The Disastrous Consequences of Private Sector Involvement in the NHS

08:38 Monday 10th December 2012
Bigger Breakfast Show
BBC Radio Cambridgeshire

PAUL STAINTON: It’s a big day for the chief executives from two Cambridgeshire hospitals. They’re going to face questions from MPs at a meeting of the Public Accounts Committee. The politicians will be focusing on the finances of Peterborough City and Hinchinbrooke Hospitals. Earlier we heard from Karen Webb, the Regional Director of the Royal College of Nursing. She says she feels sorry for staff and patients at Peterborough City Hospital, which has debts higher than nearly any other on the whole of the NHS. (TAPE)
KAREN WEBB: The issues are very worrying for the people of Cambridgeshire, because ultimately unless the Government makes some higher political decisions about bailing out all of these private finance initiatives around the country, unless Government takes that decision, the only way forward is going to be to lose staff and cut services, neither of which is in the interests of the people of Cambridgeshire. (LIVE)
PAUL STAINTON: Well earlier this year Hinchinbrooke Hospital was taken over by a private company of course called Circle, an idea designed to get the hospital better managed and out of debt. Karen doesn’t think that’s working. Well we can speak to the Conservative MP for Peterborough Stewart Jackson, who’s going to be on that Public Accounts Committee today. Morning Stewart.
STEWART JACKSON: Good morning Paul.
PAUL STAINTON: What are you trying to find out here? Why have you called these two guys in?
STEWART JACKSON: Well I think we’re trying to find out what went wrong, and who took the decisions, and why some of the warning .. flashing warning signs that were quite evident at the time to the regulator, Monitor, to the Strategic Health Authority, and to Ministers, were all ignored. And they pressed ahead with a scheme which was not financially viable.
PAUL STAINTON: Peterborough you’re talking about specifically?
STEWART JACKSON: Yes, in Peterborough. .. and why those over-optimistic projections from the Board and poor financial management, and the assessments that had been made as to how many patients would be at the Hospital over the coming years. All were disregarded by Ministers, and they signed off the project in 2007. And I think what we want to do is actually not really have kangaroo court or any kind of witch trial as to who did what, but we want to learn the lessons of what went wrong, so that we can put to the Treasury a viable proposal to make sure we do defend and enhance front line services at the Hospital.
PAUL STAINTON: Because effectively we’re going to have to keep bailing out these hospitals, aren’t we, over and over and over again to keep them going?
STEWART JACKSON: Yes. I think it’s gone beyond even the Department of Health now. This is a major public finance issue for the Treasury, in that the Hospital Trust is going to be potentially £54 million in deficit. Well you can’t just sub an individual hospital £54 million every year. You have to have a long term sustainable financial solution. And that’s something for the Chancellor of the Exchequer and the Government. It’s well above my pay grade.
PAUL STAINTON: Is it maybe the Hinchinbrooke model could come in in Peterborough? Maybe we can get Circle or another company running the Hospital.
STEWART JACKSON: Well the franchising of Hinchinbrooke Hospital is a first almost in the country, in Cambridgeshire. And actually it’s added slightly to the problems of Peterborough, because in some respects we’re over-provisioned for acute district hospitals, which means that the clinical care that could have gone to Peterborough is going to Leicester Royal Infirmary, Boston. Addenbrookes, and of course Hinchinbrooke. And that isn’t good for the viability of Peterborough. But we’re looking at both cases. And they are obviously slightly different situations.
PAUL STAINTON: Does it worry you that Circle have posted losses as well? They don’t appear to have everything right yet, do they
STEWART JACKSON: No, certainly not. And I think that it’s a case study in handing over a hospital, an acute hospital, to a private company. Obviously the Government hope it works in the long term, and they’ve got to make sure it does work. And if it doesn’t work, then obviously it will set back the case for involving the private sector. I’m not hostile inherently to the private sector being involved in the health service, providing health is always free at the point of use.
PAUL STAINTON: Well they’ve always got to make a profit, haven’t they?
STEWART JACKSON: They have got to make a profit.
PAUL STAINTON: That’s what a lot of people have problems with.
STEWART JACKSON: Well yes, but they’re .. all .. the difference between Peterborough and Hinchinbrooke is Peterborough have got to make a profit, but it’s in the public sector. Because actually if they don’t cut their costs, the deficit’s going to increase. That’s part of the problem. They never delivered on the substantial savings that they had to make.
PAUL STAINTON: What they just went on willy-nilly thinking, oh, somebody will bail us out.
STEWART JACKSON: Well essentially yes. There was a .. from about 1997, there was a consensus in the city, quite rightly, that you couldn’t go on with PDH and Edith Cavell falling apart. They needed £200 million worth of work doing on them. You had to have a new hospital. Fine. But the PFI scheme was disastrous. And obviously we’re picking up the pieces now. And my job is to try and say what are the lessons to be learned and how can we go forward with a viable situation financially.