In 2012 the UK hosted one of the most successful Olympic Games ever. The stadium was built on time and under budget, the GB team performed magnificently, and NHS doctors and nurses danced into the hearts of the world in the opening celebrations. We were, for a moment, the envy of nations. Then came austerity.
Austerity: the damage in numbers
2024 is the year that the Tory chickens come home to roost, as the consequences of utter self-serving incompetence and a heartless Treasury are revealed.
Today, Britain has by far the highest rate of homelessness in the developed world. In 2023 the rate per 10,000 people was more than twice as high as Germany and ten time higher than Norway. Rough sleeping has increased from about 1,700 in 2010 to about 4,000 in 2024.
In 2010, the number of people receiving emergency food from the Trussell Trust was 61,000. Ten years of Conservative rule later, it had risen 40 times to 2.5 million, with more than 600,000 children in poverty. In that time the government had closed 1,300 children’s centres, 600 police stations, resulting in 12,000 fewer police officers, and cut the local government funding that pays for social care by over 50%.
They had gutted our public services. The public, not the politicians, are paying the price.
Incompetence in managing public assets
I recognised these symptoms. I had seen them in my work throughout Southern Africa and Eastern Europe – an inability to manage and maintain public assets either through incompetence or corruption, or both; the growing pains of the new democracies that dishearten the population. Good public services for all are the real democracy. Not votes.
I never ever thought I would experience these failures in my adopted country, England. I never dreamed that the UK’s public services, the roots of our democracy, could be so damaged by any government. They have been tampered with and pared down by a political mindset that convinced itself that the private sector/business could deliver public services better than one of the great civil services of the world.
There were 37 privatisations during the Conservative reign from 1979 to 1996, to the value of just £64bn for the nation. To put that into perspective, the estimated cost of the truncated HS2 to Birmingham is £67bn. Our birthright has been sold for a mess of pottage!
Here are two examples of how this ideology has ruined the performance of the nation’s basic services.
The railways: a victim of stubborn neoliberalism
I worked as a consultant for InterCity for eight years, including five years to the board. Crucially this included the privatisation period when the over-rated John Major did what even Margaret Thatcher had not attempted. He sold and broke up one of the best performing and reasonably priced railways in the world – after a fierce battle with British Rail.
On the auspicious date of April Fool’s Day 1994, privatisation of the national railway became a reality – the day after InterCity closed the books with a £100mn profit handed back to the Treasury. Just seven years earlier, an InterCity 125 high speed train, designed and built by British Rail, had broken the world record for diesel powered trains – 148 mph. Add in one of the finest management teams in the country, and the private sector had got an absolute bargain, which they squandered. Today we are paying the price as travellers and taxpayers, with a poorer service and fares that are now five times as high as in Italy and Holland, as this European comparison shows:
Ironically, since privatisation Britain’s railways have become a largely public-owned service – but owned by foreign states. In 1996, there were 21 UK-owned private operators and one foreign-state owned. In 2018, there were just six UK-owned companies and 14 foreign-state-owned operators. We are paying the highest fares in Europe to foreign governments, while our state is subsidising them so they can pay dividends and bonuses. Thatcher would be turning in her grave. John Major, the architect, remains unruffled. The public pays the price – higher fares for a worse service – and the money goes out of the country when the so-called private operators pay their shareholders – even when losses are made. It really is crazy capitalism.
The Treasury sees the cost, not the value, of the NHS
The NHS is the UK’s major asset. It treats – with multiple visits – an equivalent of four times the population of the UK every year and contributes significantly to the job market. If the NHS fails, the British economy will fail.
The main deficiency in today’s government, apart from the obsession with privatisation, is that it will not plan and does not understand how effective organisations work. The Treasury is the major cause of this deficiency with its simplistic ‘cost saving’ mentality and it has cost this country dear. After years of underfunding, the NHS now has fewer beds per head of population than 26 of the 30 other OECD countries, while demand has risen. Overworked and understaffed hospitals spend valuable time juggling resources and private care supply instead of giving full attention to their patients. And both nurses and doctors are underpaid, hence their first ever strikes in the NHS.
Consequently, nurse vacancies in the NHS in England reached a record high of almost 47,000 in 2022. England has just 2.9 doctors/1,000 people. Germany, by comparison, has 4.3. England needs nearly 50,000 additional doctors simply to put us on an equivalent standard with today’s OECD EU average of 3.7 doctors per 1,000 people.
NHS privatisation in its many guises
The next government will inherit the debt of 7,452 NHS contracts, worth a total of £29.1bn, between for-profit private companies and local, regional and national NHS entities in England. The private companies have most often not been successful. For example, 40% of the private mental health companies, which are paid £1.3mn a day by the NHS, are judged to have “needed improvement”. In other words, the NHS is paying the private sector almost half a million pounds a day for poor performance. This amounts to £475mn a year, without counting the very expensive cost of correction (by the NHS), which could double that.
Private finance initiative (PFI) – Labour’s contribution to the crippling of the NHS
Labour’s PFI only adds to NHS England’s woes. The idea was that, rather than central government directly funding hospitals’ infrastructure works, a consortium of private sector banks and construction firms finance, own, operate and lease them back to the NHS, over a period usually between 20 to 30 years. Gordon Brown, as chancellor, is largely to blame. He and health minister, Alan Milburn were obsessed by the idea of keeping expenditure ‘off the books’ by deploying PFI, despite the Tories having junked it years earlier. (Note that 28% of PFI/PPP contracts by capital value have been subject to buyout, termination or major problems.)
In the ten years to 2021/22, £80bn was taken from NHS budgets to repay PFI loans; money that should have gone to operational budgets and maintenance. This transfer of wealth out of the public sphere has been a financial noose around hospital trusts’ necks. For example, Sherwood Forest Hospitals NHS Foundation Trust has spent more than double on its PFI repayments (£45.8mn) than on drugs costs. This is only one of over 20 trusts that are spending more on PFI payments than drugs.
In 2022, Sir Howard Davies, chair of the Royal Bank of Scotland, stated on BBC’s Question Time that PFI had been a “fraud on the people”. But that most authoritative NHS prophet, Professor Allyson Pollock, had already warned Labour in the British Medical Journal in 1997 of the dangers of PFI, one of over 50 papers she has published on the topic.
Rail and the NHS, what must the next government do?
The next government will have a lot of work to do fixing the problems of the NHS and the UK rail system. Here are some steps they could take.
Rail: Do not renew any more private contracts. Take Network Rail fully under the Ministry of Transport control, instead of subsidising it. Set up a working group – not a commission – with the rail unions to phase out the private sector. Focus on east-west transport links and ensuring the delivery of infrastructure projects like HS2.
NHS: The priority is to fix social care. The Lib Dems take credit for taking the lead here. Daisy Cooper, deputy leader, wrote an exemplary piece in Spotlight in the New Statesman in May.
The next priority is a working group to rescue care and nursing homes from the private sector. This should be chaired by Professor Pollock and must include Greenwich University and Professor Dexter Whitfield of the European Strategy Services, an authority on ‘de-privatisation’. No consultants should be allowed near it.
Primary care must be reinforced with qualified medical doctors and levelled up so that people living in the most deprived areas have the same access to GPs as the rest of the community.
And stop tampering with acute care. Just pay proper salaries and fund resources. DO NOT attempt cost reduction programmes. There is always enough money.When this is done, acute care will take of itself!
Finally, the next government must put the Treasury back in its box. It is a service to the government departments, not a master. Its policies have been proved to be ruinous and its credibility is shot. So, when the politicians ask where the money will come from, tell them to ask Lord Blunkett how, in 1926, with no money in the kitty, Sheffield rebuilt its city and its pride. He will tell you to read the pamphlet, ‘Six Years of Labour Rule in Sheffield’, the finest example of community wealth building.
That is the way ahead for the United Kingdom.
