Wes Streeting has doubled down on outsourcing in the NHS, calling it pragmatic [1]. Pragmatism, is defined as “concerned with practical outcomes rather than theories” but also “concern with practical consequences”. We need to look at consequences, it’s not just about getting some operations done, it will certainly do that for the patient [2] it also has consequences for the NHS itself and it is those that we need to be concerned about, there is a high likelihood that this will have an undermining impact on the NHS. These risks are known, ignoring them is a choice.
Engaging with the world as it is rather than ideas and theories sounds good, but the world as it is comes with a lot of assumptions, conventional wisdom and group think. In the last 14 years of conservative government we have seen incompetence, but since Thatcher the assumptions, conventional wisdoms and group think that are still prevalent amount to this; business is good, the state is bad, business must be allowed to operate freely and maximise its return for its shareholders. People finally got fed up with the Tories. It’s been a long time since the crash of 2008 and who now remembers Theresa May saying “We do not believe in untrammelled free markets. We reject the cult of selfish individualism. We abhor social division, injustice, unfairness and inequality. We see rigid dogma and ideology not just as needless but as dangerous."? [3] Obviously not all of the tory party agreed with her (who knows if even she believed it), but what about Labour?
The problem is we don’t seem to have any joined up thinking on the Labour side; they will nationalise the railways, as and when the contracts expire (but the railways sort of work), they will not re-nationalise water (despite the fact that the rivers are full of shit) because they don’t want to take on the debt - this is a sunk cost (no pun intended), its been used to pay dividends - the costs are heading our way regardless.
So, outsourcing what is that all about? Get rid of the whole thing and it’s privatisation. Outsourcing is about making a thin public sector place big contracts with companies to act as service providers, so we pay for the service and the profit the shareholders make out of it. Profit is a siphon taking away the increase of the common wealth, it is not a “right livelihood”. One thing outsourcing does, and it is really good at, is that it removes democratic accountability, it hides its inner workings from public scrutiny because its a business and it doesn’t want its competitors to have information - no matter that its supposed to be a public service we are asked to take it on trust. But when there is no scrutiny of what the executive part of government is delivering it just fails. It fails from Water (with raw sewage) to the trees of Sheffield (unnecessarily cut down), from Army Recruitment (which doesn’t get the numbers), to unruly, squalid prisons (with high recidivism), from Probation (which failed so badly it had to be taken back), to Head teachers (who cannot refuse to cut the grass to save money because the PFI contract stipulates it will be done). It has cozy deals with big companies (who are still small fry compared to the scale of much public sector work). Capita is a big business we keep using despite its problems [4]. In the NHS we see The Spire popping up all over - it is a full blown for profit - we hear much less about mutuals like Nuffield and BUPA.
Sometimes it is necessary to remind ourselves about values and assumptions especially where pragmatism is being claimed. Let me take you on a short detour to show why.
I have often heard it said that the left and right are similar, both want to see less government. In Marxism this is called “the withering away of the state” (ironic given Lenin and Stalin’s record). There is a framing problem with this point of view however; the left and right are not talking about the same things. Marxists imagined empowering people having destroyed capital’s power (and the state that enforced it) but were vague about what followed. The right wing economic libertarians who want to reduce the state just ignore power altogether so whoever has power (by getting rich which is a good thing) can just exercise it over those who don’t. If you are poor that’s too bad, if you don’t like it get another job and don’t complain, if you cannot make it you are not a survivor of the fittest. Social Democrats want to reform capitalism to give it a human face but since Thatcherism have been all too ready to accept economic liberal framing and haven’t addressed power. Peter Mandelson (again in favour) famously said that that he did not mind if people got filthy rich so long as they paid their taxes, then forgot all about the tax part and taxing the rich is still off the agenda. No wonder social democrats struggle; since Thatcher they have accepted their opponents’ framing and so cannot articulate an argument against the ruthless power that money brings to stop them doing even modest things [5]. Of course it could be what they actually believe.
The point (and it is vital) is that unless you acknowledge your philosophical point of view and relentlessly explain why it is different and that your argument starts from different values you end up being boxed in - the assumptions, conventional wisdoms and group think may be wrong but they go unchallenged. In management terms you lose your room for manoeuvre. The power of the Overton window is used to make alternative ideas seem daft. That’s why people who ask for Labour to spell out its vision are NOT just asking to be comforted by having something to hope for they instinctively get it, they want small changes to be the start of something bigger. Any business doing a corporate strategy will define its vision of what it is or wants to be and connect its actions to it. That is why those who say those asking for a vision should shut up and be “pragmatic” are plain wrong, its not about pointless hope, its about understanding the direction of travel.
What is true in general is true in the specific case of outsourcing in the NHS. A very good example came up in the Guardian which reported on the outsourcing of Cataract operations [6]. The supposedly pragmatic view is don’t worry about the use of the private sector, just fix it for patients. The practical consequences, which are also part of pragmatism, are that resources, expertise, and trained staff are taken from the NHS to support profit, there is long term damage to capability - the direction of travel therefore is going in entirely the wrong direction.
There is also a trend in the NHS to insourcing [7] I will leave to a footnote, similar arguments apply.
Now use different values and assumptions to reimagine and reframe outsourcing; empower small groups of professionals to set up and run a cataract service which could perhaps be run as a fast throughput, repetitive process. Business sometimes talks about “cookie cutters” when they want something repetitive. Organised as a cooperative, or a partnership within the NHS framework one could imagine this and it might be worth trying BUT that is not what is on the table - why? A set of assumptions, conventional wisdoms and group think which privileges business. A failure to be imaginative, to create solutions that operate within the values of public service, to look for solutions that, as well as fixing a short term problem for the patient, would also strengthen and reinforce NHS capacity and capability for the future.
My background is in business: I have an MBA and I am a chartered management consultant. When I worked for IBM their consultant training was accredited by the CMI. IBM are big fans of Porters five forces of competition. IBM’s training courses applied the analysis of competative forces to the entire supply chain with the explicit purpose of looking for points of leverage where value could be extracted (note specificaly not created). Choosing to ramp up outsourcing in the NHS is not pragmatic, it adds profit extraction to the supply chain, using publicly funded resources to do so; it is a political choice [8] with a business is best ideology behind it.
Notes
[1] calling it pragmatic - I heard him on BBC Today, Thursday 11 June 2024, the message has been pushed out and it has been reported by many news outlets recently
[2] for the patient - I had a referral to The Spire for a shoulder injury. Patients are users of the system, they pay for it through taxation, they do not manage it and are not included in its decision making - you take what is on offer. When I served as a city councillor from 1978-83 the majority party would appoint people to the boards of local hospital trusts (and other things as well), this is part of the wider erosion of democracy and accountability that has been going on for years. See my Blog We need a lot more than PR to fix our democracy
[3] we do not believe…2017 Conservative Election Manifesto launch, Guardian front page 19/5/2017 https://www.theguardian.com/politics/2017/may/18/theresa-may-launches-conservative-manifesto-for-community-and-country
[4] despite its problems - Capita https://www.independent.co.uk/news/business/analysis-and-features/capita-shares-profit-warning-carillion-private-firm-contractor-government-what-does-it-do-explainer-a8187451.html
[5] even modest things - a textual analysis of The Labour Party Manifesto was carried out by Kevin Farnsworth, a professor of social and public policy at the University of York using data held by the manifesto project, a German Science Foundation (DFG) project with over 1000 manifestos from 50 countries. Aditya Chakrabortty’s reported on it like this “On Farnsworth’s analysis, Starmer’s platform in 2024 is closer to that of Tory Ted Heath in 1974 than it is to almost any Labour manifesto. Perhaps that should come as no surprise, given that Starmer’s team mentions poverty only 14 times in 130-odd pages, while “business”, by my count, gets about 60 mentions. So what, you may say: get the Tories out first, and then trust Labour to do the right thing. But if you want a well-funded NHS and a decent social security net, you need a big party to argue for them.”
https://www.theguardian.com/commentisfree/article/2024/jun/15/policy-keir-starmer-manifesto-labour-business-tory?CMP=Share_iOSApp_Other
And the actual data is here
https://manifesto-project.wzb.eu/information/documents/information
[6] utsourcing cataract operations - report covering the reports findings https://www.theguardian.com/society/article/2024/jul/10/eye-doctors-say-private-cataract-operations-have-hurt-the-nhs?CMP=Share_iOSApp_Other
[7] insourcing (we are almost straying into newspeak territory here) is a great example of a distorted system, it allows private companies to use NHS facilities in their down time, what could be wrong with that. Well - the staff are NHS staff who are unwilling to do overtime (because of the pension cap) so there is a straight forward conflict of interest. One analysis says
“consultants in Manchester, Sheffield and London are among directors of “insourcing agencies”…
”the reason they can [bid competitively] is that the private companies don’t have the fixed costs of their NHS Trusts “…
The NHS trusts can “find themselves paying significantly more, particularly for nurses and allied health professionals”…
”the pension issue has not been resolved and consultants do not want to do extra NHS hours”…
”If the companies can find NHS staff to run an operating theatre or carry out diagnostics on a weekend, then the NHS should be able to do this as well”
…and on,
The NHS framework agreement that sets out the rules is here https://www.sbs.nhs.uk/services/framework-agreements/insourcing-of-clinical-services/
And the analysis of the way it operates (and the source for quotes above) here; https://www.nhsforsale.info/insourcing-how-private-companies-work-inside-nhs-hospitals/
[8] It’s a political choice, like austerity, see my Blog Ending Austerity