Privatisation - Good or bad?

17 Oct 2013

Apologies for no articles in the last few months. I’m sure many readers of this article will understand when I say that time has truly snowballed. I also wanted to answer this question as it was a cliff-hanger in my previous article for Health. This may indeed be my last article as Cabinet Minister for Health so I wanted to finish on a slightly controversial topic.


In 1948, history was made. It was three years after the end of the Second World War and a Labour government was incumbent. Slums were prominent in the UK and the quality of health care was more or less non-existent for the poor. Labour came in 1945 with a large, radical and very socialist manifesto to put the country back on the ‘straight and narrow’ after the War. Anneurin Bevan was sent to the Ministry of Health and he had big plans. His plans would revolutionise health care in the UK. It can only be the one and only NHS – the organisation which has stood proud for more than 60 years, treating many generations of family members, from the 1940s to the 2010s. But there has also been an argument which is as old as the NHS itself and which has always accompanied the topic of the NHS in any debate. That argument is about privatisation. History has been split over whether privatisation is a good or bad thing generally and whether it should be extended to the Health Service. This article has not got all the answers (in fact far from it) but it will hopefully present a reasoned argument about it.

I may sound patronising here but for the purposes of this article, here is the definition of privatisation – ‘denationalisation: changing something from state to private ownership or control’. So, it means making something private which was under public ownership beforehand. We have seen a mix of privatisation and nationalisation through the last few decades. When you look at the politics of it, Attlee most notably spent his six years as PM nationalising key areas of the economy, whereas a few decades later, Mrs Thatcher spent her eleven years as PM doing the opposite. So, there has been a huge political spat over this issue over time. We have seen examples of this currently, most notably the privatisation of Royal Mail. And the change in the ownership of this corporation has raised questions about the NHS. Bevan famously resigned from his post in the 1940s after the emergence of plans to introduce a prescription charge. His reasons were that he saw no reason for a ‘National’ Health Service to have ANY private elements which could restrict the usage of it. Many Health Secretaries after him - Jeremy Hunt is one example - have battled with this problem. So, does this mean privatisation is necessary? Not necessarily.

Of course, when money is tight, governments look at how to make certain parts of the economy contribute that little bit more. Unfortunately, history has looked largely in a negative at the Conservative Party when it comes to the argument of privatisation, but they haven’t always been the ones carrying the mantle. In the 1997 campaign, Tony Blair made a pledge to prison officers that when the big P came knocking at the prison gates, a Labour government would resist it, but what actually happened? They in fact found privatising parts of the prison service too irresistible. And the Royal Mail privatisation is currently being led by a Lib Dem Minister (Vince Cable MP) so not all parties are as anti-privatisation as they may want you to think. The basic issue is the economic problem. Money is the scarce resource; this needs to be used in a way which is efficient. When the NHS is battling for funding with Education and Defence and Work and Pensions, it can lose some funding. Consequently, the ‘natural step’ is that the assets you have, you apply a cost to. The problem for this is that if you apply a cost to something, then it can’t connate 100% of its ‘National’ qualities.

Generally, private institutions tend to excel, with private hospitals and schools receiving much acclaim and get good results in league tables. State schools have been on a radical programme in the last few decades which have seen them also improve. However, although many completely private institutions tend to excel, problems do emerge when a private company takes over the control of a hospital or hospital trust. When this happens, the first port of call is the government because the opposition (whoever it is) throws accusations of cost efficiency over care and the heated political spat continues. There are two ways to look at it, economically and socially. With the NHS the economic view is applying a price to get that little bit extra to help pay for the service, but this conflicts with the social view that privatisation is always looking at profit and not for the benefit of the public. With the NHS, it is run not for profit, so if a private company took over, then people would feel that there is a shift of objective in the organisation from care to profit, providing care for monetary reasons (trying to create a low price, low price service) as opposed to for the sake of care itself. 

The big problem politicians have is how to have a compromise between the economic and the social view. Politicians need to make sure that standards are rising but that costs aren’t, and it’s by no means an easy task. I agree with the social view that it is the National Health Service and it should be kept national, but if we can reach a compromise where a small price tag is applied to some areas (like what is being proposed by Hunt about immigrants and access to the NHS) then the NHS can help pay its way. It is a national institution and a radical privatisation of it would be a step in the wrong direction – after all the USA want to be like us when it comes to health and we should take heed to stay clear of their current system of insurance where if you have nothing, you get nothing. 

The perception of the NHS is it is as British as the British burger, as British as Churchill and as British as our fight back spirit, but a review of the times is needed for the NHS – things are very different now than in 1948 and the NHS has to change with the times.

To summarise, privatisation has to be managed in a way which gives maximum efficiency without damaging the NHS’s national qualities in an uncompromising way. It can ensure competition, but for the right reasons, and that has to be guaranteed before anything else happens. I will leave you, as always, with one final thought. Thatcher said when she was premier that when she was privatising, she would stop at the Royal Mail citing, ‘I would never dream of privatising the Queen’s Head.’ Cameron’s government has done this in 2013, so if they have done what Thatcher never dreamed of doing, what else would they do? I personally would say neither the Conservatives nor any other party would privatise the NHS because the political repercussions would be huge. But the debate will continue to rage on.

Backbench Minister for Health


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