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What Labour must do to prove that the NHS is ‘safe in its hands’
The problem with the mantra, “The NHS is safe in our hands”, is that it sums up a lean-management approach to management of the NHS. Whilst heralded by some as a ‘success’ in the National Health Service as an efficient way of doing things, its reputation in the private sector is rather more notorious. It is associated with a ‘just-in-time’ approach, where things are always done at the last minute. Where there is relevant to operations management is that if anything untoward happens the system becomes quite unable to cope. Take for example a major road traffic accident, or any similar clinical incident.
Labour will ultimately wish more than the basic aspiration that “NHS is safe in its hands”. This would be like me reassuring you if you asked me to childmind your baby, “You can rest assured that I won’t kill your lovely baby tonight.” And yet possibly expectations for the NHS have become rather low. The formidable campaigner, Marcus Chown, has a tweet which you often see in circulation thus:
Take for example this tweet from 18 March 2012:
Many accept this claim to be a bare-faced lie. The idea that David Cameron and the Conservative Party are simply pathological liars about the NHS is not new. They intended a full-blown reorganisation of the #NHS prior to coming into Government, and yet stubbornly refused to put it in their 2010 manifesto. Further to this, Cameron has previously made pledges to save A&E hospitals which his Government has subsequently shut down, and yesterday did a full-frontal U-turn on minimum pricing in alcohol. In terms of currency in credibility, Cameron needs to ‘sell, sell, sell’, encapsulated in the spirit of another famous tweet by Marcus Chown:
Again, it’s a case maybe of, “If I were starting now, I wouldn’t go from here.” But we’re now stuck with the Health and Social Care Act (2012), that is until Labour decides to repeal it. However, that as we all know is only part of the story. Removing the 50% of cap from private income (section 164(1)(2A)) and redrafting the Regulations associated with procurement such that the default option is not price competitive tendering (section 75) should be the relatively easy parts. There’s still the problem for all parties of how the NHS can be legislated for integration, as strictly speaking bundling offends EU competition law if it distorts trade.
Ed Miliband has been deeply immersed in a debate about party funding and transparency. Whilst Matt Forde claimed this week on “This Week”, the flagship politics show presented by Andrew Neil, that the Unions to have a “strangehold” on the Labour Party, it is not terribly certain how robust Labour’s opposition to Royal Mail privatisation will be. It is also noteworthy that UNISON violently opposed the ‘Private Finance Initiative’, admittedly brought in through Ken Clarke and John Major in the mid 1990s, but which Labour (and the Conservatives) have subsequently embraced. The loans for PFI have benefited the private sector, and the funding of NHS Foundation Trusts via this route has led some lawyers representing these trusts to withhold vital information such as staffing levels on the grounds that such information is “commercially sensitive”.
Therefore, Labour, even if offers a ‘safe alternative’ to the funding gap and the mechanism of procurement in a future Government, does not offer anything startingly different on the Private Finance Initiative. This would not matter if this issue was completely unknown to voters, but the issue is very well known. Some members of the public know that it is known as ‘off ledger accounting’, and that City firms are still very positive about it. Andy Burnham MP has long argued that the PFI was essential for improving the infrastructure of hospitals, e.g. spanking new businesses, but this is small beer for wards and NHS services being stripped to the bone. NHS Trusts being run with a skeleton staff at full capacity, such that Doctors and nurses feel they can’t cope, are becoming commonplace. This is as being justified in terms of the ‘necessary’ £20bn of NHS savings which have to be found until 2020 at least. No party wishes to challenge these savings, and that is partly the reason they find Sir David Nicholson a useful lightning conductor. He is the natural conduction rod for public anger, and indeed the Daily Mail’s anger, whereas all that is happening is that the messenger is being shot, and another messenger will possibly take over next year, for example Mark Britnell.
Labour does not wish to challenge the idea that the NHS is being stripped of necessary funds to do the job properly. If the demands from ageing and technological advances have increased as Nicholson and others claims, surely it is unfeasible to maintain the same level of service when you are barely changing the budget in incremental terms from year to year? Labour’s failure to challenge this dogma is at the heart of its other failings. It cannot embrace the disasters at Mid Staffs and Morecambe Bay while it is fully signed up to efficiency savings. Nobody can deny that any large organisation needs to be run at maximum productivity and efficiency, but when there is consistent robust evidence that adequate numbers of Doctors and Nurses saves lives this is a problem. Labour’s new line of attack is that the “hedgies” (hedge funds) have a strangehold on Tory policy, a weapon utilised to great effect by Ed Miliband in Prime Ministers’ Questions only this Wednesday (10 July 2013). It is a poorly kept secret that private sector entities made massive donations to the Conservative Party prior to the 2010 General Election, and as a result of the new NHS legislation, this situation latterly appeared (source):
For all the ranting by the Conservatives and Labour about “choice”, ultimately voters seem to have little choice where it matters. Citizens of Trafford and Lewisham appear to have little choice over their A&Es locally shutting. Reconfigurations seem to happen from Jeremy Hunt with little consultation with the public. Labour’s public opposition to these distressing reconfigurations seems to be minimal, in a way almost to suggest a collusion with the Government agenda to “reconfigure to save money”. And the dogma of the efficiency savings from the Department of Health goes unchallenged, including the surplus returned to the Treasury, in parallel to the big ticket numbers expenditure-wise going unchallenged. How come it’s possible to find the billions of HS2, another initiative which few people remember ‘voting for’, which has a dodgy business plan, and yet is unanimously agreed upon by all parties (like PFI)? It has become unacceptable to challenge anything coming out of the private sector, whether it’s the efficiency savings advised by McKinsey’s who have been advising on re-disorganisations since time began, well certainly since 1974 anyway. Coupled with this with toothless regulators (and in the CQC’s case a regulator which is allocating resources to protect its own reputation and whose own Report it is alleged is a ‘cover up of a cover up’), it is possible that the damage done by efficiency savings will go unnoticed. If the focus remains on reputational succes of NHS Trusts, and the reputational success of politicians of all ilk, any collusion between the Regulators and politicians to achieve NHS Foundation Trust will be disastrous. Andy Burnham has vehemently denied that there has been any such pressure thus far, but the future of the NHS Foundation Trust is highly relevant. Despite it being a noteworthy policy failure in Spain, the widespread conversion of hospitals to NHS Foundation Trusts could be the perfect stepping stone for super-hospitals, and in a market where supplier power is King, they may prove yet to be the perfect vehicle for the final part of NHS privatisation.
The thing is while it is easy to hide poor financial performance of the hospital, and this is after all the metric that will pay the salaries of CEOs in NHS Foundation Trusts, it is alarmingly easy to hide morbidity and excess mortality of NHS hospitals. Nobody wants to go into hospital to put their own life at risk, and yet we have this ludicrous situation, generated by all the political parties, where nobody accepts blame, and senior managers are in a ‘revolving door’ around the system with generous rewards for, ultimately, failure. The idea of the National Health Action party being the next Government is frankly ludicrous, which is why it is all the more important that Labour can strengthen its relationship with the Unions. However, the efforts of the NHA Party in putting this crucial agenda on the map are completely worthwhile if they move forward from being simply a ‘party of protest’. Maybe despite having been born out of the Unions to represent workers in Parliament, Labour does not feel that it should offer unfair advantage to the Unions, but this would be catastrophic in policy terms. The “democratic deficit” on the NHS is extremely bad, with the general public and the medical professions completely ignored on a range of issues, most recently plain packaging of cigarettes and minimum alcohol pricing. It’s the singularly obsessional Labour phobia of the perception of its relationship with the Unions with the right-wing press which means that it too might easily go down the route of being susceptible to powerful corporate lobbying over diet, alcohol, smoking, and the such like. This stems from the basic issue of turning the NHS into a profitable business, as a “wealth creator”. It is a world apart from “The Spirit of 45″, and Labour knows that it is sitting on an extremely comfortable lead of about 10% compared to the Conservatives.
Labour has to learn not to abuse this public faith in it regarding the NHS, and take a “second look” at NOT embracing a neoliberal, un-evidence based approach to medicine. It, like the NHS, has to learn from failure. Whilst whole-person or integrated care is important, it must never become, fundamentally, distraction therapy from the threats still posed by PFI and efficiency savings. Labour has been desperate for the Risk Register to be published, but it is highly likely that the Risk Register will also expose failures from their watch in Government.
It’s not the case that Labour is ‘sleepwalking’ into a disaster. It already has sleep-walked into a disaster, and it’s high time to retreat. Soon, it will be the case, at best, that people are not wishing to vote Labour over the NHS, but they represent “the best of a bad bunch”. Yet this ironically is entirely in keeping with the “just in time” philosophy of doing the rock bottom or “more for less”. Labour appears to be suffering from a ‘poverty of aspiration’, and whilst the emphasis in policy seems to be one of ‘equality of opportunity’ for profit-making healthcare private providers, it is this poverty of aspiration that might ultimately kill the NHS.
The author can easily be contacted on Twitter @legalaware.
Compromise agreements, redundancy and efficiency – the ingredients of a ‘perfect storm’ in the NHS?
The NHS spent £15 million in three years on gagging whistleblowers, according to the Daily Mail. In just three years there were 598 ‘special severance payments’, almost all of which carried draconian confidentiality clauses aimed at silencing whistleblowers. They cost the taxpayer £14.7million, the equivalent of almost 750 nurses’ salaries.
Whistleblowers have found them at the end of such agreements, and why the NHS culture is not one of transparency and trust is a damning observation. Compromise agreements have also been used in ‘genuine’ situations of redundancy. Redundancy arises when an employer either:
- Closes the place of work; or
- Reduces the number of employees which are employed by it.
The employer is under an obligation to pay a redundancy award to any employee who is dismissed by reason of redundancy if that employee has two years’ service or more. From an employee’s perspective, it is quite common that when employment ends, you and your employer agree to enter into a “Compromise Agreement”. The purpose of the compromise agreement is to regulate matters arising from the termination. A compromise agreement is a legal document that records the agreement between an employee and employer whereby the employee agrees to ‘compromise’, or not to bring, a claim against the employer in relation to any contractual or statutory claims they may have in relation to their employment or the manner of its termination. This type of agreement is typically in return for the payment of a sum of money from the employer to the employee. It may also contain details of additional ancillary agreements between the parties on topics such as: ongoing confidentiality/ restrictions, agreed form references etc.
Compromise Agreements can be very effective and, in essence, amount to a ‘clean break’ that, hopefully, benefit both parties and enable everyone to move on. They are enshrined in law through s.203 Employment Rights Act (1996). A dismissal by reason of redundancy can amount to an unfair dismissal. There are other statutory reasons for unfair dismissal which are allowed, which are cited earlier in the Employment Rights Act.
A dismissal by reason of redundancy can amount to an unfair dismissal. Issues which render such dismissal unfair often include:-
- The selection of a pool of employees from which the redundant candidate is chosen;
- The criteria for such selection; and
- Failure to consult appropriately.
The House of Commons Committee of Public Accounts published a document “Department of Health: progress in making NHS efficiency savings: Thirty-ninth Report of Session 2012–13″ on 13 March 2013. The discussion between Meg Hillier and Mike Farrar talks about redundancy payments, but interestingly this document does not refer to ‘compromise agreements’ once.
“Q29 Meg Hillier: Maybe at chief executive level, but I know for a fact that there are people out there who have taken generous redundancy payments—they may genuinely have thought they were not going to work in the NHS again—but there is such demand for their skills and services that they have been brought back in. There seems to be no real ability to have safeguards. I know they are your members, so maybe it is in your interests for them to get these positions, but this is about all taxpayers’ money, and in the end it affects everyone.
Mike Farrar: We have tried to support the management of people through the system to the best possible place to get the best value for taxpayers; that is what we would want to see. The reforms have abolished authorities and organisations. People have not been able to take redundancy unless they were eligible for redundancy on the basis that their organisation has been abolished. That has allowed management cost savings of a significant level—
Q30 Chair: Well, we do not know, because you might have had a whole load of management costs in terms of redundancy, with people then re-emerging elsewhere. We are very sceptical.
Mike Farrar: I think the reforms of this House are responsible for certain people having been eligible for redundancy. There is a notion that those individuals leapt at the chance to be made redundant in order to deploy their services back, but that has only been created in terms of an opportunity because of reforms passed by the House. Some of these points were made during the passage of the Bill. “
HM Government has never published its “Risk Register” for the Health and Social Care Act (2012), despite the guidance involving the Information Commissioner. Today’s Report published by the National Audit Office on the use of compromise agreements makes for depressing reading:
“There is a lack of transparency, consistency and accountability in the use of compromise agreements in the public sector and little is being done to change this situation, an investigation by the National Audit Office has found.
Public sector workers are sometimes offered a financial payment in return for terminating their employment contract and agreeing to keep the facts surrounding the payment confidential. The contract is often terminated through the use of a compromise agreement and the associated payment is referred to as a special severance payment.
The spending watchdog highlights the lack of central or coordinated controls over the use of compromise agreements. The NAO was not able to gauge accurately the prevalence of such agreements or the associated severance payments. This was down to decentralized decision-making, limited recording and the inclusion of confidentiality clauses which mean that they are not openly discussed. No individual body has shown leadership to address these issues; the Treasury believes that there is no need for central collection of this data.”
It could be there that there is a fundamental faultline in how performance management in the NHS is currently being implemented, in which commercial lawyers are not quite silent bystanders. That is, the NHS has found itself in a situation where it is generating efficiency savings, which do not get ploughed back into frontline care. A reasonable place to start is also the implementation of the Health and Social Care Act (2012), and this complex strategic restructuring has obviously had its opportunity cost, even as described on Wikipedia here:
When you have CEOs and NHS Foundation Trusts being judged by their ‘efficiency savings’ which may involve redundancies (though these parties will argue that many of these staff are mostly employed back), the performance management system is heavily weighted against long-serving staff with experience and skills of working in the NHS who ought to be cherished for ‘adding value’. This is clearly a massive fault with how the NHS rewards ‘success’ in the NHS (and if the CQC’s recent scandal and more are anything to go by does not appear to punish ‘failure’ in the regulatory system, either.) And when you add to that that the experience of NHS whistleblowers, often at the receiving end of compromise agreements with suboptimal legal advice (whereas the NHS has access to the best commercial and corporate lawyers), is that whistleblowers tend to get humiliated and marginalised to such an extent that they never work again, you can see how compromise agreements, while certainly enshrined in law for a legitimate person, along with an alleged lack of teeth of the Public Interest Disclosure Act (1998), has successfully allowed a ‘toxic culture’ to perpetuate very successfully indeed?
Outsourcing and the "modern anomie"
Jon Cruddas recently gave a progress report on how the evolution of ‘One Nation’ policy was going, In an article by Patrick Wintour published yesterday, Cruddas describes a ‘modern anomie’, a breakdown between an individual and his or her community, and alludes to the challenge of institutions mediating globalisation. Cruddas also describes something which I have heard elsewhere, from Lord Stewart Wood, of a more ‘even’ creation of wealth, whatever this means about the even ‘distribution’ of wealth. One of the lasting legacies of the first global financial crisis is how some people have done extremely well, possibly due to their resilience in economic terms. For example, it has not been unusual for large corporate law firms to maintain a high standard of revenues, while high street law has come close to total implosion in some parts of the country. In a way, this reflects a shift from pooling resources in the State to a neoliberal free market model.
The global financial crash did not see a widespread rejection of capitalism, although the Occupy movement did gather some momentum (especially locally here in St. Paul’s Cathedral). It produced glimpses of nostalgia for ‘the spirit of ’45”, but was used effectively by Conservative and libertarian political proponents are causing greater efficiencies. Indeed, Marks and Spencer laid off employees, in its bid to decrease the decrease in its profits, and this corporate restructuring was not unusual. A conservative and a libertarian have several things in common, the most important is the need for people to take care of themselves for the most part. Libertarians want to abolish as much government as they practically can. It is thought that the majority of libertarians are “minarchists” who favour stripping government of most of its accumulated power to meddle, leaving only the police and courts for law enforcement and a sharply reduced military for national defence. A minority are possibly card-carrying anarchists who believe that “limited government” is a delusion, and the free market can provide better law, order, and security than any goverment monopoly.
Essentially a libertarian would fund public services by privatising them. In this ‘brave new world’, insurance companies could use the free market to spread most of the risks we now “socialise” through government, and make a profit doing so. That of course would be the ideal for many in reducing the spend on the NHS, to produce a rock-bottom service with minimal cost for the masses. And to give them credit, the Health and Social Care Act was the biggest Act of parliament, that nobody voted for, to outsource the operations of the NHS to the private sector, which falls under the rubric of privatisation. Outsourcing is an arrangement in which one company provides services for another company that could also be or usually have been provided in-house. Outsourcing is a trend that is becoming more common in information technology and other industries for services that have usually been regarded as intrinsic to managing a business, or indeed the public sector.
Many expected the election of the present government to herald a more determined approach to outsourcing public services to the private sector. Initially came the idea of the “big society”, with its emphasis on creating and using more social enterprises to deliver public services, but the backers for this new era of venture philanthropism were not particularly forthcoming. The PR of it, through Steve Hilton and colleagues, was disastrous, and even Lord Wei, one of its chief architects, left. No one in the UK likes the idea of domestic jobs moving overseas. But in recent years, the U.K. has accepted the outsourcing of tens of thousands of jobs, and many prominent corporate executives, politicians, and academics have argued that we have no choice, that with globalisation it is critical to tap the lower costs and unique skills of labor abroad to remain competitive. They argue that Government should stay out of the way and let markets determine where companies hire their employees. But is this debate ever held in public? No, there was always a problem with reconciling the need for cuts with an ideological thirst for cutting the State. Unfortunately, cutting the State was cognitively dissonant with cutting the ‘safety net’ of welfare, which is why the rhetoric on scroungers had to be ‘upped’ in recent years by the UK media (please see original source in ‘Left Foot Forward’). And so it came to be, the Compassionate era of Conservatism came to pass.
Here in the UK, in 2010, the government indicated that it wanted to see new entrants into the outsourcing market, and the prime minister visited Bangalore, the heart of India’s IT and outsourcing industry, for high profile meetings with chief executives of companies such as TCS, Infosys, HCL and Wipro. Nobody ever bothers to ask the public what they think about outsourcing, but if Gillian Duffy’s interaction with Gordon Brown is anything to go by, or Nigel Farage’s baptism in the local elections has proved, the public is still resistant to a concept of ‘British jobs for foreign workers’. However, it is still possible that the general public are somewhat indifferent to screw-ups of outsourcing from corporates, in the same way they learn to cope with excessive salaries of CEOs in the FTSE100. The media have trained us to believe that unemployment rights do not matter, and this indeed has been a successful policy pursued by the Conservatives and Liberal Democrats. People do not appear to blame the Government for making outsourcing decisions, for example despite the fact that the ATOS delivery of welfare benefits claims processing has been regarded by many as poor, the previous Labour government does not seem to be blamed much for the current fiasco, and the current fiasco has not become a major electoral issue yet.
And the list of screw-ups is substantial. G4S – the firm behind the Olympic security fiasco – has nowbeen selected to support the Police Service of Northern Ireland at the G8 Summit next month. Despite the company’s botched handling of the Olympics Games contract last summer, G4S has been chosen to supply 450 security staff for the event at Lough Erne, County Fermanagh The leaders of the world’s eight wealthiest countries are expected in Fermanagh on June 17 and 18. Meanwhile, medical assessments of benefit applicants at Atos Healthcare were designed to incorrectly assess claimants as being fit for work, according to an allegation of one of the company’s former senior doctors has claimed. Greg Wood, a GP who worked at the company as a senior adviser on mental health issues, said claimants were not assessed in an “even-handed way”, that evidence for claims was never put forward by the company for doctors to use, and that medical staff were told to change reports if they were too favourable to claimants. Elsewhere, Scotland’s hospitals were banned from contracting out cleaning and catering services to private firms as part of a new drive towards cutting the spread of deadly superbugs in the NHS. There were 6,430 cases of C. difficile infections in Scotland in one year recently, of which 597 proved fatal. The problem was highlighted by an outbreak of the infection earlier this year at the Vale of Leven hospital in Dunbartonshire which affected 55 people. The infection was identified as either the cause of, or a contributory factor in, the death of 18 patients.
Whatever our perception of the public perception, the impact on transparency and strong democracy merit consideration. As we outsource any public service, we appear to risk removing it from the checks and balances of good governance that we expect to have in place. Expensive corporate lawyers can easily outmanoeuvre under-resourced government departments, who often appear to be unaware of the consequences, and this of course is the nightmare scenario of the implementation of the section 75 NHS regulations. Even talking domestically, Where contracts privilege commercial sensitivities over public rights, they can be used to exclude the provision of open data or to exempt the outsourcer from freedom of information requests. Talking globally, “competing in the global race” has become the buzzword for allowing UK companies to outsource to countries that do not have laws (or do not enforce laws) for environmental protection, worker safety, and/or child labour. However, all of this is to be expected from a society that we are told wants ‘less for more’, but then again we never have this debate. Are the major political parties afraid to talk to us about outsourcing? Yes, and it could be related to that other ‘elephant in the room’, about whether people would be willing to pay their taxes for a well-run National Health Service, where you would not be worried about your local A&E closing in the name of QUIPP (see this blogpost by Dr Éoin Clarke). Either way, Jon Cruddas is right, I feel; the ‘modern anomie’ is the schism between the individual and the community, and maybe what Margaret Thatcher in fact meant was ‘There is no such thing as community’. If this means that Tony Blair feels that ‘it doesn’t matter who supplies your NHS services’, and we then get invasion of the corporates into the NHS, you can see where thinking like this ultimately ends up.
Outsourcing, NHS, and the “modern anomie”
Jon Cruddas recently gave a progress report on how the evolution of ‘One Nation’ policy was going, In an article by Patrick Wintour published yesterday, Cruddas describes a ‘modern anomie’, a breakdown between an individual and his or her community, and alludes to the challenge of institutions mediating globalisation. Cruddas also describes something which I have heard elsewhere, from Lord Stewart Wood, of a more ‘even’ creation of wealth, whatever this means about the even ‘distribution’ of wealth. One of the lasting legacies of the first global financial crisis is how some people have done extremely well, possibly due to their resilience in economic terms. For example, it has not been unusual for large corporate law firms to maintain a high standard of revenues, while high street law has come close to total implosion in some parts of the country. In a way, this reflects a shift from pooling resources in the State to a neoliberal free market model.
The global financial crash did not see a widespread rejection of capitalism, although the Occupy movement did gather some momentum (especially locally here in St. Paul’s Cathedral). It produced glimpses of nostalgia for ‘the spirit of ’45”, but was used effectively by Conservative and libertarian political proponents are causing greater efficiencies. Indeed, Marks and Spencer laid off employees, in its bid to decrease the decrease in its profits, and this corporate restructuring was not unusual. A conservative and a libertarian have several things in common, the most important is the need for people to take care of themselves for the most part. Libertarians want to abolish as much government as they practically can. It is thought that the majority of libertarians are “minarchists” who favour stripping government of most of its accumulated power to meddle, leaving only the police and courts for law enforcement and a sharply reduced military for national defence. A minority are possibly card-carrying anarchists who believe that “limited government” is a delusion, and the free market can provide better law, order, and security than any goverment monopoly.
Essentially a libertarian would fund public services by privatising them. In this ‘brave new world’, insurance companies could use the free market to spread most of the risks we now “socialise” through government, and make a profit doing so. That of course would be the ideal for many in reducing the spend on the NHS, to produce a rock-bottom service with minimal cost for the masses. And to give them credit, the Health and Social Care Act was the biggest Act of parliament, that nobody voted for, to outsource the operations of the NHS to the private sector, which falls under the rubric of privatisation. Outsourcing is an arrangement in which one company provides services for another company that could also be or usually have been provided in-house. Outsourcing is a trend that is becoming more common in information technology and other industries for services that have usually been regarded as intrinsic to managing a business, or indeed the public sector.
Many expected the election of the present government to herald a more determined approach to outsourcing public services to the private sector. Initially came the idea of the “big society”, with its emphasis on creating and using more social enterprises to deliver public services, but the backers for this new era of venture philanthropism were not particularly forthcoming. The PR of it, through Steve Hilton and colleagues, was disastrous, and even Lord Wei, one of its chief architects, left. No one in the UK likes the idea of domestic jobs moving overseas. But in recent years, the U.K. has accepted the outsourcing of tens of thousands of jobs, and many prominent corporate executives, politicians, and academics have argued that we have no choice, that with globalisation it is critical to tap the lower costs and unique skills of labor abroad to remain competitive. They argue that Government should stay out of the way and let markets determine where companies hire their employees. But is this debate ever held in public? No, there was always a problem with reconciling the need for cuts with an ideological thirst for cutting the State. Unfortunately, cutting the State was cognitively dissonant with cutting the ‘safety net’ of welfare, which is why the rhetoric on scroungers had to be ‘upped’ in recent years by the UK media (please see original source in ‘Left Foot Forward’). And so it came to be, the Compassionate era of Conservatism came to pass.
Here in the UK, in 2010, the government indicated that it wanted to see new entrants into the outsourcing market, and the prime minister visited Bangalore, the heart of India’s IT and outsourcing industry, for high profile meetings with chief executives of companies such as TCS, Infosys, HCL and Wipro. Nobody ever bothers to ask the public what they think about outsourcing, but if Gillian Duffy’s interaction with Gordon Brown is anything to go by, or Nigel Farage’s baptism in the local elections has proved, the public is still resistant to a concept of ‘British jobs for foreign workers’. However, it is still possible that the general public are somewhat indifferent to screw-ups of outsourcing from corporates, in the same way they learn to cope with excessive salaries of CEOs in the FTSE100. The media have trained us to believe that unemployment rights do not matter, and this indeed has been a successful policy pursued by the Conservatives and Liberal Democrats. People do not appear to blame the Government for making outsourcing decisions, for example despite the fact that the ATOS delivery of welfare benefits claims processing has been regarded by many as poor, the previous Labour government does not seem to be blamed much for the current fiasco, and the current fiasco has not become a major electoral issue yet.
And the list of screw-ups is substantial. G4S – the firm behind the Olympic security fiasco – has nowbeen selected to support the Police Service of Northern Ireland at the G8 Summit next month. Despite the company’s botched handling of the Olympics Games contract last summer, G4S has been chosen to supply 450 security staff for the event at Lough Erne, County Fermanagh The leaders of the world’s eight wealthiest countries are expected in Fermanagh on June 17 and 18. Meanwhile, medical assessments of benefit applicants at Atos Healthcare were designed to incorrectly assess claimants as being fit for work, according to an allegation of one of the company’s former senior doctors has claimed. Greg Wood, a GP who worked at the company as a senior adviser on mental health issues, said claimants were not assessed in an “even-handed way”, that evidence for claims was never put forward by the company for doctors to use, and that medical staff were told to change reports if they were too favourable to claimants. Elsewhere, Scotland’s hospitals were banned from contracting out cleaning and catering services to private firms as part of a new drive towards cutting the spread of deadly superbugs in the NHS. There were 6,430 cases of C. difficile infections in Scotland in one year recently, of which 597 proved fatal. The problem was highlighted by an outbreak of the infection earlier this year at the Vale of Leven hospital in Dunbartonshire which affected 55 people. The infection was identified as either the cause of, or a contributory factor in, the death of 18 patients.
Whatever our perception of the public perception, the impact on transparency and strong democracy merit consideration. As we outsource any public service, we appear to risk removing it from the checks and balances of good governance that we expect to have in place. Expensive corporate lawyers can easily outmanoeuvre under-resourced government departments, who often appear to be unaware of the consequences, and this of course is the nightmare scenario of the implementation of the section 75 NHS regulations. Even talking domestically, Where contracts privilege commercial sensitivities over public rights, they can be used to exclude the provision of open data or to exempt the outsourcer from freedom of information requests. Talking globally, “competing in the global race” has become the buzzword for allowing UK companies to outsource to countries that do not have laws (or do not enforce laws) for environmental protection, worker safety, and/or child labour. However, all of this is to be expected from a society that we are told wants ‘less for more’, but then again we never have this debate. Are the major political parties afraid to talk to us about outsourcing? Yes, and it could be related to that other ‘elephant in the room’, about whether people would be willing to pay their taxes for a well-run National Health Service, where you would not be worried about your local A&E closing in the name of QUIPP (see this blogpost by Dr Éoin Clarke). Either way, Jon Cruddas is right, I feel; the ‘modern anomie’ is the schism between the individual and the community, and maybe what Margaret Thatcher in fact meant was ‘There is no such thing as community’. If this means that Tony Blair feels that ‘it doesn’t matter who supplies your NHS services’, and we then get invasion of the corporates into the NHS, you can see where thinking like this ultimately ends up.
Private sector market failure is more of a problem than public sector inefficiency
To advise that public sector inefficiency is the reason why we are in recession is sheer science-fiction. It’s how management used to be taught a few decades, with reference to the seminal work of Frederick Taylor, productivity and lighting. In the late nineteenth and early twentieth centuries, Frederick Taylor was decrying the ” awkward, inefficient, or ill-directed movements of men” as a national loss. He advocated a change from the old system of personal management to a new system of “scientific management”. Scientific management met with significant success. Taylor’s personal work included papers on the science of cutting metal, coal shovel design, worker incentive schemes and a piece rate system for shop management. Scientific management’s organisational influences can be seen in the development of the fields of industrial engineering, personnel, and quality control.
This notion of productivity has been pervasive in ‘reforms’ of the public sector, such as the National Health Service. However, the problem which faces strategic change managers, trying to implement change in the NHS, is that data currently provide that the NHS model is extremely efficient already, and the NHS is not easily amenable to reductionist metrics; it might be easier to calculate the number of bed-days involved in a given surgical procedure, than to count the cost of a new diagnosis of dementia. Counting the cost in raw terms is intrinsically difficult for different health providers in different submarkets of health, especially when you consider the value of different products and services in health vary markedly – for this ‘quasi-market’, this means comparing apples and bananas, and this is one of many technical flaws in the new Health and Social Act which should have been eliminated by the Liberal Democrats.
The supremacy of the markets in England has instead been used as a threat. We were continually to vote conclusively for a particular party to avoid a Hung Parliament, such was the lack of confidence by the Conservatives in winning prior to May 2010. This prediction has been borne out. We have been told about the need to ‘get on top of the deficit’. In fact, the Government has made some progress in reducing the deficit, but the fact that the deficit doubled and the cost of borrowing increased during the course of this year is a direct consequence of the non-Keynesian policies implemented by the Conservatives and the Liberal Democrats. We have been continuously warned about the UK losing his triple A credit rating, but the double-dip recession has in fact been the biggest threat to this for the last few months.
The lack of regulation in new financial products in 2008, to some extent enabled by the creative (and sometimes illegal) practices of some corporates, has led to an extreme market failure, for which many in the public sector, comprising the ‘State’, such as innocent teachers and nurses, have been paying the financial penalty. Meanwhile, the top earners have received a ‘tax cut’, completely unjustifiably. Market failure is also the reason why privatisation has not worked. Privatising trains, water, gas and electricity has not introduced greater competition; it has been a licence to print money for shareholders of those companies, given that these are just a few entities in sectors which can collude lawfully to set prices to maximise profit, with no obligation to improve in material times the quality of their service or product delivery. It is this market failure, which if totally unfettered by liberal and libertarian thinkers, which could lead to massive inequalities; and this matters in specific scenarios such as the National Health Service. Without adequate protection and representation for workers in these sectors, such as through unions for teachers and nurses, and adequate protection and representation for employees in certain other sectors, such as through the British Medical Association, we do have an economy which is fundamentally dictated by shareholders not stakeholders.
The biggest threat for the NHS, specifically, is that private limited companies have a legal obligation to maximise shareholder dividend. This applies to all new entrants into the health sector, such as Virgin Care, and there needs to be stricter legal controls to ensure that healthcare is not compromised in making a profit. Making a profit is not intrinsically undesirable, but it is undesirable if private companies fail on a scale which would be unusual for the public sector. The recent alleged corporate fraud of A4e and criticism of the operations of G4s should provide a salutary warning for this. To imply that the problem is a public sector inefficiency rather than a private sector market failure is actually therefore very offensive indeed.
