The National Health Service

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2003 National Delegate Conference
29 May 2003

Conference welcomes the intention of the Government to increase the funding of the National Health Service (NHS) in England by 7.4 per cent in real terms over five years from 2003/4, and the Government’s stated intention of bringing UK health spending in line with the European average. This funding offers the NHS the opportunity to grow and deliver improved services but brings with it the responsibility to deliver demonstrable results for patients and the public. This is desperately needed as the Wanless Report estimates that the UK has underspent by over £250 billion between 1972 and 1998 compared to the European average.

Conference recognises that the challenge is now to use this money effectively in order to deliver a health service that meets legitimate public and staff expectations. However, Conference is concerned that some of the Government’s policy initiatives are undermining the fundamental founding principles of the NHS and diverting attention away from the central task of improving patient service. In particular, Conference is seriously concerned about the following policy developments:

1)the Government’s continued refusal to consider alternatives to the use of the Private Finance Initiative for hospital capital projects and the extension of the private finance model to the construction of primary care premises through Local Improvement Finance Trusts (LIFT);

2)the adoption of the private sector as a permanent provider of healthcare services to the NHS, including the use of the private sector to establish and operate new clinical and diagnostic centres;

3)the Government’s proposed new financial framework for commissioning outlined in NHS Financial Flows – Introducing Payment by Results. These will fundamentally change the way that funds flow through the NHS and will have serious implications for service delivery and quality issues from a user perspective, and for NHS staff;


4)the principle of earned autonomy. Under this, those NHS trusts which score highest under the NHS star rating system receive additional freedoms and resources, whilst those which score lowest may have their management franchised, including to the private sector;

5)the introduction of foundation hospital status, under which selected three star hospitals will be freed from Whitehall control and given the ability to vary the pay and conditions package and to borrow from the private sector;

6)the proposed introduction of the Community Care (Delayed Discharges) Bill, which will doubly penalise local authorities by imposing fines on social service departments for bed-blocking when they are already financially stretched in providing local care services.

Conference considers that the use of the private sector to finance and deliver NHS services will undermine the ability of the NHS to deliver a quality healthcare service to patients and will lead to a less efficient use of NHS resources. Competition damaging to the NHS will be reintroduced repeating the mistakes of the previously discredited internal market. Payment by results will endanger quality. Withdrawal of funds on a quarterly basis, where providers fail to meet targets, will cause serious financial instability. The fragmentation of NHS provision will make integrated planning more difficult, and may increase costs as the NHS loses its position as monopoly purchaser of healthcare goods. As the NHS’s dependence on the private sector increases, the prices being charged by the private sector will rise. Scarce skills and expertise will be lost if staff are poached by competing providers, preventing the NHS from meeting workforce planning targets.

Conference is gravely concerned that the Government’s policy of penalising the lowest ranking NHS trusts and rewarding the highest ranking ones will widen the gap in performance across the NHS; will result in increased inequalities in patient care and will contribute to the dismantling of a universal health service which is the very founding principle upon which the NHS was formed. Conference believes that all NHS trusts should have access to additional resources, not just the highest scoring ones.

Giving hospitals foundation status creates a two-tier health service and recognises that this is a re-introduction of the internal market. Trusts will be set one against the other because the so-called freedoms given to foundation hospitals will be at the expense of the resources available to other parts of the NHS. This will result in a depletion of funding needed to develop comprehensive services across the primary, community health and hospital services thereby undermining confidence in the NHS, because patients who are not treated in a foundation hospital may believe that they are getting a second rate service.

There are also concerns surrounding the establishment of care trusts and in particular the plans to establish specialised services in the form of children’s trusts and care trusts for the elderly people’s services because of the lack of detail about the way they will be affected by the following: governance arrangements and accountability to both health and local government, VAT regulations, financial deficits in one or the other partner organisations and the significant structural change in the new organisations without the necessary resources and capacity to manage change as well as develop partnership working and deliver service improvements.

Conference notes the government announcement that private contractors engaged by local authorities will in future have to offer to new starters terms and conditions which are no less favourable than those offered to transferred staff. Conference can see no good reason why the same protection of no less favourable terms and conditions should not also now be provided for new starters taken on by private contractors in other essential public services, including our National Health Service. Conference therefore calls on the Government, if it is serious about creating a fairer pay system within the NHS, to start by extending the no less favourable practice to the NHS without any further delay.

Conference calls upon the National Executive Council to work with the Health Service Group through the Positively Public campaign to: