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NHS England must learn from the Carillion disaster

The NHA Party has previously warned of the risks that private providers will either fail or will back out of unprofitable contracts, as Circle Health did once the CQC found care was 'inadequate' at Hinchingbrooke Hospital after the firm took over. In particular, the NHAspace blog noted in 2015 that:

"...private firms are in many cases owned by hedge funds who make large profits using the money given to the firms by the NHS. This can only continue as long as the firms continue to win new contracts – as Private Eye puts it, 'private companies losing money from NHS work survive entirely on funding secured on the promise of… yet more NHS work'.

"...if the bubble grows for long enough, these private companies could become too big to fail, leaving the government to choose between a massive bailout and a healthcare collapse."

The collapse of Carillion must surely be sufficient to give pause to even the most avid privatisers. Aggressive accounting practices at Carillion and other firms lead to 'profits' being extracted before services have been fully delivered. Shareholders receive dividends and executives take their bonuses, but the taxpayer is left to pick up the pieces when the company fails.

NHA co-leader Dr Alex Ashman said, "The National Health Action Party has warned of the risks of outsourcing public services. Clearly the priority of firms such as Carillion is to extract a profit from contracts, even where there is no profit to be had. These firms clearly cannot prioritise public service ahead of financial gain, and should not continue to be given lucrative contracts in the NHS or other public services."

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Notes:
The National Health Action (NHA) Party was founded in 2012 to oppose the growing marketisation of the NHS.

Dr Ashman is a surgical registrar who joined the NHA in 2012 having seen first hand the effects of marketisation and privatisation on the NHS.

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