How much is the government really privatising the NHS?

The myriad different bodies that make up the NHS in England and their opaqueness, especially in terms of contracts to provide services, makes mapping the true extent of the privatisation of public healthcare difficult.

The available evidence bears out Owen Smith’s claim that NHS privatisation is increasing, but it is less of the “explosion” that the Labour leadership hopeful warns about and more of a gradual but inexorable, rise in the proportion of the NHS budget going to firms such as Virgin Care, Care UK and Bupa. It is also noteworthy that the private sector has been making ever bigger inroads into several key areas of NHS care, notably general practice, community services and mental health care.

Department of Health (DH) figures show that the amount of its funding that has gone to “independent sector providers” more than doubled from £4.1bn in 2009-10, Labour’s last year in power, to £8.7bn in 2015-16.

Slow-release privatisation has also seen the percentage of the DH budget finding its way into private hands rising from 4% in 2009-10 to 8% in the last financial year.

A few privatisation contracts involve huge sums. Several GP-led NHS clinical commissioning groups (CCGs) in Staffordshire caused controversy in 2014-15 when they sought to hand 10-year contracts for cancer and end-of-life care worth £1.2bn to a private provider, though those plans have been held up after NHS England became involved. Most contracts are smaller, sometimes for a few million pounds.

In January,however, Richard Branson’s Virgin Care group – which has won a growing number of NHS contracts – was awarded a £126m contract to provide a range of health services at hospitals in north Kent, including home visits and community hospital care. It is unclear what the impact of that tendering decision will be on the failed NHS bidder, Kent Community Health NHS Foundation Trust, which has lost a key source of income.

Similarly, there are serious concerns about the effect on Southport and Ormskirk NHS Trust now that West Lancashire CCG has opted to outsource a range of urgent care services, such as GP out-of-hours services and walk-in centres. Having rejected its local acute trust’s bid, the CCG remains in talks with United Healthcare and Virgin Care about the contract.

“This group of people [the CCG] are taking decisions which are destabilising the future of our local hospital and could lead to NHS services being privatised,” the local Labour MP Rosie Cooper said recently. Local residents were disgusted, she added. In its response, the CCG said: “This re-procurement of local community health services is standard practice for CCGs. This process is subject to national procurement legislation which requires the CCGs to enable both NGS and independent [private] providers to compete.”

Will this creeping privatisation continue? Almost certainly. The NHS’s financial squeeze, coupled with private firms’ ability to undercut NHS providers, plus the obligation imposed on CCGs by the coalition’s shakeup of the NHS in 2012, together mean that more and more CCGs are likely to feel obliged to outsource more and more contracts, despite concerns about the quality of service that may ensue.

Concern about the quality of NHS-funded inpatient care for mental health problems in Priory hospitals is merely the latest reminder that private providers do not always meet the highest standards.

Concern about NHS privatisation has grown since the Conservatives won last year’s general election. Some in the healthcare profession, such as Dr Kailash Chand, who until recently was the vice-chair of the British Medical Association, see growing outsourcing as part of an unacknowledged Tory plan to deliberately run down the NHS and pave the way for the replacement of its unique funding model with a new setup in which private health insurers and private medical care are central.

Last month the then health minister George Freeman called for an end to the “apartheid” between the NHS and private sector. “In my party, we have to end the apartheid that suggests the private sector does all the innovation and entrepreneurship and the public sector just treats people … The NHS is the great engine of innovation that can drive that partnership,” he said in a speech to the Reform thinktank. There also needed to be “a debate about how we fund health and care in the 21st century”, he added.

Freeman has since acquired a position of much greater significance under Theresa May, as chair of her policy board.