �meaning that the PCTs arerequired to pay the full con-

tract price to the DTCs overthe 5-year period, even if theNHS sends fewer patients fortreatment.

Of the preferred biddersannounced in September, fiveare from overseas � fromCanada, South Africa and theUSA, and two British.

They will treat only non-urgent cases where waitingtimes have been a problem,including orthopaedics (hip

and knee replacements), oph-thalmology (mainly removalof cataracts) and minor gen-eral surgery such as herniaand gall bladder removal.

The private units will haveno obligation in terms ofafter-care: and they will beable to fix their own termsand conditions: it is alreadyclear that they will be offeringconsultants four or five timesthe amount currently paid toNHS consultants.

While Ministers claimDTCs will be paid the samecost per case as NHS hospi-tals, it is clear that they willconcentrate on the most prof-itable and simple cases, leav-ing the NHS with an increas-ingly expensive caseload.

And the DTCs start-up costswill be subsidised � givingthem a greater chance of gen-erating a surplus.

Unlike NHS units such asthe Oxford Eye Hospital,where the revenue fromcataract operations helpsunderwrite the running costsof a department delivering afull range of services, any sur-plus created by DTCs willsimply be pocketed as profit

by shareholders.The opposition to the plans

has been widespread. Privatehospital chiefs are miffed thatnew units are being builtinstead of filling up theirexisting empty beds. Toryshadow health minister LiamFox has said the contracts aretoo expensive.

Almost all organisationsrepresenting health staff haveopposed the new private cen-tres: UNISON warned thatthey will drain resources andstaff from the NHS. The BMAhas said that the DTCs coulddestabilise the NHS.

The Association of Surgeonsin Training warned that thecentres could do lasting dam-age. Even the Royal College ofNursing expressed concernover staffing levels.

NHS units have responsibil-ity for training doctors andnursing staff, and need tomaintain a broad mix of rou-tine and more complex casesto ensure that junior doctorsgain the necessary experience:DTCs by creaming off a largeshare of the routine work willdisrupt this balance, whilesimply poaching the staffalready trained.

To make matters worse,despite the talk of an NHSPlan, the proposals for DTCshave run alongside govern-ment targets and pressure onlocal Primary Care Trusts andHospital Trusts to reducewaiting times to a maximumof 6 months by 2005. Therehas even been an injection ofnew funds into the NHS toenable it to expand its owncapacity.

Now, just as some of theseinvestments are starting todeliver, a small group ofbureaucrats at national levelhave announced where thenew private sector DTCs areto be. Only bankrupt BristolPCTs have been allowed toback out: other local healthcommissioners have beengiven no say: and in the caseof Oxford ophthalmic servicesthe PCTs that have objectedhave been slapped down.

UnderordersDepartment of Health bureau-crats have shown no sympa-thy with the problems facinglocal Trusts and PCTs.

A stiff circular dated August 21tells them they have less than amonth to tie down any unre-solved problems and sign up forthe new DTCs.

As if to reassure them, the cir-cular insists that it is not truethat the ophthalmic surgeons towork in DTCs will be paid£450,000-£500,000 per year�as some clinicians havedecided to assume when read-ing the pricing proformas andspreadsheets�.

�These staff costs include theadd on costs such as pensions,admin, travel, etc.�

In other words the package forthese doctors will be very closeto £450,000. �In reality the oph-thalmic surgeois are probablypaid more than those currentlyin the NHS but they work a lotharder for it�!

The Oxford crisisNew private DTCis not needed!

The companies set to coin itin from 5-year contracts torun DTCs are:

# Mercury Health Ltd � a British based company (9 centres)# Birkdale Clinic � British-based private clinic, gets one

centre at Daventry# Anglo Canadian � 3 clinics in London# Nations Healthcare � a US-led consor-

tium (2 centres in Bradford)# New York Presbyterian � 2 centres,

Stanmore and Somerset# Netcare UK � a South African company �

will run a centre in Manchester and two mobileophthalmology units

# Care UK Afrox � a link-up between Care UK, which runsnursing homes, and Afrox, a British Oxygen subsidiary run-ning 60 private hospitals in South Africa �3 centres.

DTCs: turningyour NHS into anice little earner

NHS services in order toguarantee 5-year con-tracts with the private cor-porations running theDiagnostic & TreatmentCentres and other Private-Public initiatives.

Angry health workersresponding to the attackon the Eye Hospital haveagreed to build a big pub-lic campaign in Oxford toincrease pressure on thegovernment - targetinglocal MP and cabinetmember Andrew Smith inparticular - to force themto back off on their privati-sation project.

The campaign will initiallybe based among workersin the Eye Hospital with ameeting on October 9,which it is hoped will plana big public meeting and

Oxford EyeHospitalfight(from front page)

HEALTH EEMERGENCY 33

With Community HealthCouncils due to close inDecember, and many CHCstaff leaving early to findalternative jobs, the plansfor the government�s alter-native structures to replacethem are a total shambles.

A recent survey of the so-called �Patient Advocacy andLiaison Services� (PALS)across the country showedthat less than a third couldoffer an immediate and satis-factory response to even asimple patient enquiry.

Of 100 Trusts whichclaimed to have a PALS ser-vice in place, in only 87 didthe switchboard connect acaller correctly to the PALSservice. Only 51 of these calls

were answered by a personrather than an answerphone:and of these only 28 couldanswer the simple question.

Trusts are only obliged tofund a minimum of onemember of staff in a PALSservice � well short of theextensive and professionalsupport available from thebest CHCs.

Meanwhile the establish-ment of a network of newPatient and Public Involve-ment Forums, to be set up inlocal Primary Care Trusts, isonly just getting under way,with a half-baked campaignboasting chicken whichdemands �make time forhealth�.

They won�t need to make

much time:FoundationTrusts willnot havePPIFs, and sinceall Trusts are allegedly goingto be Foundations within fiveyears, they will probably havea shelf life not much longerthan real chickens.

# Meanwhile the BoyScouts are among the rag-bag of 140 voluntary sectororganisations that havebeen given contracts toprovide admin support forthe new PPIFs.

Others include CitizensAdvice Bureaux, charitiessuch as Age Concern and anew organisation formed by a

formerCHC chief executive.

�Scout Enterprises WesternLtd� will provide services for20 PPIFs in southern Eng-land.

Camp fires and woggles willno doubt be available ondemand, while ministers areleft to grip the NHS by theging-gang goolies, and healthworkers struggle by on littlemore than a Bob a Job.

Confusionreigns asministersaxe CHCs

IN ANOTHER example ofchaos in the NHS, itappears that capacity forheart surgery has expandedfaster than demand � leav-ing some highly expensivesurgical units searching forpatients.

Waiting times have fallen asmore resources have beenpumped into the NHS, reduc-ing numbers waiting morethan six months for heartsurgery from over 4,000 twoyears ago to just 375 thissummer. By December it islikely to be zero.

In London the 95-bedHeart Hospital, controversiallybought from the private sec-tor by University College Lon-don Hospitals Trust, has runout of work: UCLH bossesrecently volunteered to treatthe entire national cardiacwaiting list over 6 months.

The success story on slash-ing waiting lists combineswith a longer-term problemas ministers once againreject any concept of plan-ning and instead carve upthe NHS into a �market� ofcompeting units slogging it

out for contracts.New medical treatments

have reduced the need forheart surgery: but at thesame time new resourceshave increased capacity.

It makes no sense to havestaff in specialist units twid-dling their thumbs � but evenless sense to press relent-lessly forward with market-style reforms that promisemore of the same.

Down the road from theempty cardiac beds at UCLH,health chiefs are planning thecountry�s first £1 billion hos-pital development � whichwill also offer heart surgery,combining the Royal Bromp-ton and Harefield hospitals.

Perhaps somebody from theDepartment of Health shouldhave a word about theirdodgy prospects before theysign on the dotted line?

Cardiacchaos!

Merton &Sutton TUC

# Fighting to defendfull services at bothEpsom and St HelierHospitals

# Congratulations toLondon HealthEmergency on 20years campaigningfor the NHS.

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President: MAISIE CARTERSecretary: KEVIN O�BRIENTreasurer: HILDA WETHERELL

PAT MCMANUS, BranchSecretary 07818 064152or UNISON Office NPHExt 3960

at CMHSHARON ROBINSON,Branch Chair07977 222483PETER IZEKWELeader Black members 07958 681556

FRANK CONWAY07929 989051STEVE SAVAGE ACAD

at NPHDEREK HELYAR, BranchTreasurer/Health & SafetyLong range pager 07659 110953Internal bleep 015Mobile (9am-7pm) 07740 766244

SHARON SOUTHWOODMembership SecretaryVia switchboard �0�Mobile 07753 750465

CATHERINE THOMASMobile 07931 778148

MAUREEN JARRETTExt 4022Mobile 07958 317568

the public service union

Your UNISON team at NWLHospitals NHS Trust

To join UNISON callUNISONdirect on 0845 3550845

text 0800 09679686am-midnight Monday-Friday, plus 9am-4pm Saturday

North West LondonHospitals UNISONcongratulates LondonHealth Emergency on20 years of campaigningto defend our NHS.

The successful 1994-5 fight to save the A&E at Central Middlesex was part of a London-widecampaign backed by London Health Emergency


CONCERN is growing amongcouncil chiefs whose socialservices face fines if theyfail to deliver additional ser-vices to facilitate the swifterdischarge of frail olderpatients from hospital.

The latest estimate sug-gests that 3,500 of thefrailest older people agedover 75 are currently trappedin acute hospital beds forlack of suitable alternativeaccommodation or supportingservices.

Many of these patients havecomplex needs, requiringnursing home care.

The new fines are operatingin �shadow� form from Octo-ber, and due to come intoforce in earnest from January2004. Councils will have topay a daily fine of £100(£120 in London) for anyperson who has beenassessed as ready for dis-charge from hospital but notfound a place in a nursinghome within three workingdays.

Councils have been givenjust £50m nationally to allowthem to expand preventiveservices and also to secureadditional accommodation �and ministers claim thatmany should be able to payless in fines than they receive

in grant. However the fact that nurs-

ing homes are in the privatesector, and mostly run forprofit, means that neithercouncils nor the NHS canfully control the numbers ofplaces.

Far from opening moreplaces, many nursing homesare closing down and sellingup, while others are holdingout for increased weekly feesfrom councils for the clientsthey accept.

Analysts Laing & Buissonestimate that more than13,000 nursing home placeshave closed in the last 15months, leaving the countrywith 74,000 fewer placesthan in 1996. Some councilsin areas of severe shortagesare reportedly investigatingthe prospect of openinghomes themselves.

In Suffolk, nursing homesproprietors, spotting their bar-gaining strength in the new

situation, are demanding anincrease of £35 on the cur-rent council �benchmark� feeof £385 per week: in Norfolkthe demand is for an extra£20 per week. And nursinghomes are weighing up thechances of playing off NHSTrusts against social servicesdepartments to bid up thegoing rate.

The problems have beencompounded by the lack ofinvestment in modern infor-mation systems, facilities,and sufficient social workersto support the �single assess-ment process� that is sup-posed to bring together rele-vant professionals � socialworkers, nurses, therapistsand housing officials � togauge patient�s needs andprepare the process of dis-charge. # Meanwhile members ofthe Royal Commissionwhich three years ago rec-ommended the abolition ofall charges for older peoplereceiving continuing care innursing homes in Englandhave reiterated their call onthe government to imple-ment this policy in full: atpresent clients receive onlylimited nursing care fundedby the NHS, while �socialcare� is still subject tomeans-tested charges.

Nursing home bossess bidto jack up fees

Social services bracedfor �bed-block� fines

IF AN AGENCY nurse startsasking patients �do you wantfries with that?� they mayhave taken their tone fromthe new chief executive ofthe NHS in-house agencyNHS professionals.

Carmel Flatley who has justtaken on the job is a formervice-president of burger chainMcDonald�s. Ironically it is theburger bar-style rapid turnoverof nursing staff in the NHS thatcreates the growing need foragency staff.

NHS Professionals has had arocky start: it claims to have47,000 staff on its books, butin some areas it has becomenotorious for failing to deliverstaff as promised.

Its Yorkshire division, runbizarrely by West YorkshireMetropolitan Ambulance Trustwas found earlier this year tohave run up debts of £10m.

Maybe it�s just time for theNHS to �go large� and �max�the pay of in-house staff and tooffer staff overtime rates,rather than resort to morecostly and chaotic use ofagency staff?

HAMPSTEAD�S Royal FreeHospital Trust is staring downthe barrel, with a projectedyear-end overspend of £4.5m,even after implementing a cutspackage.

Among the measures already

put in place to bridge the spend-ing gap, Trust bosses haveagreed to dip into capital fundsto switch £1.75m to revenue,and negotiated additional £1mhandouts from the StrategicHealth Authority and the localCamden PCT.

Cuts which might reduce thedeficit to £3.5m had been identi-fied by September, but financechief Peter Commins warns thatfurther cuts totalling £2.2mwould hit patient care, or in thejargon of today�s NHS �themajority would have a seriousimpact on access targets�.

EALING council in west Lon-don has run up an estimated£5m overspend on its socialservices, driven by factorsincluding above-inflationrises in nursing home fees.

A package of service cutsand increased charges is beingimposed.

Ealing PCT is struggling toresolve a £6m deficit in itscommissioning budget, whichcould have a major impact ontherapy services and commu-nity nursing.

Neighbouring HammersmithPCT is facing a £5m shortfall.

THE FINANCIALLY and man-agerially-challenged Barnetand Chase Farm HospitalsTrust is trying to placate a ner-vous local public as it seeks to�rationalise� hospital servicesacross a sprawling and con-gested catchment populationin NW London.

The Trust needs to clear amassive inherited debt andimprove performance: but Trustbosses want to replace ChaseFarm with a new PFI-fundedhospital, while avoiding �dupli-cation� of services at Barnet, 5miles away.

Barnet General hit the head-lines in the mid 1990s when itsPFI-funded Phase 2 rebuildforced the controversial closureof Edgware General Hospital asan acute unit.

BOSSES at Hillingdon Hospi-tal, west London have beenforced to board over a garish30 foot long yellow orangered and pink mural paintedon the wall in the hospitalentrance � costing £25,000.

One female consultant com-plained that it gave her aheadache: others have beenoutraged at the cost of the art,which is strongly reminiscentof graffiti routinely scrubbedoff the carriages of tube trains.

CARILLION has won the con-tract to build a new 1,200-bedPFI hospital in Portsmouth.Though the final deal has notyet been concluded, the pro-ject will cost a minimum of £1billion over the next 33 years.

NewsBRIEF


The essentialpoints aboutFoundationTrusts# Foundations will �opt out� of control by strategic healthauthorities and the Secretary of State.# This is part of a wider market-style reform.# The first wave is expected to begin with up to 29 Foun-dations, but all Trusts are promised the right to opt forFoundation status.# Foundations will be �not for profit� companies (or �pub-lic interest companies�): this opens the possibility of pri-vate �non-profit� organisations (such as BUPA) bidding forFoundation status.# Foundations will nominally be run by a Board of Gover-nors, but in reality control will remain in the hands of theunelected Management Board, which will be composed ofexisting and new full-time directors.# Funding for foundations and for other Trusts will bedependent onwinning con-tracts from Pri-mary CareTrusts, on thebasis of workdone (on theprinciple of the�cash followingthe patient�) �giving anadvantage tothe best-resourced Trusts, but also pushing Foundations into com-petition with neighbouring Trusts.# Foundations will be obliged as businesses, and to bal-ance their books.# Foundations will in theory not be allowed to expand pri-vate medicine, although some are already rushing throughexpansion plans before they get Foundation status, andothers are looking to work with private medical companies.# Foundations, like Trusts will be free to retain surpluses,but Gordon Brown has pointed out that the governmentwould ultimately be obliged to step in and bail out anyFoundation that ran up huge losses.# Foundations will be free to fix local pay and conditionsfor staff, replacing national pay scales, although they areall likely to begin next April from the framework of the newAgenda for Change system, which ministers want to oper-ate throughout the NHS from the end of 2004. # Original plans giving Foundations freedom to borrow inthe private markets were effectively abandoned. Insteadtheir right to borrow will be subject to the decisions of anew �independent� regulator.# Any borrowing by Foundations will be from the totalcapital available to the NHS, so any preferential treatmentfor them will be at the expense of other Trusts.# Foundations will be subject to a �lock� on their coreassets, preventing them from selling them or using themfor non-health purposes without permission from the newregulator. Nor will they be allowed to mortgage theirassets.# Foundations will have no shareholders to distributeprofits to, but are expected to work in an �entrepreneurial�way � and are free to work �in partnership� with privatecompanies which can generate profits and give them toshareholders.

The rush to launch foun-dation hospitals is underway � even though theleading candidates arestill in the dark over howthey are supposed torun the new enterprises,or how much moneythey will be able to bor-row.

One of the main sellingpoints among the �free-doms� of foundationTrusts was the idea thatthey would be free to bor-row money either withinthe NHS or from the pri-vate sector.

But when the Depart-ment of Health eventuallypublished the formula onwhich the foundationscould calculate how muchthey could borrow, therewere howls of disappoint-ment in the boardrooms:the totals were universallysmall, and in one casezero, according to theHealth Service Journal.

Foundation borrowingwill also be strictly con-trolled by a new regulator,who will have far morepower over their decisionmaking than any of thetokenistic local bodies.

Managers are expectingthe regime to be tough,and some are alreadyplaying down the borrow-ing issue, expecting to getlittle or nothing.

There are even fearsthat the regulator mayconclude that the finan-cial position of up to halfof the potential first-wavefoundation hospitals istoo rocky for their appli-cation to go ahead: asfew as 15 may make thegrade.

But nobody knows. Thecode that will govern theregulator�s actions will notbe published until afterthe legislation establish-ing the new post hasbeen carried.

Trusts applying for foun-dation status are there-fore buying a pig in apoke: they don�t knowwhat they will gain, orwhat conditions they willneed to satisfy to gainanything at all.

Bosses at University CollegeHospital, London have beentrying to placate local opposi-tion from Camden residentsand MPs from the surroundingarea (including foundationtrust opponents Frank Dobson,Glenda Jackson, Jeremy Cor-byn and Chris Smith).

Chief Executive Robert Naylorwent so far as to promise ameeting of Camden PrimaryCare Trust that the hospitalwould not undercut neighbour-ing hospitals (such as the RoyalFree and the Whittington) orpoach staff.

As puzzled listeners scratchedtheir heads to work out whyUCLH wants Trust status if not

to beat the local competition,Naylor went on to argue that itwould not be in the hospital�sinterests to draw more patientsin to the hospital.

Is this the same Robert Naylorwho was recently offering totreat the whole of the country�swaiting list for cardiac surgeryin a desperate effort to fill bedsat the Trust�s Heart Hospital(see page 3).

SurvivalThe reality is clear, no matter

how much managers may denyit: foundation hospitals will beforced to compete with otherNHS hospitals for staff, forpatients and for revenue if they

are to survive. That�s what foun-dation status is all about.

And foundations will beginwith an advantage, since theywill be free to vary pay toattract extra staff, and will haveadditional powers to borrow �and to pick and choose the ser-vices they wish to market withinthe NHS.

Mr Naylor has been one of theNHS bosses pushing forwardthe move to foundation status,and making it clear that UCLHwill seek deals with the privatesector is their bid succeeds.

His two-faced story for localconsumption simply demon-strates how much he has tohide.

NNoott ssuucchh aa bbiigg ddeeaall??Just 7% of NHS chief executives think foundation hospitals willbe the most important policy change in the next five years,according to a Mori poll.

However two thirds of them thought foundation status woulddamage cooperation within the NHS, and almost half thought itwould result in more freedom for managers.

The survey for the NHS Confederation put foundation status atthe bottom of the list of important changes, which was topped bythe Patient Choice policy.

The biggest management challenge was seen as achievingfinancial stability.

Not only do foundationtrust applicants not knowhow much money they mayborrow, they still don�tknow how they will run thenew set-up, which minis-ters have claimed wouldinvolve thousands of localpeople becoming �mem-bers� � possibly at a fee of£1 per head.

The Co-op Party, which hasargued that foundations arenot a step on the slope to pri-vatisation but trail-blazing�mutuals�, has suggestedmemberships could reach ashigh as 50,000.

With some teaching hospi-tals drawing on a catchmentpopulation as high as 2.5 mil-lion, even this many memberswould be a small sample.

But UCLH boss Robert Nay-lor has argued that the £1 permember system would beimpractical and is likely to bedropped � but failed to answerhow the Trust would select agoverning council of 40-60local people and service users.

According to the Health Ser-vice Journal, his chair, PeterDixon, has warned that the

Trust could wind up �choos-ing between the HampsteadHeath Conservative Societyand the local Trotskyists�.

The Chair of Birmingham�sUniversity Hospital Trust hasdismissed the idea of a 5,000-strong �membership� for eachTrust as �an absolute night-mare�.

One of the architects of thefoundations policy, Ed Mayoof the New Economics Foun-dation told a workshop thatTrust bosses who wanted thefreedoms offered to founda-tions should �go for as smalland token a membership as

you can.�In any event fresh questions

over the value of membershipand the so-called democraticelement of foundations havebeen raised by the govern-ment�s response to a criticalreport from the CommonsHealth Select Committee.

Ministers make clear that theboard of governors would haveno power to veto any actiontaken by a foundation Trust�sdirectors, and will �approve�the appointment of the chiefexecutive.

The governors will only electthe chair and the non-execu-tive board members.

This has caused a flutter ofanxiety among existing Trustchairs and non-execs con-cerned that they may losetheir appointed seats � and thesalaries and vol-au-vents thatgo with them � if they areforced to stand for election ineven the most limited publicforum.

Interestingly given all therhetoric about increased localaccountability, foundationTrusts � unlike other Trusts �will not be required to runpatient forums.

Doubtsovernewrightstoborrow

So much for all thattalk about democracyand local control �

It�s all about anew NHS market

No it�s not the finances,it�s the level of publicsupport for foundations

Markets may be OK for your fruit & veg and the odd Russian camcorder: but health care?


LHE: 20 yearsin the forefrontof campaigning

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

You can pack a lot in to 20 years � and the pace was often frantic as LHE set out to makeitself useful to local campaigners and union activists across the country.

We have too little time and space here to do more than refer to some of the landmarks intwo decades during which LHE, working with a crucial cross section of union activists, MPs,councillors, pensioners and campaigners helped set the agenda and challenge every attackon the NHS and its underlying principles.

Our thanks go out to all those who have supported LHE, and helped us survive the variousand repeated attempts to close us down. We hope we have sufficiently repaid the favour.

Maudsleyhospitalstaff stagesuccessfulstrikeagainstcuts

Health Emergencypaper launched asa monthly,circulation 14,000

Barking Hospital strikeleads a wave of strugglesagainst privatisation ofancillary services

London HealthEmergencyformed withGLC funding tolink campaignsand raiseprofile

Exposee pamphlet�I was a Mole inMediclean�published

London-widedemonstrationorganised by LHE,June 29

ChancellorLawson�sbudget triggerswave of hospitalclosures andoccupations

200 attend LHEconference on fightingprivatisation, backed byall main health unions

Strikes againstprivatisation acrossthe country

LHE publishesLondon round-up"Hitting the Skids"- Health ServiceJournal comments: "The picturepresented byLondon HealthEmergency is ofcourse presentinga picture of an area which does notexist in the health service. TheLondon area on which it bases itsfigures is simply the innermostdistricts of the four Thames regions. �However there is a growing beliefthat the type of analysis offered byLHE is rapidly going to becomewhere the goal posts will be placedas far as the London debate goes."

Winter 1987: LHE�s consultants�petition against cuts backed by1,200 doctors in 160 hospitals

Save West LondonHospital (SWEL)campaign launched

Night nurses inManchesterwalk out inunofficial strikeover pay.Followed byunofficialstrikes inLondon andaround thecountry

LHE February 3 Rally draws over 1,000health workers and campaigners to theCamden Centre

LHE warns new GriffithsReport on �CommunityCare� heralds moreprivatisation and means-tested charges

Thatcher unveils WhitePaper setting outmarket-style �reforms�:LHE launches �HandsOff Our Hospitals�campaign, with slogan�Tear up the WhitePaper�

Ambulancepay disputedrags onfor over 6months

Campaigns across the countryoppose hospitals �opting out�to form the first wave of Trusts.LHE distributes thousands ofleaflets, stickers, car stickersand pamphlets

Detailed LHEdrafted reply tohospitalrationalisationplan stirs debatein Barking andHavering

As ministersrubber stamp57 Trust opt-outs, LHEpamphletanalysing theirdodgy financesgets nationalpress coverage

Detailed surveyof mental healthservices forhealth unionCOHSEhighlights gapsin community-based care as beds close

LHE works with WestBerkshire campaignersto fight closures ofNHS geriatric beds

LHE opposesKing�s Fundcall to axe5,000 beds inLondon�shospitals

LHE infuriatesgovernmentby leaking keyfindings ofTomlinsonReport tonational press the nightbefore publication

LHE and unions launchLondoners NeedLondon�s Hospitalscampaign to fightTomlinson proposals toclose ten hospitals and4,000 beds

GLC abolished: LHEfunding eventually takenon by a consortium ofLondon boroughs


1993

1994

1995

1996

1997

1999

2000

2002

1998

20032001

VirginiaBottomleypublishes plansto closehospitals overand above theTomlinsonclosures:campaignstepped up to defend CharingCross and Barts Hospitals

LHE reports highlight thethreat to casualty servicesacross the capital fromhospital closures

TUC stages nationaldemonstration onNovember 20: NHSEmergency Day

Edgware Hospitalcampaign commissionsLHE to produce 50,000tabloid newspapers inhuge community-widemobilisation againstclosure

Guy�s Hospital cam-paigners marchagainst closure

LHE drafts AcuteConcern,challenging hospitalclosures andrationalisation, onbehalf of tencouncils throughoutHertfordshire

Government publishes new EligibilityCriteria for continuing care designedto exclude hundreds of frail olderpatients from NHS beds

Hands off London�sHospitalsconferenceconvened by LHElinks campaignersacross capital.

LHE draftsdetailedanalysis ofEligibilityCriteria andlocalimplicationsfor UNISON branches andregions in Cambridge, Suffolkand East Midlands

LHE steps up campaigning andpublicity work on the PrivateFinance Initiative: althoughintroduced in 1992, it has not yetfinanced a new hospital, butbrought building programme to ahalt.

General Electionbrings welcomeousting of Tories:LHE offersassistance andadvice to newLabour ministerialteam � no reply.Labour councilsbegin to withdrawremaining fundingfrom LHE. Torycash limits still inforce.

The CredibilityGap: LHEsurvey of thecapital�s mentalhealth services,published byUNISON London Region

LHE works withUNISON andcampaigners to fighthospital closures andrationalisation inWest Hertfordshire

LHE helps adviseEdgware Hospitalcampaignerspressing for newCommunityHospital withoutPFI involvement

50th Anniversary of NHS:Health Emergencyproduces special full-colour issue.

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LHE researches CastingCare Aside, Wyre Forestcouncil�s response toWorcestershire PFI schemethat could axeKidderminster Hospital in-patient care.

6,000 march throughCanterbury to opposeplanned cuts in East Kent

LHE drafts Red Alert �report for Save OurCommunity HospitalServices in Oxfordshire

Royal Commission reportson care of elderly,proposing care should befree at point of use, fundedfrom taxation. Ministerssilent

The Care Gap:UNISONLondonconference onmental healthpublishes LHE-drafted reportand mental health workers�charter

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LAS SOS: LHE researchescampaigning broadsheetpressing for an extra £30ma year to fund the LondonAmbulance Service.

Dudley Hospital workersend long series of strikesagainst transfer to privatecontractors under PFI:projected cost of schemedoubles to £135m.

First PFI-funded hospitalopens in Carlisle �immediately beset bystructural problems andbed shortages

NHS Plan published,outlining 10-year plan toexpand and improveservices using large year-byyear increases in funding.LHE welcomes extra cashbut warns almost all newhospitals to be built usingPFI � boosting costs.

LHE interviews staff innine PFI hospitals forUNISON pamphlet ThePFI Experience: Voicesfrom the Front Line

Second massdistribution broadsheetfor health branch ofUNISON opposingPeterborough PFIhospital scheme

LHE researches dossieron PFI in the NHS forGMB

Health Secretary AlanMilburn pushes forwardwith plans for FoundationTrusts � and then resigns

LHE researches majorreport on CentralManchester hospital PFIfor Community HealthCouncil

LHE interviews staff atSwindon�s GreatWestern Hospital forUNISON pamphlet onPFI

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LHE�s Fact Sheet onAgenda for Changedistributes 50,000copies to various unions.After heated debate,UNISON andAmicus/MSF voteoverhwelmingly in ballotto allow earlyimplementers toproceed and decide in2004

Carlisle�s Cumberland Infirmary: a smart new entrance �right next to the portakabin to supply extra beds


Congratulations toLondon HealthEmergency on 20years campaigning:! Against all cuts andclosures in the NHS! Against privatisation! Against PFI! For a publicly-owned, publicly fundedhealth service! For respect to all sections of staff in theNHS health care team WHY NOT drop in to this

Workers Beer CompanyFree House for a relaxedatmosphere, fine beers, anexcellent menu � and goodcompany?68 Clapham Manor StLondon SW4 6DZ020 7498 1779

Battersea & Wandsworth TUCand the Workers Beer Company

Organising Centre 020 8682 4224www.respectatwork.org.uk

From the �nasty borough� � the frontline of the fight against privatisation


NHS chiefs throughoutGreater Manchester willhave to choose whether tobuild and refurbish thearea�s hospitals and healthfacilities � or whether tomeet national targets andNational Service Frame-works laid down by thegovernment.

If they attempt to do both,then even the extra moneythat is being allocated to theNHS under government planswill fall short of requirements,plunging local Primary CareTrusts into deficits whichwould add up to almost £100min 2005-6, and peak at over£160m in 2008-9.

The cumulative shortfallacross Greater Manchestercould reach a staggering£732m by 2010.

That is the grim messagefrom a confidential survey ofthe costs and implications ofover 40 capital projects, with atotal estimated cost of over£1.1 billion that are currentlyat various stages in the plan-ning process. The survey, car-ried out by business consul-tants for Greater ManchesterStrategic Health Authority,was leaked to London HealthEmergency.

The SHA obtained reportsfrom all the project teams atwork in the area on the rev-enue consequences of each oftheir schemes (which range insize from the giant £422m hos-pital complex in CentralManchester, a £190m bundleof projects in Salford, and anew £150m hospital in Stock-

port, to small scale additionsof wards or operating theatrescosting £5 million and less) �and the varying cost of eachplan for each of the area�s 14Primary Care Trusts.

This has been set against aprojection of the likelyincreases in funding for each

PCT, and the known pressureson the PCTs� budgets arisingfrom cost inflation, existingcommitments, and futureplans and targets.

The SHA concludes thatGreater Manchester will haveunallocated growth moneytotalling £18m this year, risingto £120m in 2009-10, but thatthe cost of the capital schemeswill outstrip this new moneyeach year, creating a steadilyworsening crisis. It warns:

�Capital investment aspira-tions unaffordable both shortand long-term, despite signifi-cant revenue growth. �Choices need to be madebetween capital schemes, NSFplans and other investments.�

Commenting on the find-ings, LHE�s InformationDirector John Lister said:

�This disastrous scenario inManchester shows the folly ofgovernment policy, whichafter decades of drastic under-investment in hospitals andcapital assets is now expectingTrusts to pull themselves upwith their own boot-strapsthrough the Private FinanceInitiative, which lands thewhole cost on Trusts� revenuebudgets.

�This report confirms thatPFI schemes like the newCentral Manchester hospitalcomplex cannot be affordedwithout wrecking other ser-vices in the area.

�Gordon Brown is balancingthe books today by stackingup problems for years to come.He should inject governmentcapital to fund these newinvestments.�

Birmingham && CCoventry BBranchNational Union of Journalists

PFI projects push up bill to £1 billion:

Manchester faces upto �unaffordable�capital programme

St Mary�s Hospital cheifexecutive Julian Nettel isgamely whistling in the darkas the cost of the controver-sial scheme for a privately-financed hospital complex inPaddington, to house theservices from Harefield Hos-pital and the Royal Bromp-ton has almost trebled to£1 billion from the previouspublished estimate of£360m.

An increased estimate of£800m came in a PressRelease from the PaddingtonHealth Campus Project, whichclaimed that the scheme hasbeen endorsed by HealthMinister John Hutton.

New government guidelineshad required the originalplanned floor area of the hos-pital to be expanded by up to20%.

But this brought the planinto conflict with WestminsterCouncil�s Planning Depart-ment, which sent ProjectDirector Nigel Hodson adetailed 6-page response out-

lining a long list of objectionsto the proposals, whichinclude adding 3 extra floorsto parts of the planned build-ing . Complying with theCouncil�s requirements couldcost an extra £7m a year forrenting additional office spacefor the next 35-years.

The council also made itquite clear that any revisedplans will need to go througha fresh planning application,while some aspects of thecurrent proposals �could beimpossible to justify in plan-ning terms�.

Figures leaked during thesummer to London HealthEmergency had indicated thatthe disaster-prone plan wasfacing an estimated £43 mil-lion per year �affordabilitygap�, which threatens tosqueeze budgets for primarycare, community and mentalhealth services in the sur-rounding area.

Gloomy Trust bosses werelast year questioning whetherthe new hospital, originallyprojected for 2008, will nowbe open by 2011 � if at all.The eventual costs � and thus

the affordability � of thescheme are equally unknown:bids from potential PFI con-sortia have just been invited.

JEAN BRETT, chair of theHeart of Harefield campaignto keep the hospital open,said �It is clear that theseplans are not only undesir-able, in that they would breakup the established specialistteam at Harefield, but alsocompletely unaffordable.

�Even if the architects canfind ways of satisfying West-minster�s planning team, thecapital cost of this scheme islikely to be closer to £1 bil-lion. We want ministers tothink again.�

JOHN LISTER, InformationDirector of London HealthEmergency, said:

�This scheme has beennothing more than a succes-sion of ever-more expensiveblunders from start to finish.

�Every extra day that goesby adds to the costs ofaccountants, consultants,architects and advisors: min-isters must call a halt rightnow to this waste of taxpay-ers� money.�

More expensive than theDome: £1 billion price tagon Paddington PFI folly

THE SHAMBLESbehind the glitzy glassfacade of Swindon�s£132m PFI-funded GreatWestern Hospital, whichopened last December isinvestigated in a newUNISON pamphlet, justpublished as we go topress.

Researched for the unionby John Lister of LHE, thepamphlet � Not So Great �consists of an overviewintroduction, followed byinterviews with front-linenursing, clerical and sup-port staff.

The poor terms and condi-tions on offer to staff fromCarillion, the company pro-viding domestic, porteringand catering services in thenew hospital underline thewider problem of the 2-tierworkforce created in thefirst-wave PFIs.

The new pamplet followsthe successful formula ofVoices from the front-line,

published by UNISON ear-lier this year, which exam-ined conditions and stan-dards of care in 9 first-wavePFI hospitals.

In each case the questionmarks over the quality andvalue for money of supportservives is echoed by prob-lems with the size of thebuilding, its design and thepoor quality finish to thefabric of the new hospital.

Despite early claims bysupporters of the PFIscheme that a new purpose-built hospital wouldimprove efficiency com-pared with the outdated,much-extended and alteredPrincess Margaret Hospitalit replaced, the Great West-ern is too small, and relieson portakabins and rentedspace in a supermarket foroffice space: it is currentlybuilding a number of exten-sions and add-on facilities.

# Copies of both pam-phlets available from UNI-SON or from LHE.

UNISON pamphlet onSwindon PFI hospital

Not sogreat!

The £420m PFI project for anew hospital complex for Cen-tral Manchester hospital andManchester Children�s Hospi-tal Trust has been put on holddespite reaching Final Busi-ness Case stage.

PCTs in Greater Manchesterpulled back from endorsing thescheme in the light of the shck-ing figures in the SHA report(above) and after circulation ofa detailed analysis of the FBCresearched for Central Manch-ester CHC by London HealthEmergency. This underlined themounting costs of the 38-yearindex-linked PFI deal, whichwould start with payments of£48m a year, but cost a total ofmore than £3 billion.

# A NEW formula for cal-culating the comparativecost of PFI deals against atheoretical �public sectorcomparator� would havemeant none of the firstdozen PFI hospital wouldhave go the go-ahead asvalue for money, accordingto former ministerStephen Byers. # The new formula isincluded in a Treasuryreport PFI: meeting theinvestment challenge,an alternative to the�review� of PFI demandedby last year�s Labour Con-ference. The documenttrots out the same staleold sources in its attemptto justify PFI as �value formoney�.# After a couple of slowyears, ministers areexpecting PFI deals worthover £3 billion to besigned in the NHS nextyear (2004).# Two investigations weretaking place this summerinto the £184m PFI-funded Edinburgh RoyalInfirmary. One inquiry willlook into soaring tempera-tures of up to 35 degreesin parts of the hospital,which triggered a walkoutby nursing staff: the other

SecretaryS.O'NeillT. 0121 772 [email protected]

ChairChris MorleyT. 0121234 [email protected]

Vice CChairChris YouettW.0247 667 0444H.0247 671 2372

No toprivatisation andPFI!

Congratulationsto London HealthEmergency on 20years ofcampaigning.

Big corridors � shame about the lack of office space: Swindon�s Great Western Hospital

Selly Oak Hospital campaigners

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South London andMaudsley Health Branch

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Campaigningwith LHE to keepmental health onthe agendaBRIAN LUMSDEN Secretary, LEE ROACH Chair Union office, Bethlem Royal Hospital, Monks Orchard Rd, Beckenham, Kent BR3 3BX

THE PLIGHT of frailelderly patients maroonedin hospital beds for lack ofsuitable nursing homeaccommodation or supportfor them to live at home hasfrequently been headlinenews.

But a recent survey ofdelayed discharges from men-tal health beds, which revealedextensive delays resultingfrom a chronic shortage ofsupported housing facilities inLondon has attracted far lessattention.

Year long waitMore than half of the resi-

dents in 18 projects across justthree London boroughs hadbeen forced to wait at least ayear before being dischargedto supported accommodation:a third had waited up to sixmonths.

In two of the boroughs hous-ing shortages were so severethat some mental healthclients were being placed out-side the borough.

Problems included gaps inprovision especially for thosewith particular needs, andstaff shortages among socialworkers and community psy-chiatric nurses, which under-

mine the continuity of care. The joint report was pro-

duced by the Sainsbury Centrewith the Greater LondonAuthority, the Association ofLondon Government andAdvocacy Really Works.

The findings confirm thepicture of under-investmentand neglect of this key area ofpsychiatric care that emergedfrom the UNISON 1999 sur-vey �The Care Gap�, researchedby LHE.

The report calls on the gov-ernment to allocate funds thatreflect London�s uniquedemands for mental healthcare: but the danger is thatonce again mental health willbe fobbed off with warmwords and more promises ofinvestment which has yet tomaterialise.

Half of all mental healthTrusts were in the red dur-ing the last financial year,and half had seen theirbudgets reduced in 2002-3compared with the previousfinancial year.

The findings of a survey bythe Royal College of Psychia-trists show that three of the45 Trusts whose medicaldirectors responded hadseen budget cuts of 5% or

more, while the overall levelof funding across all Trustsfell by 0.8% � at a timewhen mental health is sup-posedly a top priority service,and other sections of theNHS are seeing budgetsincreased.

The pattern of services hasalso been skewed by Trustsattempting to meet govern-ment targets by switchingresources and staff from onepart of the service to another� notably the expansion of

assertive outreach and hometreatment teams.

The College�s researchdirector Prof Paul Lelliott haswarned that mental healthTrusts are being obliged tomake savings that help payoff deficits elsewhere in theNHS, while cash releasedfrom �efficiency savings� is�re-badged� to seem as if itis new money to meet NHSPlan targets.

This report followed one bythe Sainsbury Centre whichfound that two thirds of the18 Trusts whose financeswere examined were runninga deficit by the end of thelast financial year, rangingfrom just £1,000 to £5 mil-lion.

The pressure group Rethinkhas claimed that of just over£1 billion announced as newspending on mental healthsince 1998 only around£750m is traceable as newmoney leaving the Depart-ment of Health, and much ofthis has vanished into thegeneral pool of new moneyfor the rest of the NHS overthe same period.

Its chief executive, CliffPrior says: �The picture ismuddled and confused bydouble and triple cashcounting, multiple public

announcements of the samenew money, the failure totransparently earmark all theextra funding as it isreleased and the backload-ing of spending plans to a�year three� that never seemsto arrive.�

# Berkshire HealthcareTrust has run up a deficit ofalmost £12m, and is plan-ning to cut psychotherapyservices and close a daycentre as part of an emer-gency package of cuts toreduce the shortfall to£3.8m.

# Mental health servicesin Glasgow are amongthose hit by a massive£11m cuts package carriedthrough by the GreaterGlasgow Health Board.Homelessness and alcoholprojects are to bescrapped, and £1.5mlopped from mental healthservices. The Board claimsimplausibly that it still plansto put an extra £1m intochildren�s mental healthteams next year.

Counting the cost ofmental illnessA shock report by the Sainsbury Centre for Mental Healthhas totted up the cost to the nation of mental illness � andfound it came to a staggering £77 billion in England alone.

A quarter of the population can expect to be affected directlyor indirectly by mental health problems, and the Sainsbury esti-mates include the value of days lost from work as well as thecosts of care for mental illness sufferers.

An estimated £23 billion was lost to the economy last yearbecause people were unable to work as a result of mental ill-ness. This is despite the fact that 39% of adults with mentalhealth problems are unemployed.

The bill for care from the NHS, social services, private organi-sations, relatives and friends was another £12.5 billion.

On top of this the Sainsbury researchers calculated a cashvalue for the human costs of mental illness, including reducedquality of life and lives lost through suicide � and came up witha total of almost £42 billion.

Mental health Trustsin deficit as theywait for extra cash

Scandal aspatients waitmonths fordischarge


Epsom & St Helier Health Branch

Congratulations toLondon HealthEmergency on 20 years campaigning to keep our publicservices public!ANNIE HOLNESS, ChairKEVIN O�BRIEN Secretary

THE DEFEAT for the policyof Foundation Hospitals suf-fered by ministers at LabourParty conference will notstop them forging aheadwith this and other unpopu-lar policies to �reform� theNHS.

The government seems tobe thumbing its nose at itssupporters in the unions andacross the country, and delib-erately recreating the chaosand bureaucracy that causedsuch havoc in the Tory �inter-nal market�� and which NewLabour promised to end in1997.

The Tories brought a grimlegacy of spending cuts, bedclosures, soaring waiting lists,privatisation of hospital ancil-lary services and of muchcare of the elderly.

This was followed in the1990s by the mayhem andinefficiencies of a fragmentedmarket system in whichTrusts were forced to com-pete with each other, pur-chasers made life misery forproviders and the wealthiest

GPs coined in extra cash as�fundholders�.

New Labour has certainlybegun to pump more money

in to the NHS � and hasbrought waiting times down:but there are real dangers inthe new system that is takingshape, which involves:

# funding hospitals �byresults�,

# renewed competitionbetween foundation and non-foundation Trusts,

# increased use of privateprofit-seeking hospitals,

# and billions being com-mitted for PFI-financed hospi-tals over the next 30 years.

All of these policies willincrease costs, weaken theNHS as a public service, andsiphon much of the extraspending out of patient careand into the pockets ofshareholders.

In an eerie echo of thewarnings of Tory health chiefs

as they launched their inter-nal market in 1991, Depart-ment of Health bureaucratsnow admit that the fundingreforms alone, which willforce Trusts to cut the costsof care to a new �referenceprice�, could force someTrusts deep into deficit � andthey will not be bailed out.

By implication the losingTrusts could go bankrupt,with disastrous conse-quences for local patientsand their staff, when the newscheme swings into actionfrom 2004-5.

The problems do not justaffect one or two isolatedTrusts. First estimates sug-gest that on present perfor-mance as many as 70 Trustscould lose as much as 25%of their income under the

new system, while 150 Trustswould face deficits of morethan 9%.

One teaching hospital cal-culates it would have to cutits costs by £66 million ayear. Specialist hospitals withmore complex caseloads mayfind it impossible to meet ref-erence prices.

By contrast some hospitalswhose costs are currentlybelow the reference pricestand to coin in hefty sur-pluses, and those gaining upto 9% would be allowed tokeep the extra cash.

Bob Dredge, the pro-gramme manager overseeingthe new policy insists that�there will not be cuts in ser-vices.� He told the HealthService Journal: �It is aboutshifting the money around. Icertainly don�t think [makingefficiency savings of up to9%] is impossible.�

It�s not clear whether MrDredge has ever worked in ahospital, but is obvious hehas not realised how hard it

has been for Trusts tosqueeze savings of as little as2-3%.

Ministers clearly believethat market-style measuresalong these lines canimprove efficiency: but themost marketised, privatisedhealth care system is theUSA, where admin costs inthe private sector consumeup to 30% of spending � astaggering $300 billion eachyear.

Those European health caresystems which split pur-chasers from providers andinvolve the public sector buy-ing services from private hos-pital are twice as expensiveto administer as the NHS.

Market models and the�entrepreneurialism� of foun-dation Trusts have nothing tooffer but more bureaucracy,more duplication and wasteof resources, and more frus-tration for health workers,whose views and commit-ment to public services arebeing ignored.

Foundationsof a financialflow fiasco

New market-style reforms

MMAANNCCHHEESSTTEERRCCoommmmuunniittyy aanndd

MMeennttaall HHeeaalltthh BBrraanncchhStill campaigning against cuts andprivatisation in the NHS, especially in thecommunity and in mental health services.

Best wishes to London Health Emergencyfor your 20th Anniversary - and may youcontinue for many more years.

In solidarity ...Caroline Bedale and Derrick Goold,Joint Branch SecretariesRuth Abraham and KarenReissmann, Joint Branch Chairpersons

NOC debts could knockback foundation bidNew questions are being asked over the viability of at leastone foundation trust contender, Oxford�s Nuffield OrthopaedicCentre.

The NOC was an early applicant for Trust status, which it usedto expand its private beds to make it one of the Trusts mostdependent on income from private work, deriving over 10% of itsincome (almost £5m a year) from commercial work.

But the NOC�s finances have lurched into the red this year,notching up a shortfall of almost £500,000 by June � partly drivenby the cost of using agency nurses to fill vacancies.

If the Trust does not resolve its financial deficit, it could lose oneof the three stars it needs to qualify for Trust status. Four leadingcontenders for foundation status were ruled out of the runningduring the summer after losing 3-star status.

UNISON has branded thenew mechanism for inject-ing private profit-seekingcorporations into thefinancing of primary healthcare facilities as �geneti-cally modified PFI�.

A detailed pamphlet on�Local Initiative FinanceTrusts� (LIFT) has beenresearched for the union bythe Democratic Health Net-work, and it sounds a warn-ing to local campaigners thatthese schemes are on thespread � and once set up,they will be a permanent fix-ture.

The first wave of LIFTschemes under discussionadd up to £1 billion, twothirds of which comesdirectly from the private sec-tor, which will retain a stakein each local project througha local company or Liftco.

60% of the shares and ofthe board in each Liftco willbe held by private sectorinvestors, 20% by theDepartment of Health andits partly-owned pro-PFIorganisation PartnershipsUK, and 20% by local publicsector �stakeholders� (suchas Primary Care Trusts andlocal authorities).

But a long-term snag isthat the public sector �part-ners� joining a Liftco have tosign a permanent �exclusivityagreement� � giving the new

company the exclusive rightto provide any new servicesor facilities that they mayrequire: LIFT is a commit-ment not for one project, butfor a lifetime.

DisadvantagesAmong the disadvantages

of the new set-up is that itspecifically aims to attractthe interest of large com-mercial organisations �including those providing pri-vate health insurance, andpharmaceutical companiesseeking new markets and

outlets. This raises importantissues of accountability.

But it�s not just the privatesector getting its talonsstuck into the juicy flesh ofthe NHS at primary carelevel: LIFT also transformsthe public sector bodiesinvolved, creating the poten-tial for new conflicts of inter-est, and moving from theculture of public services tomake primary care more likea business.

As the pamphlet pointsout: �The creation of theLIFT scheme also means

that for the first time NHSand other public bodies willdirectly hold shares anddirectorships in companiesthat are operating for profit.�

But although many localpublic sector organisationsappear to have acceptedthat LIFT is the only show intown for financing new pro-jects, other alternatives arebeing considered by somePCTs.

There are possibilitieswhich do not involve a per-manent privatisation of keyprimary care facilities: some

areas could consider usingthe proceeds of land salesto fund a public sectoralternative, or a partner-ship with non-profit or vol-untary sector organisationsinstead.

The process of establish-ing a LIFT scheme can

easily take two years � but itis important that theassumptions and proposalsare challenged from thebeginning.

The public sector organisa-tions will need to begin bydrawing up a Strategic Ser-vices Development Plan:they then have to advertisefor private sector partners,shortlist applicants, andselect a preferred bidder.

By this stage, any elementof competition between pri-vate sector organisationshas been eliminated: thepreferred bidder is in a verystrong position to securefavourable terms, knowingthat if they pull out the pub-lic sector organisations willbe left stranded.

DisclosureLocal campaigners and

unions should be demandingthe fullest disclosure ofanticipated costs of financ-ing, profit margins, and theimplications for any staffinvolved. They must demandfull details of the costs andduration of any leasesincluded in the LIFT deal, agenuine comparisonbetween these and existingcosts, and evidence to showwhether or not the schemeis affordable without damag-ing local services.

Wherever possible, cam-paigners will want to avoidlocal public sector organisa-tion signing up to theseschemes. This LIFT does nottake the NHS upwards, butdown into the grimy world ofprivate profit.# LIFT: A briefing fornon-experts is availablefrom UNISON.

Published by Hands Off Our NHS, c/o Unit 6, Ivebury Court, 325 Latimer Rd, London W10 6RA. Printed by 2000 Print Services Ltd, London E10

H E A L T H E M E R G E N C Y

London

Health Emergency,launched in 1983, has remained in

the forefront of the fight to defend the NationalHealth Service against cuts and privatisation.

We work with local campaigns and health union branches and regions all over England,Wales and Scotland, helping to draft responses to plans for cuts and closures, analyselocal HA policies, design newspapers and flyers, and popularisethe campaigning response. The campaigning resources of Health Emergency depend uponaffiliations and donations from organisations and individuals. If you have not already done so, affiliate your organisation for2003: the annual fee is still the same as 1983 � £15 basic and£25 for larger organisations (over 500 members). Affiliates receive bundles (35 copies)

of each issue of HealthEmergency and other mail-ings. Additional copies ofHealth Emergency areavailable: bundles of 75for £10 per year, and 150for £20.Affiliated organisationsalso get a generous dis-count on LHE publicityand consultancy services.

Send to LHE at Unit 6, Ivebury Court, 325 Latimer Rd, London W10 6RAPHONE 0181-960-8002. FAX 0181-960-8636. [email protected]

AAAAffffffffiiiilllliiiiaaaatttteeee!!!!

PLEASE AFFILIATE our organisation to HealthEmergency. I enclose £15 ❏ £25 ❏ £�I also enclose £10 ❏ £20 ❏ for extra copies of

the paper, and a donation of £� Total value ofcheque £ �NAME .............................................................ADDRESS (for mailing) ...........................................................................................................ORGANISATION ..............................................

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20 years on �and stillcampaigning! AUTUMN 2003 HAS BROUGHT the 20th anniversary of London Health Emergency, and we arehoping to to go into our third decade by stepping up the campaign against the restoration ofthe �internal market� system, Foundation Hospitals, PFI and privatisation in all its guises.

So it�s a big thankyou to those union branches that have taken out adverts to help us fund thisissue � and we urge all affiliated organisations to consider taking an advert in the next issue,at the end of the year. A full page is £480, 1/2 page £250, 1/4 page £130, 1/8 £70, 1/16 £35.Send us your artwork, or just the text you want in your advert and we can design one for you.

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Beware �Genetically modified PFI�!

Don�t get intothis dodgy LIFT!

Trust bosses at the giant Barts& the London hospitals in theEast End have postponed adecision on which consortiumshould pick up the mega-con-tract for the PFI-fundedrebuild of the Royal LondonHospital in Whitechapel.

With refurbishment work atBart�s Hospital, the scheme waslast costed at a whopping £620million-plus � and is certain tocost more before any final dealis signed.

Two consortia are in the framefor this, potentially the biggesthospital scheme in England �Skanska/Innisfree and Renais-sance.

But the City & Hackney CHC iscomplaining that in place of theopen process of consultationwhich they had expected andasked for, the Trust has beenholding closed meetings, withlarge amounts of informationclassed as �commercially sen-sitive�.

The decision, aptly describedby the BLT chief executive as�one of the most importantdecisions the Trust will evermake� will be taken at the endof October.

MegaPFI puton hold

New GP premises could be a nice little earner for corporate investors

new health · 2007. 8. 5. · health workers and local ser-vice users, by establishing elected...

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