NHS: Investing in cuts

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For the last 2 months health service trusts have been announcing job cuts, 750 at North Staffs, 400 at NHS Direct…totalling at least 6,000 so far, with estimates that the final number could reach 15,000-20,000 as the NHS battles to deal with overspending of around £700 million. Thousands of student nurses will not find jobs after they qualify this year, having paid through the nose for their training. After government spending on health has increased by 4.5% a year under Gordon Brown’s various budgets, everyone tells us that this overspending, and therefore the cuts, must be due to mismanagement, or privatisation, or both. Patricia Hewitt defends the cuts, telling us that it is simply a question of some health authorities that need to be taught best practice by those who are better at managing their resources for patient care. The Tories blame Labour for not managing its ‘reforms’ properly. Those crying out against the cuts also blame poor management: “staff and patients are paying the price for poor management … Ian Ducat, the regional secretary for Unison South West … said ‘I shall expect the resignations of NHS Trust chairs and chief executives and dismissal of finance directors’.” (article from Freedom on libcom.org/news/article). NHS chief executive, Sir Nigel Crisp, seems to agree, and resigned. But everyone is wrong. Things are far, far worse than that.

Let us assume that we were talking about some other kind of business, a bank for instance. A huge investment is made in upgrading and centralising computers, new managers are hired with a tough new attitude to financial and workplace discipline, a call centre is opened, wholesale re-grading of jobs, and finally large scale redundancies are announced and many workers have to reapply for their jobs. Do we cry ‘poor management’? Do the shareholders demand the heads of chief executives and finance directors? No, we recognise the normal working of the capitalist system as the conditions of the crisis force each capitalist to increase exploitation. All these things are happening in the NHS, and we are asked to blame the managers – for doing what managers do in the capitalist system, for doing what they were hired to do.

The policy of cuts is not new for the NHS. It is a continuation of the ‘reforms’ started in the 1980s, with one reorganisation and initiative following another. First of all ancillary services were put out to tender in the 1980s, jobs were cut, rates of work increased, cleanliness put at risk. In the 1990s private finance was introduced for hospital building, always with fewer beds. The first attempt to bring in competition between hospitals was made with the division between ‘purchasers’ and ‘providers’, with the money following the patient. Throughout, beds have been cut, services moved into the ‘community’ where they can be done more cheaply if they are done at all.

Under Labour this process has been accelerated. Labour has extolled the virtues of ‘local autonomy’ and ‘community’ control of health services, while introducing the most brutal financial and clinical controls. Every level of the health service has been placed under the most harsh regime of payment by results. There are 700 targets an acute hospital has to meet in order to get its full funding. Labour has introduced the direct financial incentives for senior managers to attack workers’ working conditions and pay, because chief executives’ pay is dependent upon the meeting of targets. This means that at every level of management there is the utmost pressure to meet targets, that is, to make workers work even harder” (WR 291).


Let us look at a few recent examples of investment in the NHS. A couple of years ago £6 billion was put into computers. Lab test results now come electronically and there is – usually – less delay in receiving them. There is a plan to put basic health information on a central electronic health record for each patient. Above all there will be more choice through ‘choose and book’, so appointments can be made in the GP surgery, cutting delays and increasing choice. What could possibly be wrong with that? The reality is that choice has decreased markedly, with commissioning authorities saying where patients may or may not be seen, with departments being organised to review and reject ‘inappropriate’ referrals, which is the only way they can possibly reach their targets on waiting lists. More and more minor treatments are being ruled out for the NHS. Nevertheless, ‘choose and book’ has a huge amount of government money invested in it. The investment in IT and ‘choose and book’ is not for patient choice or safety, but for cost-cutting in the long term. What is the long term plan for hospital central appointment departments when appointments are all made electronically from outside?

A part of the NHS overspend in 2005-6 is accounted for by the new GP contract, costing £300 million over the intended cost. The whole basis of this contract is the introduction of targets as the basis of payment. Obviously the targets have not yet been set high enough, but each year will see new targets, just as in hospitals. In particular, it marks a trend to move more and more work, particularly minor surgery and chronic disease management, out of the more expensive hospital environment.

One other aspect of the recent government investment is the army of those needed to check up on the achievement of targets whether in hospital or ‘community’. These people save the NHS money in the long run; they will be needed to balance the books.

The attacks on the health service are not a question of this or that government policy. They have been brought in by Tory and Labour administrations with equal vigour. They are not a question of mismanagement, but of deliberate policy. Patricia Hewitt has been quite clear that, redundancies and all, this is very good year for the NHS, and she is one of the very few ministers to keep her job in the reshuffle after the government’s local election losses. And there is far more of the same to come: “a report by the Reform think-tank said government changes to the National Health Service could lead to a 10 percent cut in staff — or 100,000 job losses — but that that would result in a more efficient system” (uk.news.yahoo.com/12042006).

It raises the question of why a government that is investing so heavily to prepare the cuts in the NHS should send a minister to the RCN to tell them what a good thing it is that lots of nurses are being made redundant. This was no gaff, but a necessary piece of theatre, an opportunity for the RCN to act like any other union, to shout, to make a lot of noise. The unions are an essential part of bringing in the attacks, with responsibility for giving a false framework for workers to express their anger. With attacks on the level we see in the NHS today, the RCN will need to be fully involved, and this altercation with the minister allows it to drop its ‘professional’ image a little to do so.

The idea that investment alongside cuts means mismanagement only arises because the NHS is portrayed as something different from an ordinary capitalist concern. In one sense it is, since it does not sell a product on the open market, but is financed by the state. But health workers do treat workers whose labour power is the basis for the creation of all value. The NHS has therefore been very useful to the state since its formation after World War 2. It has helped keep the working population healthy and prevented too many potential workers being occupied with the care of their sick and ageing relatives at a time of full employment. It has also had an important ideological function in giving workers the impression that they have a stake in the capitalist state, that its nationalised industries are a gain for the working class. Just like the universal subsistence level state pension introduced at the same time, the NHS made it appear that workers could have a future within capitalism, that they could be provided for in illness and old age. Like the attack on pensions, the attack on the health services shows that the only perspective capitalism has for the working class is more misery.

Alex 6.5.06

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