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Stormy waters ahead

There is more to the NHS funding crisis than they want you to believe, writes James Linney

October 9 was another bad day for the national health service. The cause this time was the first quarterly performance report by Monitor, the recently created financial regulator for the NHS.

A glance at the media coverage could easily have led you to conclude that the end is nigh for the health service. According to Monitor, the NHS is £930 million overspent - the deficit for the first three months of 2015-16 was already larger than that for the whole of 2014-15. The service is facing an estimated £2 billion total shortfall this financial year. A fact which leads Monitor to warn hospitals of “the need to continue to improve how they operate - including making radical changes to how care is delivered - if they are to counter the intense pressure they’re under from an increased demand for care and a worst-in-a-generation financial position”.1

It is worth pausing for a moment to remember that this ‘independent’ financial regulator has board members who have worked for Price Waterhouse, KPMG, NMC Healthcare, NM Rothschild and McKinsey and Co. So it is probably fair to conclude that, by “radical change to how care is delivered”, Monitor probably does not have in mind the nationalisation of all medication production, together with the radical democratisation of the NHS itself. What these representatives of capital actually mean is greater effort to achieve the £22 billion of ‘efficiency savings’ that the government is enforcing: in other words, more cuts and more outsourcing to the private sector.

And this latest financial tsunami hits the NHS as it enters its sixth year of being subjected to the Tory’s funding freeze, amounting to the worst period of cutbacks in the last 50 years. With this in mind - and the fact that demand on the NHS has never been greater - you do not need to be a member of the Adam Smith Institute (actually it probably helps if you’re not) to conclude that it is impossible for the NHS to fully operate within its current budget.

With all this ‘financial meltdown’ talk, you could be forgiven for overlooking the fact that the crisis has resulted from political, not economic, forces. Take the projected £2 billion deficit by the end of the year. If the political will was there, this could be overcome easily enough. To give one example, the bank bailouts resulting from the 2008 financial crisis amounted to £850 billion2 - when the ‘free market’ fails and finance capital needs a helping hand, it is amazing what can be found down the back of the treasury’s sofa. As every left group will point out, there are numerous options for raising a bit of cash: closing legal loopholes to prevent corporation tax avoidance (standing at about £3 billion last year3) or cancelling the outrageous private finance initiative contracts (the tab for which now stands at over £300 billion4 and is still growing). It goes without saying that things are not quite so simple,5 but, of course, none of that is going to happen anyway: the Tory government has its own agenda.


The NHS was created in the aftermath of World War II - the war effort led to a rising tide of expectation in Britain, as elsewhere, and people who had been sent overseas to fight and die for the glory of British imperialism were now ready to demand something in return. Then there was the reality of a political alternative to capitalism in the shape of an expanding Soviet Union - concessions had to be made to the working class, particularly in western Europe.

Through the years, the NHS has always had a certain amount of political and financial protection. Not even Margaret Thatcher was brave enough to challenge its position as Britain’s most cherished nationalised enterprise. But that is not to say it has not been the target of attempts at more subtle, ‘peripheral’ privatisation. Through the years, both Tory and Labour governments have encouraged hospitals and GP surgeries to act like businesses. Through the creation of an internal market, by allowing private health firms to cherry-pick highly lucrative services and by introducing the scandalous PFI schemes, NHS assets have been pilfered. Then came the 2008 crash and the ‘age of austerity’ - and along with it a good opportunity for a concerted attack on public healthcare.

For some time the media has been an accomplice in creating an atmosphere of permanent crisis in the NHS and the Tory government is keen to promote this idea as part of its response to ‘tackling the deficit’, which (so the story goes) resulted from the previous Labour government’s reckless overspending. The Tory’s goal is to create the myth in the public conscience of the NHS as a moribund, unaffordable relic that they have done their level best to save - but ultimately only some good, old-fashioned market competition can rescue it.

The NHS, like the Titanic before it, was once considered unsinkable, but it is taking in a good deal of water and, the more choppy the seas get for the NHS financially, the louder the arguments for privatisation will be heard. In other words, as many people have been saying since the unveiling of the Health and Social Care Bill in 2011, the NHS is being set up to fail. In the meantime, the Tories must appear to be doing something to try to help manage its financial crisis.

Health secretary Jeremy Hunt did not bother attending the special parliamentary question time on the NHS crisis the day after Monitor’s report was published. But he did send his junior minister, Ben Gummer, who had a suggestion to avoid the pending financial doom: the NHS should spend less on agency staff and consultants. Well, yes, but whose fault is it that hospitals have had to rely on private agencies rather than recruiting the nurses they need? And could the mushrooming of consultancies be connected to the ‘internal market’, by any chance? This is hardly a serious attempt to help the 78% of foundation trust hospitals which - Monitor tells us - are facing a deficit which could lead to some being forced to close.

But before we get too despondent, since the victory of Jeremy Corbyn there has been a change in the political atmosphere. For the first time for decades the working class can look to the Labour Party as a serious site of struggle, including against austerity. As a result there are definite signs of a growing confidence - and hope that the NHS can find some shelter from the storm. This change can be seen in the current dispute between the government and junior doctors over their new proposed contract. The campaign opposing it has been well organised and largely successful in linking this fight to a broader struggle against the Tory attack on the NHS as a whole. The new contract threatens to increase the number of hours training doctors have to work, whilst reducing their pay - in some cases by as much as 30%. Gone are the days, as Bevan once said, of the state “stuffing doctor’s mouths with gold”. Nowadays we doctors can count ourselves well and truly amongst the skilled working class.

Communists need not only to engage in and support these types of struggles, along with campaigns to defend the NHS, but in the process encourage them to link their fight to the political battle which is now seen first and foremost in the Labour Party. We must stand four-square for a regime of full and comprehensive democracy within Labour, and encourage the affiliation of all working class organisations. In other words, support for the Corbyn-McDonnell call to reverse the Tory NHS ‘reforms’ and increase NHS funding is not enough: we also have to continue to raise our own political agenda.

Real radical change is needed in how healthcare is provided. The availability and quality of treatment should not be dictated by arbitrarily set government budgets, nor should it be the source of private profit. Instead we need a radically democratic health service run by its staff and the community. We need to exclude all private healthcare companies and call for the immediate nationalisation of the pharmaceutical industry.

Ultimately the only way the NHS can find calm waters once and for all is with the working class at the helm.


1. www.gov.uk/government/news/radical-change-needed-from-foundation-trusts-to-tackle-intense-pressures.

2. www.independent.co.uk/news/uk/politics/163850bn-official-cost-of-the-bank-bailout-1833830.html.

3. www.theweek.co.uk/62461/which-costs-more-benefit-fraud-or-tax-avoidance.

4. Y El-Gingihy How to dismantle the NHS in 10 easy steps London 2015, p10.

5. See, for example Michael Roberts’ article (pp8-9) - ed.