Time to End the Market Madness

There’s a grubby little outfit that presides over a lot of the privatisation projects in this country. It’s called ‘Partnerships UK’ – a public-private partnership, set up by the Labour Government, 49% publicly owned and 51% private. Its mission statement is to privatise everything that moves.

You can check out Partnerships UK here. You can tell they’re really good because they’ve got a picture of origami models on their website. The website boasts of PUK’s involvement in the development of the £40 billion PFI market. PUK is crawling all over the NHS these days: in PFI projects, NHS LIFT (the community NHS version of PFI), and in the Autonomous Provider Organisations that are about stripping community health services out of the NHS.

I checked out PUK’s shareholders the other day. They include some real financial success stories: the Royal Bank of Scotland, the Bank of Scotland, Barclays, Abbey National etc. You may recall they’ve been having a spot of bother recently.

The Royal Bank of Scotland has failed so catastrophically it’s almost funny. This is not a little community bank in the Highlands of Scotland, by the way. The Royal Bank of Scotland is a vast financial institution – it owns Nat West, and the insurance company DirectLine. A couple of weeks back, the value of RBS fell by 40% in a single day. At one point, the collapse was so great that RBS was haemorrhaging value by £2 million per second.

I’ve asked the question for a long time, ‘What the hell do banks know about running the NHS?’. It might be legitimate now to ask instead, ‘What the hell do the banks know about running banks?’.

PFI projects are in deep trouble. They’ve always been a disaster from our point of view – a neat con trick for transferring billions of pounds of our money straight into the black hole of the private sector. PFI schemes have been a license to print money. Allyson Pollock‘s excellent summary of some of the lunacies in the NHS notes that shareholders in one Scottish hospital PFI project will reap dividends of £168 million on an equity stake of £500,000 – not a bad rate of return. The Public Accounts Committee has criticised investors in the Norfolk and Norwich PFI hospital of ‘lining their own pockets’.

The challenge for the banks – and for Serco, GSL, Innisfree, Balfour Beatty and all the other profiteers – is that the profits are set to be a whole load less. Banks are lending less, and charging more when they do. In the past, PFI companies have made a pile of extra money through ‘refinancing’ – companies trading debts with one another, making money out of thin air, and getting away with this lunacy until the whole house of cards came tumbling down earlier this month. The Government is now threatening to control this kind of thing.

These companies aren’t sentimentalists. They don’t build hospitals and schools and health centres as a programme of good works – they do it to make money. If the money isn’t there to be made, they’ll walk away.

So where does that leave us? The Government’s now spending £500 billion on bailing out the banks – that’s over five times the budget of the NHS, incidentally. So we could be left without new hospitals and health centres, because the banks have got all the dosh. We could, on the other hand, see the newly nationalised banks and the PFI companies subsidised in continuing to rip off the NHS, as part of the Government’s plans to privatise the health service.  Totally mad, but sadly quite likely.

There’s an alternative, though. The madness of a market approach to the public sector has never been clearer. It’s time to draw a line under this nonsense. The NHS should be about public funding for publicly owned and publicly accountable health care. The hall mark of a decent society is that we look after sick people because we’re human beings and we care about one another. Why should profit have anything at all to do with health care?

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One Response to Time to End the Market Madness

  1. Tatton says:

    Brilliant analysis again Gill. Keep up the good work.

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