So Milliband wants “the right kind of competition” in the NHS?

The government has announced a ‘pause’ in its NHS plans and a consultation. Whilst this is an indication of the pressure it is under, it’s is a manouevre designed to ease through the Bill in its essentials. How does the Labour Party sit in relation to this situation? Today Ed Milliband delivered a ‘keynote speech’ which supposedly clarifies the Party’s position. (Judge for yourself here—ed-miliband )

What is essential about the ‘reform’ is that it proposes to introduce a free market in healthcare, with Monitor (the regulator) overseeing competition on the basis of European Union competition law. Milliband has picked up on this and said we don’t want the NHS to be run like privatised utilities. However, he sticks to the New Labour mantra when he says that

Any effective reform must ensure collaboration continues alongside the right kind of competition.”

He neglects to explain what “the right kind of competition” is. I suspect he means “competition on quality” which was supposedly one of the aspects of New Labour’s ‘market’. In fact Milliband admiringly quotes the right wing Kings Fund which says:

This Bill signals a significant shift towards a more competitive market for healthcare. While we support increased competition in areas where it demonstrates benefits to patients, the Bill appears to move towards promoting competition at the expense of collaboration and integration.”

In fact there is little or no evidence that competition benefits patients. The competition that New Labour introduced was fraudulent – it handed over work to the private sector and paid it more to encourage its entry into the ‘market’. Ironically, Lansley is able criticise them for giving preferential treatment to private companies. Not only did they pay them more money than NHS organisations but they gave them contracts which guaranteed full payment regardless of whether they fulfilled the amount of work they were contracted to do. Hence the ludicrous situation where private companies were paid for work they failed to carry out whilst NHS organisations were financially penalised for doing “too much” work.

Milliband says:

As we debate this government’s proposals for the NHS, we must learn the lessons of the past and properly address the challenges of the future.”

But he fails to learn any lessons from New Labour’s NHS policy. He says:

Whilst satisfaction is the highest ever, the huge challenges that the NHS faces, must be addressed. I do so, clear that whichever party was currently in power, the NHS would need to be driving greater efficiency through the system.”

This sounds like support for the £20 billion “efficiency savings” which New Labour set in train.

He goes on to make an offer to Cameron in relation to his Bill.

If there is a genuine attempt to address the weaknesses of the Tory reorganisation proposal then my party will enter into a debate about a new plan with an open mind, accepting that any NHS plan must be delivered within a tight spending settlement.”

But the Bill does not have “weaknesses”, nor does it merely “undermine the ethos of the NHS” as Milliband says. It threatens the very existence of the NHS and its replacement by an unfettered market. As Len Mcluskey said yesterday “within months the service we know and trust will disappear”. If the government is adopting (as Millband says) a “year zero approach”, and is “ideological and reckless”, how can you amend out its “weaknesses”?

The step which Millband fails to take – and this would require a break with the ideology and programme of New Labour – is to recognise the need for an end to the health market. Cooperation, which Milliband emphasises in his speech, is undermined by the fact that under the previous government there was competition for contracts. Foundation Trusts – and New Labour intended to turn every Trust into an FT – have to compete for patients and fight for their survival. Indeed they could not be bailed out if they got into financial difficulties, although, of course, they have no control over how many patients come through their doors.

Milliband wants competition that “strengthens the ethos of the NHS”. New Labour believed that competition improved “efficiency”. But efficiency was measured by the balance sheet not by the quality of care. He says that accountability was the goal behind Foundation Trusts. This isn’t true. The purpose of Foundation Trusts was precisely to create a health market in which free standing Trusts, more and more acting like businesses, competed with each other and with private companies for patients. Indeed they had the right to set up private businesses. The “accountability” to local people is based on a spurious membership system in which members can elect some governors but there is no system of accountability and control remains in the hands of Executive Directors.

What will the response of the unions be to his speech. We will have to see. Unite has reproduced his speech in full without comment on their web site. If the unions are to defend the service as well as their members’ jobs then the starting point for their policy must surely be opposition to the £20 billion cuts and the aim of ending the “health market”.

McLuskey is surely right when he says “There is no case for the bill. There is no way it can be redeemed. It will never have the trust of the people. It must be dropped now and every emphasis put on stopping patients suffering from these horrendous spending cuts.” Of course, the horrendous spending cuts are not “Tory cuts” but New Labour ones. Will Len and the others demand of Milliband that he admit that this was a mistake by New Labour, as was its ‘health market’?

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