Why £8bn is a zombie figure that won't save the NHS

As the former boss of the NHS slams politicians for not addressing the financial 'black hole', will the pledged £8bn merely be used to pump prime further privatisation and cuts? The introduction to a series examining the parties' NHS manifesto pledges.

caroline m.jpg
Caroline Molloy
16 April 2015

The NHS electioneering has so far been dominated by arguments about whether the Tories 'unfunded' £8bn pledge is better than Labour's 'funded' £2.5bn pledge.

But this morning David Nicholson – the old boss of the NHS – weighed into the argument with a bombshell.

He told the BBC that in any case £8bn won’t be nearly enough to save the NHS from entering a period of “managed decline” with ever-lengthening waiting lists.

The Health Foundation said much the same earlier this month. And the British Medical Association has just warned that unless the funding gap is filled, a "pay NHS" could be on the way.

Nicholson has now joined the fray, criticising politicians for making election pledges of a 24/7 NHS (Tories) and more staff (Labour) and “talking about extra services” but refusing to talk about the “financial hole”.

Nicholson calls for politicians to be more honest with the public about what “big decisions” might be in the pipeline (of which more in a moment). But he himself is only pointing out the basic arithmetic. Most experts – including the NHS’s new boss, Simon Stevens – have said the projected NHS funding shortfall is more like £30bn a year by 2020. So even £8bn of new money leaves £22bn a year still to be found from... somewhere.

There is considerable evidence to suggest that scrapping the expensive, bureaucratic 'market' based system (where the NHS and private firms bid against each other for contracts) could save a large chunk - maybe even all - of this cash.

But that's not on Simon Stevens' agenda. 

Stevens pledged last year that he could instead make £22bn of “efficiency savings” – a commitment hailed by politicians from all sides.

It’s time to examine the Stevens’ £22bn savings pledge in a bit more detail. What kind of ‘tough decisions’ might the unelected heads of the NHS have up their sleeves ready for politicians to rubber stamp?

Cameron-appointee Stevens - who used to work for United Health and for Tony Blair - has laid his ideas out in his ‘Five Year Plan’, though you need to dig deep behind the jargon, and listen closely to his other pronouncements, to identify what's really being put forward.

For starters, the Five Year Plan talks about "unlocking assets". Stevens suggested to the Independent last month that possibly as much as £7.5bn will be “saved” by selling off many more hospitals and clinics to property developers, adding "this is obviously just the beginning”.

Quite how such a mass sell-off will solve waiting list crises, when we have already lost half our hospital beds in the last 30 years, is unclear. We now have amongst the lowest level of beds in Europe.

But there are worrying signs that many more closures and sell-offs are planned for after the election, with a law passed in the dying days of this parliament that will help sell-offs of NHS buildings including those currently in use.

Stevens says this will lead to “fundamental changes” in how the NHS is delivered, though is always keen to tell us that these will be ‘local decisions’ – that favourite politician’s trick.

Already, ‘local plans’ almost inevitably turn out to be written by the same narrow cohort of management consultants who have close working relationships with private healthcare, insurance, pharma and technology companies.

You’ve probably got at least one such plan in your area, though if it is explicit about bed, hospital and ward closures, you may, like the citizens of Staffordshire, struggle to see it before the election.

The public facing plans typically use Stevens’ language of “right care, right place, right time”, heavy on appealing talk of “care closer to home” and in particular more “self-care”, "integration", and “demand management”.

The respected Health Services Journal calls such talk “Messiah concepts” and “magical thinking”. The  Nuffield Trust says that to suggest we’ll get “better services outside hospital that can either prevent the need for hospital admission or offer the same care but in different settings…is a common theme in initiatives…But there is little evidence that this can be achieved”.

Local scrutiny of these re-organisation and closure plans has been blunted in many cases as councillors are tempted by the prospect of nabbing a bit of NHS cash to fill the gaping hole in their social care budgets, under the familiar rhetoric of ‘integration’. To see this prospect writ large, see Manchester’s ‘DevoManc’ plans, breezily waved through by George Osborne just before the start of election purdah, even as Manchester’s smaller hospitals face an uncertain future.

And there’s more up Stevens’ sleeve. He used his first speech as NHS boss to announce a huge roll-out of personal healthcare budgets, to cover the 5 million most sick people in the NHS over the next 3 years. The roll-out of the scheme is already underway, with people receiving a capped ‘entitlement’ for planned (though not emergency) healthcare. If your needs change and you need a bit more healthcare, NHS England have admitted patients will have to individually ‘negotiate’ that with bureaucrats. This is hardly a reassuring prospect – social care users with personal budgets have already found they face delays of up to 6 months for such renegotiations, which are not always successful.

The plan sounds suspiciously like the old Thatcherite ‘vouchers’ plan. Effectively state subsidised insurance, topped up from your own pocket if you want more than the bare minimum of healthcare – just as we already have in social care. 

Vouchers were favoured (but never delivered) by the Thatcherites as a key way of funnelling state subsidy (and increasingly, personal contribution) to private health firms.

We should never forget that Stevens – in his pre-United Health role as health advisor to Tony Blair and Alan Milburn – was described by the Financial Times as the “key architect…of the reforms that for the first time broke up the NHS monolith, introducing privately run treatment centres”.

And he’s still at it. His Five Year Plan said we need more “new provider networks” from the private sector, though – as usual - this was disguised in lots of talk of partnership and ‘GP leadership’.

It’s another politician’s trick from the unelected head of the NHS. The Health & Social Care Act was sold to us as ‘GP leadership’ too. But the reality has been a few entrepreneurial GPs providing political cover to service cuts, whilst the majority of GPs are left struggling to get on with the job – or leaving. Many areas now have fewer than half the GPs they need, says the Royal College of GPs.

Stevens’ 5 year plan is vague on any commitment to patients being able to access sufficient skilled healthcare professionals in a timely fashion – surely the bedrock of what a health service should be about. Instead it is full of hints that in future an increasing number of services will be delivered, not by face to face contact with doctors and nurses, but by telephone and internet contact, mobile phone apps and “remote monitoring” gadgets. “Innovators from the UK and internationally will be able to bid to have their proposed discovery or innovation deployed and tested”, we are told. There will also be “an expanding set of NHS accredited health apps that patients will be able to use to organise and manage their own health and care and the development of partnerships with the voluntary sector and industry”.

Such 'apps' are dismissed in an article in this week's British Medical Journal as "likely useless" and possibly worsening the anxiety of the "worried well". But there’ll be no shortage of bidders – PWC says the ‘mhealth’ (mobile health) market will be worth $23bn by 2017, and whilst the UK is at the vanguard, the opportunities for roll out to expanding economies like India are huge. Ali Parsa - the man who duped the political class into believing his private company could do a good job of running Hinchingbrooke hospital - is now selling us just such an 'app' to replace doctors. Called 'Babylon', it is accredited by the NHS - and available for a monthly fee. 

Noting that it takes a long time to train medical staff, Stevens also suggests greater reliance on privatised care home staff to provide ‘shared models’ of medical care, and lauds the increasing reliance on volunteers and non-medically qualified staff nudging us towards more ‘self-care’ (whilst not, of course, addressing the structural issues of poverty that make poor lifestyle choices the easiest choice for many).

Stevens also suggested in 2010 that a good model for primary care might be ‘Michael Gove-style free schools’ (ie cheaper, unqualified teachers) – and refused to rule this out when challenged in 2014.

Staff make up over 70% of NHS costs – so fewer, cheaper, less skilled staff is the main way that the increasingly involved private sector cuts corners to make their profits.  

As both insurance companies and providers in America know, the really fat profits aren’t in providing health care, as much as in purchasing it – and somehow weeding out those people, and treatments, it isn’t profitable to provide for. The kind of thing that Kaiser Permanente does in the US – a model cited approvingly in Stevens report.

Alarmingly, a subsidiary of Stevens' old employer United Health - Optum Health - has just won (alongside Capita) the contract to control £5bn of NHS ‘purchasing decisions’. Already we see attempts to weed out undesirable patients – whilst the ‘local decision’ in Devon to refuse all routine surgery to smokers and obese people was overturned after an outcry, there are currently no legal obstacles to cash strapped local health bosses taking the same decision elsewhere in future.

Stevens 5 Year Plan even hints at the plans announced this week by the Tories - to cut the benefits of those who don’t consent to unspecified ‘treatment’ by saying “we will seek to test a win-win opportunity of improving access to NHS services for at-risk individuals while saving ‘downstream’ costs at the Department for Work and Pensions, if money can be reinvested across programmes”.

So that’s what the new boss – and the old boss – have up their sleeve.

And where are the parties on these plans? Over the next week OurNHS will examine the extent to which the major parties have signed up to Stevens’ carefully crafted consensus in favour of service cuts, hospital closures, self-care and conditionality – and whether any of them have committed to taking the truly bold decision, to get the hugely expensive market out of the NHS altogether, to plug the funding gap that we know still looms.


OurNHS has exposed sneaky moves towards charging for vital health services, withdrawing services, hospital sell-offs and the shocking failures of privatisation. We need your help. Our funders can no longer support us - so we’re asking readers to step in and save OurNHS.

Become an OurNHS supporter today and we’ll continue our fight to save the NHS →

Had enough of ‘alternative facts’? openDemocracy is different Join the conversation: get our weekly email


We encourage anyone to comment, please consult the oD commenting guidelines if you have any questions.
Audio available Bookmark Check Language Close Comments Download Facebook Link Email Newsletter Newsletter Play Print Share Twitter Youtube Search Instagram WhatsApp yourData