Scottish budget at risk from privatisation in English NHS

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   By a Newsnet reporter 

The SNP is today calling on the UK government to give assurances that “savings” made from the privatisation of the National Health Service in England must not be used to try and justify another cut in Scotland’s budget.

The changes to the NHS in England began to come into effect on 1 April, under the terms of the new regulations it is now compulsory for the new local commissioning bodies in England – the so-called clinical commissioning groups – to use market mechanisms to commission health services.

The changes have been described as the introduction of a US-style market in health.  Fears have been raised that austerity will ensure the NHS in England will be a two-tier service, with the best service for those who can afford top-up private insurance, and a basic and fragmented service for the rest.

Last year Conservative Health Secretary Andrew Lansley promised: “There is absolutely nothing in the bill that promotes or permits the transfer of NHS activities to the private sector.”

However under the terms of the new regulations, this is precisely what has occurred.  The changes oblige all NHS bodies to deal with one another on a market basis, and open the door to private companies to tender for NHS services and contracts.

In a recent British Medical Journal publication titled “The future of the NHS -irreversible privatisation?” Dr Lucy Reynolds, research fellow at London School of Hygiene and Tropical Medicine warned:

“What has happened is that all of the rules that control health financing have been gradually changed since the New Labour times. Overall, we now have the NHS reorganised in such a way that it can be relaunched as a mixed market, so not just the public health sector service, but also a healthcare industry. The rules are structured in such a way that there will be a gradual transition between those two groups. The public sector will shrink away, and the private sector will grow.

“But because there will never be an announcement in parliament that the NHS is privatised, and because the private providers will be allowed to use the NHS logo for anything that they are getting NHS funding for, it is very likely that the general public will not be aware that the private sector has in fact come in and taken over whatever bits of the NHS it finds profitable until probably service provision gets fairly bad.”

Although health is a devolved issue, and the SNP government is committed to keeping NHS Scotland in public hands, due to the workings of the Barnett Formula the block grant received by Holyrood is likely to be cut as a result of the creeping privatisation of the NHS in England.  Under the terms of the formula, Scotland loses around £99,000 for every £1 million of budget reductions in England.

The SNP fear that Scotland is looking at a potential cut of as much as £105 million per year due to the changes being imposed on NHS England.  If the Scottish health budget continues to be protected, swingeing cuts would have to made to other areas of Scottish government expenditure in order to deal with the shortfall.

The SNP warn that this illustrates how no Scottish service is safe from the effects of Conservative policies, even in areas which are devolved to Holyrood.  Yes campaigners argue that the only way to guarantee that NHS Scotland remains publicly owned and operated is to vote Yes for independence in 2014.

Aileen McLeod MSP, a member of the Health and Sport Committee, said:

“The dismantling of the NHS in England is very real indeed. Tory privatisation of the English health service is a dire situation for patients that will never be allowed to happen in Scotland while the SNP are in office.

“But the UK government expect ‘savings’ made as a result of their privatisation to be £1,068 million in every year between 2014 and 2020 – which could potentially lead to a reduction in Scotland’s budget of over £105 million per year, as long as Scotland remains under the Westminster system.

“This must not be allowed to happen – I am writing to Chief Secretary to the Treasury Danny Alexander to demand a guarantee that this will not have a negative impact on the Scottish block grant in 2014, and of course it is another reason why Scotland needs a Yes vote next September so that we become an independent country in 2016.

“The priority of hospital beds over nuclear bombs – coupled with the insecurity of looking to Westminster for an endangered block grant – highlights the need for a Yes vote in 2014, and Scotland to have decisions made by a parliament 100 per cent elected by the people of Scotland.”