28.03.2025

Charles Landseer ‘Anatomical study’ (c1818)

Demise of NHS England

The decision to scrap NHS England might look like a bureaucratic reorganisation, writes Ian Spencer, but public provision is about to be butchered by yet more privatisation

Wes Streeting has decided to scrap NHS England. This has come as a shock to staff, as it will mean the loss of around 9,000 jobs in the NHS and the Department of Health and Social Care. Apparently, this is to avoid ‘duplication’ with officials at the department. This has been portrayed as the “removal of a layer of bureaucracy” and a “shift back to democratic control.” I doubt that, somehow.

The Labour government is starting to look like a mirror image of the Trump administration in the US. Labour has dramatically cut the overseas aid budget and is about to make swingeing cuts to welfare in favour of increased military expenditure. Trump has removed funding from the World Health Organisation and the US Agency for International Development. Now, in an apparent emulation of Elon Musk’s Department of Government Efficiency, Streeting is set to pursue a populist line with attacks on civil service jobs. I do not think this is accidental.

Labour thinks the UK needs a trade deal with the US, particularly now that we are separated from our biggest trading bloc, the European Union. What better sweetener could there be for taking Trump’s tariff knee off the neck of British steel and aluminium exports than opening access to the NHS for US medical and pharmaceutical companies? (It is not as if they are not already making inroads.)

US pharmaceutical giant Lilly, based in Indianapolis, is investing in the UK as part of a ‘collaborative partnership’ with the UK government, about which Wes Streeting said: “Partnerships like this are key to building a healthier society, healthier economy and making the NHS fit for the future.”¹

And if the biggest pharmaceutical company in the world is not enough, let us not forget how much private medicine has invested in Wes Streeting personally. Around 60% of the registered donations accepted by the health secretary come from people and companies linked to private health. These have included John Armitage, a hedge-fund manager, reported to have interests of more than $500 million in United Health, the largest healthcare insurer in the US.²

After all, Keir Starmer has already said that Labour will “keep all options on the table”, while not, of course, announcing any retaliation against US tariffs. This is unlike the EU, which has announced retaliatory tariffs on Bourbon whiskey, jeans and the motorcycle company, Harley Davidson, which is already in dire financial difficulties.³ Does this mean an escalating trade war, which will lead to recession? Probably: Trump himself has not ruled it out and the US stock market has suffered significant losses in response.

The value of the UK’s raw steel and aluminium exports to the US in 2024 was around £470 million. However, the tariffs also apply to finished metal products, from gym equipment to machinery. It is estimated by the Global Trade Alert think tank that the UK’s affected exports are worth around £2.2 billion.⁴ The 25% tariff may prove to be one of the last nails in the coffin of UK steel manufacturing, but then it is an industry that has been on life-support for some time and I suspect its demise will be a matter of indifference to Labour.

NHSE role

NHSE manages how health services in England are run (Scotland and Wales have their own arrangements). It employs civil servants rather than clinicians, and was established under the Tory-Liberal Democrat coalition of David Cameron, when Jeremy Hunt was health secretary. Its creation was portrayed at the time as a rationalisation of the NHS commissioning boards for England. It ‘commissions’ services, such as general practitioners, dentists and specialist services, and allocates close to £200 billion of NHS funding each year.

Put differently, NHSE owed its existence to the imposition of a pseudo-market in healthcare, where there is a separation between ‘purchasers’ and ‘providers’ of health services. This followed from the NHS and Community Care Act 1990, under prime minister Margaret Thatcher.

I say ‘pseudo-market’, because in a real market health services would be creating surplus value. A real market would also allow unprofitable hospitals to go to the wall. It was the drive towards a pseudo-market that allowed the creation of NHS trusts, which were introduced in 1992.

Trust status was intended to emulate a particular business model, with more freedom for management to make decisions, including staff reductions and higher pay for executives. The case of Mid-Staffordshire NHS Foundation Trust is instructive. Created in 1993, following a £19.9 million annual deficit, by 2012 it was put into administration and dissolved in favour of yet another reorganisation in February 2013 (the other consequence was substandard care, by the way). An estimated 400‑1,200 more patients died between 2005 and 2008 than would otherwise be expected.

While it might suit Labour to portray the abolition of NHS England as ‘cutting red tape’, this convinces nobody. Streeting’s aim is to bring the English NHS under more direct control of the department of health (and therefore Streeting himself). It is not as if we have not been here before. The Blair government came into office with the promise of removing the ‘internal market’ in the NHS, only to go on to strengthen it and expand measures such as the private finance initiative - which was introduced by the John Major government, and has proved to be a costly failure.

At the heart of the constant reorganisation of the health service is the contradiction at the heart of capitalism - between use-value and exchange-value. In the production of use-values, human need is met only incidentally because of the production of exchange-value and therefore profits. In creating the NHS, the provision of healthcare came at the expense of a proportion of the social surplus, realised through taxation. Subsequent attempts at privatisation of health services have been attempts to re-introduce the production of surplus value in healthcare.

After all, it is not as if it was very far away. Although the NHS after 1945 did not produce profits, it served as a guaranteed market for the giant and very profitable pharmaceutical industry. Incidentally, the end of the market in healthcare meant that some professions - in particular medicine, dentistry and to a lesser extent nursing - were guaranteed legal monopolies on who could call themselves a doctor, dentist or nurse. The reintroduction of the market carries with it the necessary corollary: the proletarianisation of healthcare professions.

The introduction of physician associates, nurse associates and a range of other grades in professions allied to medicine has led to a weakening of control by professionalising bodies, such as the British Medical Association and Royal College of Nursing, and the forcing down of wages for junior doctors, among others. This finds its expression in class struggle, as we saw in the most recent strike waves in the NHS. It is instructive, however, that this was not replicated in other sectors of health and social care, such as care homes, where the trade union base is extremely weak.

The trade union response to the demise of NHS England has been predictable. RCN general secretary and chief executive (sic) Nicola Ranger said: “The chaotic reorganisation that created NHS England cost billions and took money away from clinical care. Nobody can afford a repeat, now that NHS performance is already at a historic low and money is scarce.”⁵

Professor Phil Banfield, chair of the BMA council, said of the abolition: “This is a high-stakes move from the government. Without NHSE acting as a buffer between himself and the delivery of healthcare to patients, the buck will now well and truly stop with the health secretary.”⁶

While the Public and Commercial Services Union (PCS), which has the most members to lose because of the abolition of NHSE, has been more forthright in its condemnation, its Left Unity general secretary, Fran Heathcote, has said: “Our members will be understandably concerned about this announcement, which has gone ahead without any consultation. Ministers must consult with PCS and our sister unions as a matter of urgency.”

Not much change

The fact is, another reorganisation will not change very much. Marxists generally have not theorised bureaucracy and the field has been left to Weberian sociology, which generally views it in functionalist terms, as the rational organisation of goal-orientated objectives. For Max Weber, this was preferable to either feudal particularism or the real possibility of democracy. (Weber knew whose side he was on, and it was not the proletariat. He also understood that bureaucracy stands in contradiction to democracy, but was writing when there was the real possibility of the proletariat taking power. That, for Weber, was bureaucracy’s great virtue.)

The ruling class faces a problem: it would like to scrap the NHS in favour of a US-style market in healthcare, where most medical services can be returned to producing surplus value, rather than be paid for, at least in part, by the ruling class. However, free healthcare, distributed according to need, remains universally popular. The US system is hopeless, except for those who are so wealthy that they are indifferent to the cost of medicine or are at least able to pay the high premiums for good healthcare.

The US spends more on health as a proportion of gross domestic product than any other nation on earth, but achieves an outcome worse than many far poorer countries, such as Spain, if measured in terms of average life expectancy and rates of mortality and morbidity across the board.⁷ The US, like the UK, has even seen a slight reduction in life expectancy in recent years.

The US system is very expensive, with a far higher proportion of costs being spent on administration than the NHS or comparable tax-based universal systems. The US spends 16.6% of GDP on health (the UK 11.3% and Spain 10.4%), but at the same time it leaves an estimated 26 million Americans - or eight percent of the population - without health insurance at all. Meanwhile, 23% are ‘underinsured’ and a further 12% had a “gap in coverage in the past year”. Consequently, many delay getting treatment, suffer worse health and end up in debt as a result. Around 48% of adults in the US with medical or dental debt are paying off $2,000 or more.⁸

What we need is, of course, a democratic society, based on meeting human need and planned by the producers themselves. The alternative is bureaucratic administration and the kind of sham democracy that we see under capitalism. Since the end of the post-war Keynesian ‘social democratic consensus’ the tendency has been to gradually dismantle the concessions won in the aftermath of World War II, when the USSR was perceived as posing an alternative to capitalism (even though many of the same contradictions would ultimately see the end of the Soviet system too).

As in the USSR, the transition to the market is not easy. It entails the end of social guarantees and a return to naked class struggle. The contradiction between use-value and exchange-value will always lead to a distorted form of healthcare delivery systems - the commodity form - which will mean an excellent healthcare system for those who can afford it and (if we are lucky) a miserable safety net for those who cannot.

In the long term, the inevitable outcome is a worse system for society as a whole. While the NHS expressed the rationalisation (and nationalisation) of Poor Law and charity provision, its central tenets of free healthcare and distribution according to need remain not only popular, but must be a key demand of workers everywhere. No-one is taken in by yet another reorganisation and the transition to a US-style system too dire to contemplate. There is no choice but to resist.