Clegg’s letter to Burnham: “you may have inadvertently misled” Commons on Labour’s NHS privatisation record

clegg on leveson 2Nick Clegg fielded Prime Minister’s Questions today, during which he noted that Labour’s shadow health secretary Andy Burnham is “the only man in England who has ever privatised an NHS hospital”. Mr Burham complained that Nick had misled the House of Commons over the issue of Hichingbrooke Hospital, accusing him of “sheer inaccuracy”. The Lib Dem leader lost no time in responding:

Dear Andy,

I see that you raised a Point of Order in the House of Commons and that you accused me of “sheer inaccuracy”. I am always happy to confirm the accuracy of what I have said.

You said that “when the previous Government left office there was still an NHS bidder in the competition.” That is simply not true.

These are the facts.

On 26 March 2010, that is before the General Election and while you were still Health Secretary, the three organisations shortlisted for the contract to run Hinchingbrooke Hospital were Circle Health, Ramsay Health Care UK and Serco Health – all of which are non-NHS organisations.

The NAO report of the bidding process published on 8 November 2012 clearly states that in December 2009 there were only 3 bidders left in the process – Circle Health, Ramsay Health Care UK and Serco Health. It says on page 20 that the “the two NHS trusts involved both withdrew at early stages of the process.”

When making your Point of Order, you may have been referring to the fact that the Serco bid included working with the Peterborough and Stamford NHS Foundation Trust. Given it is clear that the actual bidder was Serco, I suggest that you are stretching the boundaries of accuracy to their very limit.

As you can see, I very much stand by what I said at Prime Minister’s Questions in the House of Commons today. You asked if I had inadvertently misled the House of Commons. I would suggest that by misquoting what I said, it may be you who has inadvertently misled the House of Commons. Given that the facts are as I have outlined above, I wonder if you would be prepared to set the record straight yourself?

Nick Clegg

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32 Comments

  • Will Millinship 10th Dec '14 - 6:50pm

    Burned.

  • Tony Dawson 10th Dec '14 - 7:05pm

    Mr Burnham’s ‘misleading’ appears to be pretty ‘advertent’ to me.

    Nick Clegg is being far to ‘liberal’ with him.

    Labour, under Mr Burnham, insisted that NHS Hospitals should all privatise a percentage of services. And pay for it, even if not a single patient used the privatised service.

    Andy Burnham’s only saving grace, besides those eyelids he is forever fluttering, is that he is not(quite) Alan Milburn or Stephen Byers.

  • I think that Nick Clegg ought to be very careful about this, according to Hansard he said:

    “In fact, the shadow Health Secretary, sitting there demurely, is the only man in England who has ever privatised an NHS hospital, and they dare to lecture us. [Interruption.] Hinchingbrooke hospital—the only NHS hospital to be privatised, and by the Labour party.”

    I would suggest that to any reasonable reading that suggests that when the privatisation of Hinchingbrooke Hospital came up to the Secretary of State’s desk it was approved by Andy Burnham and the Labour government. It wasn’t and Nick Clegg knows that it wasn’t. It was approved in 2011 and took effect in 2012 which means that the Coalition have to take the credit.

    Andy Burnham has pointed out that Peterborough and Stamford Hospitals NHS Foundation Trust were still in the process and indeed there was no guarantee in 2010 that the Trust would be handed over to any of the three bidders. In fact Andrew Lansley did halt the entire process very soon after the general election, only to restart it and then decide that Circle Health should be the winners.

    There was a misleading of the Commons today, but it wasn’t from the opposition benches.

  • Richard Dean 10th Dec '14 - 7:27pm

    It seems simpler than that is some ways. Andy Burnham decided to initiate a process that, from the outset, allowed for the possibility that a private company would end up running an NHS hospital.

    But there’s another question, which is: Is that equivalent to privatisation? It seems that GP surgeries have been run as private enterprises ever since the NHS began, so why not hospitals?

    The important points are that decisions about medical care need to be made on medical grounds, not on grounds of profit maximization, and that medical care should be free at the point of use. If that can be assured, does it matter that a private company is running a unit?

  • Stephen Donnelly 10th Dec '14 - 7:49pm

    Storm in a teacup.

    Labour are barking up the wrong tree by focusing on ‘privatasation’ of the NHS. The focus should be on how services are commissioned not who wins the contract.

  • Stevan Rose 10th Dec '14 - 8:27pm

    “does it matter that a private company is running a unit?”

    Yes it matters. Money that should be spent on patient care is instead paid in dividends to shareholders and the model requires wasteful and unnecessary contract management. Buying spare capacity in private hospitals should usually be good value and a win – win but having a private company run an public hospital is never going to benefit patients as the economics will never work. The GP funding model isn”t comparable to a full tender hospital contract.

  • @Frank Little:

    “I am quite prepared to believe that they did slightly better than Thatcher/Major.”

    Why?

    They did worse than Thatcher/Major on the rich-poor gap over 13 whole years.

    Labour these days are basically a Party without ideology or competence. They are just another tribe or club of middle class elitists who want to run things.

  • Richard Dean 10th Dec '14 - 10:04pm

    @Stevan Rose
    Contract management is always going to be needed, even for a hospital run wholly within the NHS. Indeed, poor or absent contract management has been the root case of many problems within the NHS.

  • Richard Dean 10th Dec '14 - 10:24pm

    @Stevan Rose
    Isn’t your statement about dividends also questionable? Suppose that, by efficient management, a private company can provide the same care as an NHS unit would, but at £2 per patient less than the NHS unit. If the private company then takes that saving and uses £1 per patient to improve patient care beyond what the NHS unit would have been able to do, isn’t that a good thing? Even if the other £1 per patient was paid in dividends?

  • Not all private health providers have shareholders and pay dividends. Indeed not all are profit making.

  • Stephen Donnelly 10th Dec '14 - 10:53pm

    @Stevan Rose. Private companies work very efficiently because they are focused on delivering a profit. They raise their own capital and fund it by paying a dividend. This will usually mean that private providers can offer a more efficient service than their public sector equivalent, BUT because they are so focused on delivering a profit, quality may suffer. In a market place that does not matter, if customers are not happy they will go elsewhere. The NHS is not a market, and customers cannot easily go elsewhere. IF quality can be maintained it makes economic sense to commission services from private suppliers. The difficult part is designing the commissioning process so that quality can be maintained. The IFs and BUTs are big, but liberals should consider each case according to merit, and leave the prejudice against the private sector to the Labour Party.

  • @Richard Dean

    Suppose the public sector uses the same efficiency techniques as the private company and saves £2 per patient, all of which is reinvested into patient care. Twice as good. There is a fundamentally wrong assumption that private companies are more capable of efficient operations than the public sector. Having worked in both in my experience the worst inefficiencies have been in the private sector. Contract management as applied to outsourced services is not required where services are not outsourced.

  • Nick Clegg fielded Prime Minister’s Questions today, during which he noted that Labour’s shadow health secretary Andy Burnham is “the only man in England who has ever privatised an NHS hospital”.

    Clegg’s letter is simply trying to divert attention from the fact that his initial accusation is nonsense.

    The hospital was not “privatised”. It is still owned by the NHS; a 10-year operating franchise has been awarded, after which management will return to the NHS.

    And whatever you want to call this arrangement, the fact is that the contract was signed by a member of the current government, not Andy Burnham, in 2011.

  • @Stephen Donnelly. It is a myth that private companies work more efficiently than the public sector. In the public sector those delivering services are experienced in extracting every single penny from meagre resources. Whereas companies involved in large scale outsourcing, once they have won the tender, do not have to compete on an ongoing basis. So they are not like Tesco for example. They are inclined however to implement layer upon layer of bureaucracy as measurement against contract schedules is far more important than service delivery.

  • Richard Dean 10th Dec '14 - 11:29pm

    @Stevan Rose

    I agree that the key requirement is to ensure the proper standard of care. However, an NHS-run hospital does in effect have a contract with the government, and that contract requires management. Moreover, that contract is the same as the contract that a private healthcare provider would be required to sign up to, so the amount of contract management is the same.

    But the public sector doesn’t always choose to use the same efficiency techniques as the private sector. So the orvate sector provider can give better value for money.

    The bidding process identifies which groups – out of NHS and non-NHS bidders – expects to be able to provide the required level of care at what price. If the private bidder is able to provide the same quality of care as the NHS provider, but at a lower price, then the government is able to use that saving in other beneficial ways, including by asking the provider to provide extra services. The result would be that the private provider would be providing better services that the NHS provider could have achieved, and the better services would be achieved at the same price.

    And if the private sector provider can do all that, and still pay dividends, in what sense are those dividends unfairly earned?

  • I think Nick focus on the NHS was a good idea for me it points the public at thinking how good is Labour on the NHS all parties have politicised the NHS Conservative may have wrote up PFI but it was labour who made it profitable for the public sector and for me the buildings should be built and owned by the state. Labour are sanctimonious with the NHS record inyet for me I don’t trust them

    While on Nick personaly I thought his answers with Theresa May did in fact concentrate on what good things have helped Woman no party or Parliment can do every thing in one five year term So for me Win for Nick well done wish he had, had such form with Nigel Farage debate

  • Stuart re:

    The hospital was not “privatised”

    In Andy Burnham’s world, the one in which the coalition has been “selling off” the NHS, it most definitely is privatised. Your argument would have had zero traction with Burnham and his ilk, if this franchise had happened under the present government.

    Perhaps you have a point, but you need to get onto Labour sites to try to put it across.

  • I do not care which of these two MPs has misled the other in this ritualised slanging match that is mistakenly called “Prime Minister’s Question Time”.

    My guess is that if I ask the others in the queue at out-patients on my next trip to The Marsden, they will not care either.

    If I ask them – who do they trust on the NHS and privatisation Clegg or Burnham ?
    I would expect the answer “neither”.

    Or possibly — “I cannot trust Clegg on anything , who is Burnham?”

  • David wilkinson 11th Dec '14 - 12:18pm

    John Tilley says “who is Burnham”, he is one of those smooth Labour operators.

    But for Cleggie to lecture anyone on being honest it’s the funniest thing I read all day, he must have forgotten that promise he made on Tuition Fees.

  • This is just plain daft, the minister who approves the bid is always the one responsible for the decision. Clegg will end up half heartedly apologising and now because he’s made such a big deal over it, will look petty and stupid. Next time you elect a leader you really do need to pick an adult.

  • @David Wilkinson

    And Labour must have forgotten the two times they break theirs on the same issue, whilst having huge majorites in the commons.

  • Let’s face it – neither Clegg nor Burnham has clean hands when it comes to privatisation of the NHS.

    We expect the Conservatives and UKIP to be gung job for privatisation and breaking up the NHS.
    We do not expect it from Labour or Liberal Democrat MPs.

    Unfortunately Clegg let the cat out of the bag many years ago. In January 2008 shortly after becoming leader and long before the start of the coalition he said that on hospitals — “the state must back off”.
    People may now have forgotten these Clegg policy ideas about breaking up the NHS and “involving” the private sector?

    They may even have forgotten that it was Clegg who not only signed off the top down reorganisation of the NHS (specifically ruled out in The Coalition Agreement) but he wrote a memo actually welcmomng the idea.
    He did not bother to ask the Liberal Democrat minister in the Department of Health at the time but who cares?

    In the same way some people may have forgotten what Burnham and other Labour ministers may have done when in power in the past.

    Perhaps both Clegg and Burnham could concentrate on the future of the NHS and write a joint letter saying that neither of them will in future devote their time to privatising the NHS.

    That might be something that voters are interested in rather than these letters which read like hand-bags at dawn in the Westminster Bubble.

  • Jonathan Pile 11th Dec '14 - 4:13pm

    Well done Cleggie – nailed another labour lie. How typical of labour to think that they can start something and let the next government take the blame. That’s labours standard m.o
    Just like the economy and everything. One of the many labour lies to nail. Now Miliband is signed up to cuts too.

  • Paul Reynolds 11th Dec '14 - 4:33pm

    Illuminating debate. Stephen Donnelly seems to bre arguing that NHS service is of good quality.. may I respectfully suggest he tries the French German Dutch Austrian Japanese and Singaporean derives,, all free at the point of treatment for local residents … and then come back and use the NHS. Viva la difference. Also interesting is Steven Ross’ argument that all non-state organisations are exploitative and should be owned by the state especially ‘monpolies’… and presumably competition should not be encouraged since it induces bad behavior. ie everything should be run ‘democratically’ and owned by the state. Hang on…hasn’t that been tried before …?

  • Martin Land 11th Dec '14 - 4:53pm

    Ideologically and pragmatically I have no problem with private hospitals as suppliers to the NHS. I’ve lived in France and such a system operates without problems. However, I live in the the catchment area for Hichingbrooke Hospital and I have heart disease. It doesn’t work as well. But it works equally badly as it did under the NHS.
    Most amusing episode? Upon complaining about the food I was told that the chef had previously worked in a Michelin starred restaurant. Presumably as a cleaner.

  • @Richard Dean. I don’t know if you’ve ever been involved in outsourced services but I have from in house bid angle, outsourced supplier management perspective , and from inside three different outsourcing suppliers. I’ve written requirements, I’ve written bids, I’ve evaluated bids. Here is how it works. A set of requirements is drawn up but usually cannot include every minute detail especially in highly complex situations. You can build in a catch-all, in which case suppliers have to build in costly contingency for the unknown. But usually the contract is let on the basis of a fixed list of requirements. To fit within available budget those requirements are pared down to the must haves and a chance is taken on the rest. After the contract commences it is realised that changes are needed, additional services are required, things were missed, regulations change, issues arise in terms of public opinion. Where you use an outsourced supplier any change no matter how small, no matter how critical, is subject to lengthy and expensive contract change notices. The supplier is now in the driving seat – there is no longer any competition so no need to bid low, no need to rush anything. Many contracts are initially bid as loss leaders but where the profit is contained in the prospects for uncapped contract changes. Basically a legal bait and switch. Sometimes the price of the contract change is not cost plus margin but how much you judge the client will pay – guess the budget. What may appear good value at the outset constrains flexibility and because of the need for contract changes will rarely be good value as the contract progresses. In contrast internal delivery teams seamlessly fill gaps in requirements and can switch priorities and resources instantly according to demands.

    Nice to see my views being misrepresented though. It does make sense to buy in spare capacity from the private sector. And there are services of a transient project nature where private services are often better value. And services such as dental and optical care where NHS and private services exist side by side and there is genuine competition and choice. Even with GPs you can choose your surgery and those that don’t perform lose out. I can get a GP appointment most days with a couple of hours notice not because the surgery is efficient and well run but because patients are leaving in droves. But I do strongly challenge the notion that some people have that private is always more efficient than public because it’s patently untrue and in delivery of complex large scale public services it invariably carries massive overheads and inflexibility. And the reason is post-contract award there is no competition; it is a private monopoly and it is an absolute obligation on a private company to maximise profit, exploit if you like as long as you don’t breach.

    Competition is good. It would be brilliant if Virgin had competition on the West Coast Main Line and perhaps an unregulated Anytime Return, Standard Class, Manchester to London would not cost £321. It can do that because it is a private monopoly with government protection. Private monopoly is invariably bad. State monopolies at least return profits to the taxpayer.

  • Stephen Donnelly 12th Dec '14 - 9:25pm

    @Paul Reynolds. I have first hand experience of only the Singaporean, Austrian and Dutch health services from your list but accept your point. The NHS is a curates egg and needs reform. My argument is that how we commission is more important that who we commission from. The private, public and voluntary sectors have their own characteristics, we need to be aware of them and choose the best option available in each case. Labour tend to favour the public sector because it best protects the interest of the union members who fund it, the Tories put the interest of finance first, to coin a phrase, we are free to choose.

  • Dr Michael Taylor 12th Dec '14 - 10:40pm

    I don’t a toss who provides NHS services as long as they are the best services for the patients and provided at a reasonable cost to the taxpayer. The NHS itself should continue to be state owned, but it should surely be free to get its services provided by the best people, public or private.
    Oh and by the way, Labour did more than any government to privatise the NHS because Gordon Brown didn’t believe in the ability of the public sector to provide services efficiently. (See NHS plc by Professor Allyson Pollock) If you really want to find out just how much Labour messed up the NHS read NHS Betrayed by Michael Mandelstam.

  • Neil Sandison 13th Dec '14 - 10:12am

    We must be careful of not falling into the trap Labour is trying to set .Milliband stated he wanted to weaponise the NHS ie turning the NHS into a weapon to attack his oponents .We need to focus on the key issues .Better services for the frail and elderly .Getting the district nursing system back up to strength .tackling alcohol abuse which fills our EA services with self inflicted injuries and illnesses .revisiting NHS direct and the 111 service regardng medical advice .Out of hours GP access and utilising our district hospitals as recovery centres unblocking beds in emergency acute units.
    The voters want answers not an NHS that is mearly a political football

  • Nick could you please correct the following inaccuracies please:
    We will abolish tuition fees
    We will not raise VAT
    We will stop the top down reorganisation of the NHS
    We will introduce a bill of rights
    We will tax fairly
    And others
    This is why I voted libdem in 2010 not for:

    Instead we got the All the nasty policies of the TORY party

  • David Evershed 14th Dec '14 - 6:02pm

    All political parties are happy that most General Practitioners are private businesses.

    All political parties are happy that all drugs are provided to the NHS by private businesses.

    All political parties are happy that all hospitals are built and furnished by private businesses.

    What’s wrong with private businesses carrying out some NHS operations and treatment?

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