Why Voting No threatens Scotland’s NHS

This weekend, another key battleground in the independence referendum emerged.  As big as, if not bigger than, currency wars.

Findings from a Panelbase poll commissioned by the Yes campaign demonstrates the importance of Scotland’s NHS to voters.  Asked if the privatisation of the NHS South of the border with its consequent impact on funding for Scotland’s NHS made it more or less likely for participants to vote Yes or No, people made their feelings clear.  46% would be very likely or quite likely to vote for independence, 35% very or quite unlikely to.

It resulted in rebuttal from Better Together, with Jackson Carlaw MSP, the Conservatives’ spokesperson on health, claiming that the Scottish Government is spending more on private healthcare too.

It’s complicated, but it is possible to shed a little light on the situation.

First, how does what is going on in England with the NHS impact on Scotland?  It’s all about the money, innit.

The Barnett formula determines what money we receive from Westminster.  Think of it as a big bag of pocket money to spend on devolved issues, including health.  Westminster hands it over and the Scottish Government divvies it up across all spending areas.  If Westminster decides to put more into funding public services, then we get more too.  Except that in recent years, it has been putting less in and we get handed a smaller bag of cash.  If Westminster cuts the budget by £100 million, we get £10 million less.  Indeed, since 2010, Westminster has taken 7.2% out of the Scottish block grant, putting real pressure and strain on our public services.  The Scottish Government gets to decide what to spend the pot on, but not how much to put in it, even if we in Scotland want more to spend on public services.  It can only make the money it receives stretch as far as it can through prudent management but cuts have been inevitable.  Except in health.

Until now, the UK Government has chosen to ringfence health spending and increase it in line with inflation – Scotland’s NHS has benefited from this too.  And from a separate Scottish Government decision not to pass on any of the 7.2% cut in overall grant to health.  It has chosen to keep increasing frontline health spending in real terms, acknowledging the value placed by us all on health and the need to keep tackling the levels of ill health in Scotland.

But thanks to the actions of the Conservative-Liberal Democrat coalition government at Westminster, the budget for health in Scotland is under threat.  Largely, due to the Health and Social Care Act passed in 2012.

This Act opened the door to private companies bidding for health service contracts south of the Border.  It’s a move that the Chairman of the British Medical Association (the doctors’ union effectively) called “market lunacy” which offered “a bumper year for multinationals”.

At the same time, the legislation also removed statutory responsibility for health care from the government, handing it over to local commissioning agents.

Thus, the framework has been established to enable privatisation of the NHS in England.  Private companies can now “bid” for health contracts that would previously have been delivered by the NHS (publicly owned and accountable).  How do you suppose firms go about winning these contracts?  By bidding lower than the local NHS trusts and bodies to deliver the service.  So the funds that Westminster needs to spend to provide such services are reduced and the UK Government can cut its budget on health.  Indeed, it has already stated that it is committed to cutting health spending in England by £1.1 billion a year – enabling private companies to run services will help achieve this.  Last year, 70% of new contracts for core NHS services were awarded to companies like Virgin Health.  Together, so far, the services either won by private health companies or being bid for are worth £1.22 billion, covering services such as GPs, end of life care and cancer care.

And how does this affect Scotland?  It’s the money – again – innit.

If health services are being run by private firms at reduced costs (we won’t even begin to talk about quality – that’s a whole separate issue) then the UK Government spend on health goes down.  And because we only get what Westminster allows to spend based on the Barnett formula, it can – and will – cut the money it gives us in Scotland to spend on health, even though we want to keep our NHS in public hands and make different policy decisions on health.  Because Westminster controls the purse strings, it puts under threat our ability to continue to fund our NHS and provide all the services publicly we want from it.  Cute huh?

It gets worse.

If a private company wins a contract say for cancer care, it not only has to take the staff already employed in this service in the NHS over to its new service but often also gets to run its new service from the previous NHS facility. So equipment, beds, buildings that would be lying empty because the NHS “lost” the contract get handed over to the private company, either at a knock down price or no price at all.  That’s facilities bought and paid for by the taxpayer.  That’s staff qualified and trained in their skills by taxpayers.  That’s all that experience lost, just handed over to private firms. Again, it reduces the cost of health care to the English budget.

And when the contracts come up again in three to five years’ time, there will no longer be an NHS England version of that service to put in a bid or to put the service back into public hands. It is a one way journey to breaking up NHS England.

There’s more.  There is nothing to stop any of these private companies recouping the cost of running their services by applying charges.  Indeed, a recent report by the Nuffield Trust stated that 50% of health and care leaders believe that within 10 years, the NHS in England will no longer be free at the point of use.  And there is cherry-picking going on with the easiest health care contracts to deliver the ones the private companies most want.  NHS England is being left to deliver the most complex and expensive services, putting many trusts and hospitals into debt.  Making them all seem like financial basket cases that need to have their financial taps turned off, to prevent them “over spending” and the private sector brought in to “rescue” them.  It is a perfect, dystopian cycle of potential destruction of one of the building blocks of our welfare state.

But it gets worse still.

At the same time as all this is going on, there is an international trade agreement being negotiated between the EU and the US.  This agreement is about free trade and allowing US companies the right to bid for services and trade in key areas in the EU market, of which the UK is part.  The agreement is known as TTIP – Transatlantic Trade and Investment Partnership.  Opt outs and exemptions are allowed; many EU states are choosing to exempt and therefore, protect public services, like health, from big US based multi-nationals.  Guess which member state has not asked to exempt health from TTIP?  Yep, the UK. This means that US healthcare firms could come into the market in England (and indeed, potentially Scotland as we don’t get a say in these negotiations and have no way of exempting NHS Scotland from its application as the UK gets to make the call).

Now, of course, we can continue to protect NHS Scotland from such private companies coming in, if we continue to elect devolved governments that will stand up for Scotland’s interests and for a publicly owned and delivered health service.  But any devolved government’s ability to do so is going to be constrained if the block grant is still being slashed – and there are £5 billion of cuts coming our way in the next two years that we already know of.  Moreover, the pockets of big global private healthcare firms are deep – they wouldn’t be averse to going to court to insist upon TTIP being applied across the whole of the member state which signed up to it.  And who knows if we would be able in the next five to ten years prevent Scotland’s health service being opened up to private companies as it is being in England.  Whether we want this to happen or not.

Yet, the Conservatives claim the private sector is very much playing a role in the NHS in Scotland today.  At the margins.

The amount spent by NHS Scotland on private sector involvement in 2012/13 was £80 million – that’s less than 1% of the total amount spent in Scotland on front line NHS services.  To put it in a slightly different context, that £80 million is much less than the £220 million a year in charges the Scottish Government has to shell out for PFI contracts.  If anyone has allowed the private sector into our NHS in Scotland it’s been Labour – the Scottish Government is locked into these contracts and has no choice about paying out these funds, thanks to Labour bringing private firms into our health service.

The accumulated £400 million spend over six years quoted by the No campaign has been massaged to include the use of locum doctors and agency nurses – temporary staff brought in to cover shortages, holiday periods and the like.  The use of private agency staff in such situations is common and longstanding – if there’s more of this going on than there used to be, then that’s a separate policy and workforce issue.  But the spend on it should not be used to suggest that the SNP Scottish Government has allowed the private sector more say in running health services. It hasn’t, it has done its very best to limit the use of private businesses and only brings them in to carry out specific functions, such as to bring down waiting times on straight forward procedures, and in particular health board areas where such an issue has arisen such as to bring down waiting times on straight forward procedures.

It is vastly different from giving contracts to private businesses to deliver whole services, which is what is going on in England.  None of the private providers in NHS Scotland are contract holders.  In Scotland, we have not opened the door to private companies bidding for health services.  We don’t have a Scottish equivalent of the Health and Social Care Act 2012 – indeed, our most recent health legislation, the Health and Integrated Social Care Act focuses on improving the service people get from public services, trying to join up health and social care provision across the NHS and local government.  The entire focus in Scotland – from the limited input of the private sector in certain fields and geographical areas to the statutory framework around service provision – is to put the patient first.

If Scotland votes No on 18 September, our health service, NHS Scotland is at risk from the actions of the UK Government.  First, by bringing in the private sector to run whole swathes of NHS England at lower cost than in the public sector, it can cut the overall budget for health.  That will have a knock-on effect to our block grant, making it difficult for Scotland to maintain spending levels on health – the sort of spend we all want to see on health as a priority issue will be under threat.  Second, by refusing to exempt health provision in the UK from the TTIP, US private healthcare firms – and there are lots of them and they are huge – NHS Scotland could find itself subject to tendering for key front line services, with many of them being taken over by big business.  No matter who we vote for in Scotland, no matter how much we want to keep our health service in public hands.

That’s the threat voting No poses to our health service – and indeed, our nation’s health.

Which is why if you want to save the NHS, you need to vote Yes.


Thanks to Jeane Freeman and Philippa Whitford, of Women for Independence, for providing much of the content of this post. 




9 thoughts on “Why Voting No threatens Scotland’s NHS

  1. Pingback: No campaign in denial over NHS | Alister Rutherford

  2. Why did Malcolm Chisholm say the other day that the Scottish Government had ‘reduced’ NHS spending by 3%? Anybody know?

    (I worked out that this amounts to about £350 million of the Scottish NHS budget. Is this a reference to the amount that this article explains has been shelled out to private health in order to cut waiting lists where there are long and unacceptable queues for standard procedures?)


  3. Never read so much nonsense as I just did in Largslab’s comment.
    Labour paved the way for privatisation. Labour has vowed to best Conservative savings/cuts in all fields. Labour does not know a socialist *rse from an elbow.
    NHS Scotland will cease to exist as we know and understand it within 5-10 years of a no vote. Those US health companies will take the UK government to court to ensure they have access to ALL health boards – including Scotland. I have lived under both the US and UK health systems and I can assure you, you do not want to be under the US system without insurance.

    • Been listening to rubbish about “Labour paving the way for privatisation” for all my adult life. It’s never happened and never will, it’s just the usual Tommyite nonsense.

      Scaremongering project McFear in all is glory.

  4. Pingback: Why Voting No threatens Scotland's NHS | Refere...

  5. Larglab

    Couple of points . ScotGov funding comprises block grant plus Barnett .We already know that come 2016 there will be some £5Bn coming off Scotland’s budget allocation from WMg and the whole Barnett formula will be subject to review , again in 2016. Many think Barnett will not survive . Be that as it may the Scotland budget from 2016 will be severely cut under the Cons and if it’s Lab then Balls has promised more of the same austerity. Where then will the money come from to maintain our treasured NHS if not from an increase in Scottish taxation which would be possible under existing but unused devolved powers. A tax rise but only for Scotland and all that nice oil tax flowing South ?That’s really going to go down well with the voters and I certainly wouldn’t like to be selling this as part of any manifesto.

    The TTIP Agreement between America and the EU requires that state services be open to competition from American multinationals. It applies where privatisation is already practiced unless there is an existing state monopoly .Should there be a No Vote in September it could well be argued that Scotland is not a country but a region ( as currently defined by the EU) and this combined with previous use of private providers means that TTIP would most probably gain some form of entry into the SNHS. The TTIP Agreement , as Andy Burnham knows , will facilitate the multinational American companies tendering for NHS contacts.

    There are now over 200 MPs and Peers who have registered interests in medical & medical related companies . I wonder why at this time they are so attracted to medicine .

  6. The £350M spend over a number of years by ScotGov on private providers cannot be compared to the privatisation in England. It’s like comparing apple & pears .

    The ScotGov spend was to tackle specific problems mainly caused by a backlog of certain procedures. There were No Long Term contracts .

    Whereas in England WMg, has as a matter of Gov policy, gone down the road of entering into full privatisation for the provision of ongoing services. The largest yet awarded being
    £1.2Bn covering cancer services & care of the dying.Service providers operate under NHS badging, logos & signage so the patient seldom knows they are being treated by non NHS staff.

    Companies such as Virgin, Serco, Harmoni, Care UK & Rmsay Health are all in on the privatisation Act actively chasing patients for profit

    There is therefor an established & growing Private Sector involvement in the ENHS driven by a market economy motivated by profit. This , unless halted by a Labour Gov , will under the Conservatives grow exponentially in the coming years with giant US Health Care providers & insurance Companies entering the UK market.

    Andy Burnham is recently on record as saying that under the present competition framework the English NHS will be lucky to survive a further 5 years.

    Currently ScotGov has done everything in their power to ensure our SNHS is properly funded & protected from the madness of the market economy in medicine . The Scottish public treasure “cradle to grave medicine & social services” .However they are deliberately being kept in the dark over what is happening South of the Border.

    In the many things to be considered in the Referendum The National Health Service should be at the top,of the list and the public explicitly told what it will mean for them & their families if there is a NoVote in September . It will certainly mean the protracted death of the SNHS
    caused by privatisation and lack of funds replaced by a growing private sector where only money will entitle you to the best treatment .

    Forget the contrived distraction over currency . Retention and betterment of our current SNHS is strong ground for our FM when he next debates Darling on TV. And remember it was a Labour Government which started NHS privatisation and over which Burnham now frets .

  7. Kate this is a long way of saying not very much.

    The Barnett consequentials have gone up in all recent years, AS admitted so on radio this am. So no implied or actual cuts or Scottish NHS. The TTIP is a potential Trojan Horse but it doe not apply to areas where contracts are not already active. So no problem for Scottish NHS.

    The rest is “fight the Tories” and the best way to do that for ALL on these islands is to join us in Labour in doing just that.

    • You`re own shadow health secretary, Andy Burnham warns that the purpose of the reforms in England are to `soften the NHS up for privatisation`.

      Leaving aside the issue of possible legal challenges from North American companies to allow access to Scotland`s NHS, the result of TTIP, do you not believe your own shadow minister when he talks about the `unraveling` of the NHS and it`s `marketization`?
      The fight the Tories argument is bogus, as Labour is not proposing fighting TTIP.

      Health spending will be cut in England, the Tories have said they will use 30% private delivery across their NHS and spending will be cut accordingly. It is all part of the austerity drive which Labour and their affiliated unions have agreed to continue, if elected.
      Labour are not the answer, voting Yes and running our own economy is.

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