Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. — Milton Friedman
A wealthy nation, globally renowned for its public health expertise, with a world-class national health system, is suffering one of the highest Covid-19 death rates in the world. How did we get here? The reality is that this crisis was decades in the making. Our vulnerabilities to the virus are structural and ideological – a hollowed-out state, a fragmented healthcare system, and a nation’s health impoverished. The same ideology that has created these faultlines has also undermined the response. Coronavirus has exposed not only gross incompetence and fragility, but cronyism at the heart of government. We must address the structures in place that allow this crisis to be exploited, with contracts for chums and billions of taxpayers’ money siphoned off to the private sector. This corruption has not only cost unnecessary deaths, but left unchecked could become entrenched in public life, with dangerous consequences for our democracy.
Covid-19 hit following a decade of policy decisions to reduce capacity, resulting in the ‘worst winter on record’ for the NHS, with critical care capacity amongst the lowest in Europe. Alongside chronic underfunding, our NHS has been diminished by 30 years of neoliberal reforms, moving the NHS away from a unified integrated system, toward a fragmented marketised system, ill-equipped to deal with a pandemic. Privatisation started under Thatcher, who introduced the outsourcing of ‘hotel services’, cleaning, laundry and catering. After this year we can all appreciate the importance of hygiene in infection control, but the privatisation of cleaning was synonymous with poor quality services, and a proliferation of hospital-borne infections, such as MRSA. This legacy persists today, with hundreds of thousands of ‘NHS’ workers outsourced. The way in which they are treated as second-class workers has had deadly consequences this year, with many not having risk assessments, adequate PPE or basic protections, including sick pay.
Thatcher introduced the ‘internal market’ into the NHS, forcing hospitals to compete with each other. This is another legacy which persists today. The illogic of market forces in a national health care system led to bizarre circumstances where the government had to ban NHS trusts from competing to procure ventilators and PPE, due to fears it would deplete national supply. The market structure was solidified with the highly controversial 2012 Health and Social Care Act. The Lansley reforms compelled trusts to put services out to competitive tender, opening up opportunities for the private sector to extract profit from our health system. This led to further fragmentation not just within the NHS but also in relationships with local government, and crucially public health. Within a market-based system, there is little incentive to build spare capacity for emergencies, and it is unclear where accountability lies for coordinating a response – both required in a pandemic.
Since this legislation, we have seen a proliferation in NHS services being contracted out to the private sector. Prior to Covid-19, the most recent data showed that private providers accounted for £9bn worth of NHS contracts, 7 per cent of the Clinical Commissioning Groups’ budget. Relying on a host of non-state actors to provide a coordinated response to a health crisis is fundamentally problematic. Private contracts block agility and dynamism, and hinder different services working together, which is essential in a fast-moving pandemic.
These vulnerabilities were not unforeseen. In 2011, 400 public health professionals wrote an open letter warning the Lansley reforms would “undermine the ability of the health system to respond effectively to communicable disease outbreaks and the public health emergencies”. In 2014, a report by independent think tank the Centre for Health and Public Interest stated that a “market-driven health care system underpinned by a series of contracts is ill-suited to the demands of a major health crisis because it prioritises efficiency savings, patient choice and competition between healthcare providers over centralised planning.”
It is within our social care system however, where the most catastrophic failures of the market have been laid bare. Our dysfunctional, largely privatised care system has been unable to protect its residents or staff, with over 19,000 deaths. Eighty-four per cent of care home beds are run by for-profit providers. Alongside the swingeing austerity funding cuts, the care industry leaks 10 per cent of its funds – £1.5bn every year – to investors, private equity firms, and real estate companies that are often based in offshore tax havens. Meanwhile, the workforce remains grossly underpaid. Many are on zero-hours contracts; the lack of work security or basic protections has undoubtedly contributed to high death rates among carers.
The response to the virus has been further compromised by this government’s blind commitment to the private sector. Testing and tracing is a vital component of infectious disease control. Against the advice of public health experts, the government outsourced both elements of the process to private companies, at huge taxpayer expense.
Deloitte was given a contract, of undisclosed value, to set up off-site testing centres and run the new Lighthouse Laboratories, bypassing and undermining existing NHS infrastructure. Deloitte then outsourced the running of these testing centres to numerous other corporations. From the start, there has been a catalogue of cock-ups – samples lost, leaking test vials, barely trained staff, and people directed to nonexistent testing centres. Delays in processing results have left NHS staff unable to work. GPs and local authorities have been unable to receive timely, detailed information on results from these private testing sites. It is this basic failure, that public health experts in Leicester state contributed to the extended lockdown there.
Again bypassing local public health teams, for which contact tracing is their bread and butter, Serco and Sitel have been awarded multi-million contracts to carry out a spectacularly ineffective tracing system. According to government records, approximately one-third of positive cases transferred onto the system were not contacted by call handlers. The consequence of these failures is soaring profits, predicted at £165m. This year, Serco will be paying out dividends to their shareholders, directly from taxpayers.
This string of failures follows the model of previous NHS outsourcing. Extortionate sums of taxpayer money have been handed to the private sector, hidden behind private companies’ use of NHS branding so the public were kept in the dark. Too often there are no consequences for poor performance. Indeed with the Serco contract it has been revealed there is no penalty clause. Furthermore, when the corporations fail to make the profits they desire, they can simply hand the mess they created back to the NHS – as happened with Circle and Hinchingbrooke Hospital – again without any consequences.
Possibly the most invidious part of the government’s response to Covid is how it has exploited this crisis to entrench the private sector within our health service. A contract was agreed in March to ‘block book’ almost the entirety of the private hospital sector’s services and facilities, including 8,000 beds and 1,200 ventilators. Anecdotally, it appears that many of these private facilities have not been used due to a lack of staff. But we do know that the sector has benefited to the tune of an estimated £125m per week from this sweetheart deal. Furthermore, there is already a plan over the next four years to increase taxpayers’ funds going into the private hospital sector. This is effectively a taxpayer bailout for a sector that would have otherwise suffered the fate of so many other businesses, as many private patients were unable to attend due to the pandemic. No contracts have yet been published on this £10bn deal, meaning zero accountability or transparency into how taxpayer money is being spent. The deals segment private providers into future NHS provision, many of which had very few NHS patients prior to the pandemic.
This substantial transfer of power towards the private sector is no accident. It is very much in keeping with the governing party’s ideology. Rupert Soames, grandson of Churchill and CEO of Serco, said in a leaked email that the Covid response went “a long way in cementing the position of private sector companies in the public sector supply chain”.
For a government ‘unable’ to fund school meals, it has an extraordinarily cavalier attitude towards government spending when it comes to the private sector. The Nightingale Hospitals set up to provide care during the pandemic have cost over £350m, but treated fewer than 100 patients. There is a stark lack of transparency in the multi-million pound contracts for medical supplies and hospital equipment awarded to private companies without the usual competitive tender. Contracts for the supply of PPE were given to, among others, a pest control company, an employment agency, and a confectionery manufacturer. Amongst those companies is Ayanda Capital, which specialises in offshore property and private equity, yet won a £150m contract for 50 million FFP2 masks. Not a single mask was used, as they failed safety standards.
Contracts for chums are a recurring theme. Cabinet office contacts have been assisted to award million pound contracts outside normal procurement channels, with potential for enormous profit margins. The conflicts of interest amongst government appointees and advisors are deeply problematic. The corruption and cronyism that has tainted the response to the crisis cannot be overlooked. Public trust, which is vital in managing pandemics, is being destroyed with dangerous, long-term consequences for our democracy.
Alongside coronavirus, we have seen the effects of a second pandemic – one of rampant health inequality, driven by austerity and political apathy. Despite our country’s wealth, a significant proportion of the population were vulnerable to this virus due to underlying conditions. Often, they are the same people without the financial or job security to isolate themselves. We are the sick man of Europe, at the bottom of the league tables for ‘healthy living expectancy’. Covid-19 has acted as a mirror to our society, exposing the injustices that for too long have been left untouched. It is the political response to the last financial crisis that widened the faultlines and left our nation vulnerable. We cannot make the same mistakes in future. We must strengthen the public realm, invest in our public infrastructure and the care economy, and rebuild a society that values our collective health.
As Friedman said: “When that crisis occurs, the actions that are taken depend on the ideas that are lying around”. We cannot afford to be passive. We must robustly challenge the ideology that has allowed this crisis to be exploited for private sector profit. “Only a crisis, real or perceived, produces real change”. It was after the crisis of war that the NHS was created. If we have strength and ambition, Covid-19 could be the catalyst for change.
Image credit: Carsten ten brink/Flickr