The NHS as an unassailable Public-Private Wealth Transfer Mechanism

An unusually political blog article from me this time. It’s still healthcare-relevant, but it’s concerned with some of the bigger-picture stuff that I’ve been observing. It also cuts across some of my other views — particularly those around open source in healthcare — because open source, sharing, and collaboration are pretty much antithetical to the current governmental zeitgeist, making it hard to move forward with those ideas while this thinking prevails.

Our governments are not on our side. They haven’t been for some time. They are complicit with big business and wealthy elites to funnel money from the public sector into private hands, and a short history of the last few years shows how this has become the main function of the government.

‘Wealth Transfer Mechanism’

I’m sure I haven’t invented the term, neither am I the first to give a name to this concept, but I just like that term as it’s simple and accessible. It describes a way of sending public taxpayer money (often in fact taxpayer’s crippling debt) to private companies, for private profit and private wealth.

Why are these a thing?

Governments cannot run out of money. On the behalf of the people they purport to represent, they can borrow quite staggering sums of money. They can raise cash via taxation too, and if the privately wealthy beneficiaries of WTMs paid tax in the UK then this would almost redress the balance. ….But they generally aren’t paying UK Corporation Tax or UK Income Tax.

Governments buy quite enormous things. This is why they are such attractive customers to have for big business. The right amount of lobbying in the right ears can deliver a huge contract announcement, for the kinds of things that only governments buy — vast rail infrastructure, monstrous stunts of civil engineering like bridges and tunnels, secretive (and therefore not externally transparent or auditable) defence contracts, nuclear power stations, and more. Even if the country’s children are starving, corrupt leaders will still be commissioning white elephant projects.

Contractors can easily become part of government. There’s a special kind of lobbying where the hopeful contractor lands its own senior employee a flagship job in the government department or arms-length-body best placed to create their dream future contract. It’s known as the public-private revolving door. Over the next few years their ‘government plant’ can quietly develop opportunities and siphon intelligence out to their former employer. When the Big Contract is announced, the contractor is all ready with the perfect bid. NHS England’s Global Digital Exemplar programme was a perfect example of this.

The initial tender and the final cost need not be mathematically related in any way. Initially, contractors can bid low enough to win the contract (while high enough to be plausible). Later, increases in the contract value are reported but never result in the cancellation of the contract. Governments always pay up. HS2 is the par-excellence example of this.

Delivery is completely optional. Whereas failure to deliver the goods for a private-private contract would result in legal redress and compensation, failure to deliver on a public project is inversely proportional to the size of the contract. There is always a way to divert blame for failure to deliver away from the contractor and onto any other delivery stakeholder. Government is complicit in hiding the extent of incompetence because it’s in neither the contractor’s or the commissioner’s interest to disclose that a contract was awarded to a company fundamentally incapable of delivering it. And the government never sues for failure. Or if it does, it loses.

Reputations are at stake, so U-turns cannot happen, and failure is hidden. At this level of the political game, projects are often deeply linked to individual politicians or other leaders. This fact explains all of the above — the ready availability of new funds, the failure to investigate and prosecute for failure to deliver, the complicit hiding of inconvenient failure.

How this is happening now

It’s increasingly apparent through some of the COVID-19 procurements and finance announcements that they are not even afraid of being found out any more. Estimates of the worldwide market for personal protective equipment (PPE) last year put it at about £40 billion. Yet, in the latest Chancellor’s Summer Statement, the UK has announced it will spend £15 billion (37% of the worldwide market) on PPE, which represents about £14,000 for each and every NHS staff member — it just seems implausible. (Note that only a minority of NHS staff need to wear full PPE, and not necessarily for all their work)

£10 billion is earmarked for the NHS Test and Trace scheme. It seems extraordinary that any efficient system to contact people who may have been exposed to COVID-19 could cost £150 per head of UK population over the limited time during which contact tracing will be necessary. For context, we spend about £2900 per head of population for people’s entire healthcare — general practice, hospital care, cancer treatments, surgery. How can contact tracing cost 5% of someone’s entire healthcare? Answer: it doesn’t — not if you commission it from public organisations like PHE or from small ‘self-employed’ private NHS providers like GPs. It only costs this comedy money if you are strip-mining the NHS for cash to send to huge private organisations like Serco.

Why the NHS is the perfect WTM vehicle

The NHS makes a particularly good Wealth Transfer Mechanism vehicle because it’s so very close to people’s hearts in the UK. Whereas government spending in most other areas is always subject to criticism, spending on the NHS has an almost inverted effect — the larger the number that you are spending, the better you look as a government.

All NHS spending is ‘good spending’ from a tabloid newspaper editor’s point of view.

Other areas of government spending — defence, infrastructure, welfare, even Education — can and will be criticised, and the larger the number being spent the more it looks like the government’s spending is out of control.

But spending on the NHS, especially in a pandemic crisis, is subject to very much lower levels of criticism.

Public spending on coronavirus soars to £190bn
*Public spending on the battle against coronavirus has risen to nearly £190bn, according to figures released by the…*

I’m not saying that this same pouring of cash into private sector hands doesn’t happen elsewhere in government. We have great examples in HS2 (£106bn), and no-deal Brexit planning The NHS as an unassailable Public-Private Wealth Transfer Mechanism