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Saturday 29th September 2018

People vs PF

  • Royal Liverpool Hospital PFI to be scrapped

    The Royal Liverpool Hospital PFI is to be scrapped and the investors ‘bailed out’. This is a reward for failure which we have known is coming for years. People vs PFI says that the government must end all PFI deals now before the public purse is burdened any further with extortionate compensation deals.

    In May a major academic paper revealed the low cost of nationalising the special purpose vehicles, the companies which sign the private deals with hospitals trusts, local authorities and other public bodies. At the same time the report showed the annual savings each public body could make by bringing the contracts in-house and refinancing the loans.

    The Labour Party has already committed to ending PFI contracts with nationalising the SPVs the ‘presumed preferred approach’.

    COSTS OF PFI

    Not only have PFI deals cost about double what publicly-financed infrastructure would cost, they have produced poor quality buildings, delayed and costly maintenance and service provision. At the Royal Liverpool Hospital we already know that combustible cladding was used by Carillion and a report by construction engineering company Arup is expected to show up more structural problems. Up to a dozen other PFI hospitals are known to have major structural defects

    The collapse of Carillion has merely exposed the tip of the PFI iceberg facing public bodies and the devastating effects on public services, not to mention a host of smaller sub-contractors. Other contractors like Carillion are also reported to be in difficulties, while continuing high costs of financing PFI deals is part of the perfect storm of financial constraints facing public authorities. Are bailouts to continue or can we end this now?

    On Friday headteachers are staging a march on Westminster protesting about ‘unsustainable’ budget shortfalls. One element of schools budgets now are PFI costs and heads complain about the constant headache of chasing up maintenance contractors. Costs for simple jobs, such as supplying a new key or providing a new washbasin in children’s toilets are astronomical and take constant chasing.

    Nationalising the special purpose vehicles would cost £2.6bn and bring immediate savings of about £1.5bn per year. Following that it would be possible to bring the provision of services and maintenance back ‘in-house’ so that it is done by workers employed by public authorities as it used to be, and refinance outstanding loans.

    References

    (1) Mercer, H.and Whitfield, D. Nationalising Special Purpose Vehicles to end PFI” Greenwich University, PSIRU, May 2018. http://gala.gre.ac.uk/20016/1/20016%20MERCER_Nationalising_Special_Purpose_Vehicles_to_End_PFI%20_2018.pdf; http://peoplevspfi.org.uk/2018/05/08/how-much-will-it-cost-to-nationalise-the-special-purpose-vehicles/
    (2) https://www.bbc.co.uk/news/education-45641047
    (3) Mercer, H., The Private Finance Initiative: How come we’re still paying for this?’ People vs PFI (2017). http://peoplevspfi.org.uk/exhibition-how-come-we’re-still-paying-for-this?/ A pdf of this booklet is available on request.


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Friday 21st September 2018

John Lister

  • Unions welcome pause in creation of “subco” companies by NHS trusts

    A short note buried in the Provider Bulletin published by the regulator NHS Improvement has provided a belated and welcome relief from efforts by trusts across the country to chisel savings at the expense of privatising their support staff by creating “wholly owned companies” – widely known as “subcos.”

    The Bulletin instructs trusts throughout England to halt their plans:

    “Please pause any current plans to create new subsidiaries or change existing subsidiaries.

    “We'll be consulting on a new regulatory approach to this in October and following the consultation we will be issuing new guidance.”

    The health unions have been challenging the creation of subcos for the past year, with an intensifying series of confrontations which have seen a subco plan blocked in Bristol, one dropped after repeated strikes at Wrightington, Wigan and Leigh, and another dropped in Mid Yorkshire to avert a 3-day strike. Last week threatened action by UNISON led to Tees, Esk and Wear Valleys NHS Foundation Trust scrapping plans to transfer around 600 staff to private firm Tees, Esk and Wear Valleys Estates FM Ltd.

    Further conflicts were taking shape as the NHS Improvement announcement was made.  

    However in between the successful resistance a number of subcos have been established, in the case of Calderdale and Huddersfield because despite a strong majority ballot vote for strike action insufficient staff had voted to comply with current anti-union laws.

    NHS Improvement must tell trusts not only to drop plans still in the pipeline, but must review and reverse the privatisation that has already taken place, that has stripped thousands of staff of their status as NHS employees and opened the danger of a 2-tier workforce with new employees on inferior conditions.

    Responding to NHS Improvement’s announcement UNISON head of health Sara Gorton said:

    “This whole policy has been a damaging distraction. Valuable resources that could have gone on improving care have been wasted.Saving money has been the sole motive for outsourcing jobs to private companies. Cash-strapped trusts have seen it as an opportunity for solving their financial woes.

    “But they didn’t anticipate the outrage among staff and including porters, cleaners and those in catering who want to stay in the NHS. Recent threatened action by UNISON at Tees and industrial action at Wigan successfully stopped subco plans in their tracks.

    “The NHS is already set to face another tough winter. Trusts must now plan ahead and work with unions to make the best possible use of resources.”

    Unite, too, has hailed ‘a significant victory’ in its campaign to stop NHS trusts in England setting up wholly owned subsidiaries designed to avoid paying tax.

    The news came as Unite members at East Kent Hospitals University NHS Foundation Trust and York Teaching Hospital NHS Foundation Trust were gearing up to take strike action in separate disputes about being transferred to a subsidiary company.

    Unite is concerned that trusts are forming these wholly owned subsidiary companies in England so that they can register for VAT exemption and compete on a level playing field with commercial competitors who register for VAT exemption for their work in the NHS, when NHS trusts can’t.

    Unite national officer for health Colenzo Jarrett-Thorpe has written to NHS Improvement chief executive Ian Dalton saying that the creation of these subsidiaries is not ‘the correct prescription for financial efficiency in the NHS’, after years of budgetary constraint which has put the NHS in England ‘under serious and unprecedented pressure’.

    Unite is calling for:

    • HMRC to close the tax loophole, so NHS trusts are not forced to consider outsourcing NHS services to private limited companies in the form of wholly owned subsidiaries.
    • NHS Improvement on behalf health and social care secretary Matt Hancock to immediately call a moratorium on the further establishment of private limited companies by NHS trusts in England, even with trusts that have gained board approval.

    In his letter, Colenzo Jarrett-Thorpe added:

    “The increasing tendency of NHS trusts to create wholly owned subsidiaries in the form of private limited companies could lead to a flood of dozens of Carillion type situations across England. 

    “We believe any VAT tax saving could ultimately turn into fool’s gold, if the tax loophole is closed by HMRC.”

    Commenting on NHS Improvement’s intervention, Colenzo Jarrett-Thorpe said:

    “We regard this as a significant victory in Unite’s long-running campaign to stop the creation of such subsidiaries – and then to reverse them. We believe this is in the best interests of patient safety and our members who wish to remain employed by the NHS and not outsourced to an outfit where their pay and employment conditions could be seriously eroded.

    “Clarity is needed from the NHS Improvement statement yesterday on wholly owned subsidiaries since this may be able to help resolve the industrial disputes in East Kent and York regarding employee transfers to wholly owned subsidiaries on 1 October.”

    Unite members will be taking industrial action in East Kent between 24-28 September and in York where there is a 48 hour stoppage between 27-29 September.

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Wednesday 12th September 2018

Respond to NHS England’s consultation on cutting back NHS treatments

  • Help from Keep Our NHS Public

    NHSE consultation to limit access to 17 procedures and why we should respond

    NHSE is going to severely restrict access to 17 procedures on the NHS: four interventions that ‘should not be routinely commissioned, because they are ineffective or have been superseded by a safer alternative; with patients only able to access such treatments where they successfully make an Individual Funding Request’; and 13 interventions that ‘should only be commissioned or performed in specific circumstances where they have been proved to be clinically effective and specific criteria are met’.

    Why we should respond NHSE aims to save £200m per year – less than 0.2% of the NHS budget – and plans to build on this with numerous future restrictions to NHS care.

    Even if this ‘consultation’ is flawed (the practice is already widespread) and motivation is financially-driven, it is still worth doing the survey – making the political point that the proposals have not gone unopposed.

    It would also help if KONP members wrote letters to the press about it. The general public has little or no idea that this is happening.

    Reading 

    See KONP co-chair/HCT Editor John Lister’s lead article in July’s HCT paper: NHS England plan to exclude treatments

    More in KONP’s guidance

     The consultation runs till 28 September 2018 – please complete NHSE’s survey

    All you need is here:



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Richard Bourne

  • Outbreak of Honesty?

    The NHS trade journal HSJ has reported that - Its been a good week for candour. Today, NHS Improvement finally admitted reality on provider deficits.

    For the first time the system is now admitting what everyone knew anyway which is that the underlying deficit in the NHS is over £4bn. That means the first £4bn (yes £4,000,000,000) of any new money just vanishes.

    Honesty more generally would be good. There is often a sound reason why NHS Bodies make decisions which are controversial – it’s just they always try to avoid the issues rather than deal honestly with them.

    Not long ago there was a huge argument about the government exaggerating the true value of their last funding promises; leading to a rebuke from the Health Committee.

    The issues around the Boards of NHS Trusts (and FTs) agreeing to sign up to control totals that they knew were impossible has been extensively commented upon also in the HSJ – lying about the control total is an accepted strategy for hard pressed Trusts.

    Dishonesty or at least deliberate obscuration was the hallmark of the Sustainability and Transformation Plans (as they were). They should all have started by stating the plans had an outside chance of working but only if there was more money and a repeal of the hated Health & Social Care Act which require competition for everything. Developing these “plans” in secret was bound to make them literally incredible. Many involved admitted privately they just went through the motions and filled out the templates to get the right answers.

    More recently we have the outbreak of forming wholly owned companies. Even a cursory examination of the published business cases shows that almost all the benefits of this cunning plan come from tax changes. This has little or nothing to do with improving services for patients or helping with staffing issues – it is tax avoidance. Yet normally sensible sources, like NHS Providers, go out to make claims that this is all very unfair and the tax issues are a sub text. 

    To make it worse Trusts are refusing to provide information which would allow proper examination of their decisions, for example around forming wholly owned companies. They make claims that information is “commercially confidential” and so exempt from FoI requests. This is public money; no private companies are involved, there is no competition or tendering involved. Yet we are not allowed to know why Boards made the decisions they have – even months or even years after the event. That is dishonesty too.

    And to current issues.

    We are learning, again only by digging, that there is a long and growing list of NHS owned land and buildings potentially up for sale. To make it worse there are private sector partners there to h”help”, probably led by Carillion and Capita.

    Reality tells us that again as a consequence of chronic underfunding there is a huge and worrying backlog of maintenance for existing NHS premises as well as a growing requirement for capital expenditure on new facilities.

    In principle selling off unused land and building or making better use of what is there is good. Many local authorities went through this kind of exercise but what they found was it is not as easy as it sounds to get good value for sales; and it takes a lot of time and effort to reconfigure how buildings are used optimally.

    But yet again this is all dishonest. The reason why sales are need is to plug the huge black hole in funding – where this article began!! Years of underfunding have meant all the accounting tricks, tax dodges and clever wheezes to balance the books have been used up. Selling off the assets is one of the few options left.

    Weak scrutiny by weak directors, dishonesty in reporting, lack of transparency to cover up dishonesty and the bullying of anyone who prefers an honest approach was becoming the norm in our NHS. Let’s hope the HSJ is right and a new era of honest and open communications is upon us.

    But, don’t hold your breath.

Wednesday 22nd August 2018

Mike Forster

  • Green Light For Judicial Review In Fight To Save Local Tyneside NHS Hospital Services in North East

    Public Law Experts at Irwin Mitchell instructed to bring a major legal challenge NHS managers’ decision to move Maternity, Womens Healthcare, Paediatric and Stroke services away from South Tyneside under challenge.

    Lawyers acting for a local campaign group have been given the green light to pursue their legal challenge against NHS Sunderland CCG and NHS South Tyneside CCG as they continue the fight to save South Tyneside Hospital.

    Law firm Irwin Mitchell had previously written to NHS Sunderland CCG and NHS South Tyneside CCG urging them to overturn the decision to move Maternity, Womens Healthcare, Paediatric and Stroke services away from South Tyneside, or potentially face a judicial review in the High Court.

    Now, the High Court has confirmed that Irwin Mitchell, acting on behalf of the Save South Tyneside Hospital Campaign Group, can proceed with its legal action after the two CCGs did not agree to reverse their decision.

    Granting permission, His Honour Judge Saffman said he believed the grounds put forward by lawyers at Irwin Mitchell were ‘sufficiently arguable such as to justify the granting of permission.’

    Yogi Amin, a partner and Head of Public law and Human Rights at Irwin Mitchell, said: “Following our instruction by the South Tyneside Hospital Campaign Group, we argued that there were grounds for a judicial review of the decision taken by NHS managers at South Tyneside CCG and NHS Sunderland CCG on 21 February.

    “Unfortunately South Tyneside CCG and NHS Sunderland CCG have not shown a willingness to reconsider the decision, therefore we welcome the High Court’s decision to grant permission to pursue a judicial review. This is the next step in the legal case to save the local NHS Hospital services.”

    Following a review by the South Tyneside NHS Foundation Trust and City Hospitals Sunderland NHS Foundation Trust, a public consultation was held into changes of three key services at South Tyneside Hospital. The consultation closed on 15 October 2017.

    A joint decision was then taken in February this year by NHS Sunderland CCG and NHS South Tyneside CCG to approve the proposals put forward by the two NHS Trusts.

    The three services included in the public consultation were: urgent and emergency paediatrics, stroke services and maternity and women’s healthcare.

    Roger Nettleship, a spokesperson for the Save South Tyneside Hospital Campaign Group, said: “Our stand is to safeguard the future of South Tyneside Hospital and its acute and emergency services. Families are very concerned about their vital NHS children and women’s health hospital services.

    “We believe that the proposed changes will be a potential disaster for the people of South Tyneside and Sunderland.

    “We are happy that our legal challenge can continue after being granted permission to seek a judicial review of the proposed plans. It is disappointing that after being urged to reconsider its actions, NHS Sunderland CCG and NHS South Tyneside CCG have shown no sign of being willing to do so.”

    No date has yet been set for the hearing, following the approval of the judicial review application.

    Helen Smith, a Public Law specialist at Irwin Mitchell’s Newcastle office, added: “This is obviously a very important issue and one which affects thousands of people’s access to much needed, potentially life-saving local NHS hospital services. This is why it is crucial that any decision made in respect of those services, is made correctly and lawfully.

    “Our legal challenge raises questions around the decisions taken by the CCGs because of a potentially flawed consultation process which breached the principles of procedural fairness and decisions made on the basis of potential flaws in the transport analysis.

    “Our clients believe the proposals to transfer the NHS services to Sunderland were based on a flawed assessment of the impact on patients and that the criteria to assess the cost of this was also flawed.”

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