True Tory agenda of public service profit revealed

Right-wing think tanks have revealed the true Tory public services agenda with a coordinated set of policy recommendations to encourage the break up of the NHS into competing social insurers and to allow private companies to profit from state education.

Right-wing think tanks have revealed the true Tory public services agenda with a coordinated set of policy recommendations to encourage the break up of the NHS into competing social insurers and to allow private companies to profit from state education.

Writing in the latest edition of Policy Review magazine, James Gubb (Director of the Health Department at Civitas) writes that:

“Real reform should [look] at breaking primary care trusts up into groups of competing social insurers, as already exists to great effect in many European states such as France, Germany, the Netherlands and Switzerland.”

But a report by the ippr found that, “Evidence suggests that attempts to shift costs from the public to the private sector have largely proved unsuccessful (often simply adding to total health expenditure, and in some cases contributing to increasing public expenditure). There is evidence that private insurers have higher administrative costs (per person insured and as a fraction of total cost) than public health coverage programmes, and less bargaining power over suppliers.”

Indeed, OECD comparative data shows that total expenditure on health is already lower in the UK than in any of the social insurance countries listed (or private healthcare system operated in the US).

In the same magazine, Head of Education at Policy Exchange, Anna Fazackerley, says:

“A knottier issue, which the Conservatives are choosing to ignore for now, is that of profit … Worryingly, there are currently only five federations with five or more academies open or planned, and some of these are already close to capacity. And a significant number of potential multi-academy sponsors say they have been put off by the inability to make a profit. This is critical. The Tories can ignore this issue for now, but at some point they will need to bite the bullet and explain to the public why profit will drive standards up and not down.”

But the current arrangements appear to be working. Andrew Adonis, speaking last year as schools minister, revealed that, “There are now 40 sponsors of multiple academies either open or in the pipeline, including five – ARK, Harris, Oasis, ULT and British Edutrust – with plans for more than 10 each.”

The Swedish experience, favoured by Fazackerley, has resulted in fewer qualified teachers working in profit-making “free schools.” John Bangs wrote recently in the Times Education Supplement that, “on average 84 per cent of municipal school staff are qualified teachers, while this is the case for only 60 per cent of staff in independent schools. Reducing professional development and delaying improvements to facilities also contribute to these companies’ profits.”

Michael Gove, Conservative Education Spokesman, told The Times at the weekend that, “There are over 4,500 charter schools in America of which fewer than 10% are for-profit, so it is empirically false to suggest that this idea can only work in a for-profit system. I’m meeting people every week who want to start new schools and I am not finding that profits are an issue.”

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6 Responses to “True Tory agenda of public service profit revealed”

  1. Henry

    It would be interesting to know how many of these likely corporate beneficiaries are bankrolling the Conservative Party or the Shadow Cabinet. For example, many of Lansley’s office costs are paid by companies in the health sector.

  2. Ed S

    The international comparisons provided are useful, but do not include any reference to outcomes or to patient satisfaction with either their specific use of the health services or with the overall arrangements. Without this data, making the right judgement on where to go next with the NHS is not possible. Anecdotally, the French seem hugely more satisfied with their health service arrangements than with ours. And, yes, they cost more. Quality usually does. I really think we have to stop defending the NHS at all costs and open our thoughts and analysis to other ways of organisation. The NHS has many faults ,even after 12 years of permament reform by the Labour government. Organisations of that size are always going to be very slow and difficult to reform. There is an alternative. Let’s really stop living in the past and deal with today’s reality.

  3. joe fd

    Yes the graph is simplistic. But it makes the simple point that social insurance systems tend to spend more. if the challenge is to extract savings then proposals to move to more expensive systems seems counterintuitive. Nb France has extended central tax funding to ensure equity and control costs.

  4. David Oladele

    I do not agree we should in any bring in any sort of insurance or look on to other countries in order to reform our NHS. The present system is working based on what people a willing to pay for it therefore, if there is going to be any reform on efficiencies it be based as it. This is due to to fact we all agreed that those others are more expensive yet we are able to do things economically therefore what l would suggest would be let the NHS contiue with more efficence drive instead of bring in other countries model. Also, in this country NHS faces bad press on daily basis so it is not suprising that most French would like their system whereas those of us here would be more reluctant due to the bad press. There is evidence that majority of people who had use the NHS were extremely happy with myself included. I have blood pressure and each time l go in for my blood test in my local Queen Elizabeth hospital in Woolich l find the team on duty very caring and working hard to make us happy and it does not usually take more than 30 mintues.

  5. Anonymous

    This is quite poor, really. The headline suggests that what a few think-tankers write about is the “true agenda” of the Tory party – a little silly. The piece then leads on a quote about the NHS which has nothing whatsoever to do with profit – a lot silly.

    It’s only the Fazakerley quote that the profit issue is raised, not Gubb’s point on the NHS. You’ll note that his article doesn’t mention profit once. His suggestion about having competing social insurers doesn’t imply they’re profit-making. His further suggestion that they’re formed from existing PCTs also makes the quote from the IPPR report about public and private sector involvement of limited relevance.

    Your graph then shows an obsession with input measures. As other commenters have pointed out, raw spending numbers are rather immaterial (is the US a model to emulate on this score, given its ridiculously high spending?). Plus, you fail to give the full OECD data which unpacks it into public and private spending – which is where we would see that other systems’ higher spending levels owe mainly to their routes of private co-funding. This has potentially adverse side effects in terms of accessibility, but if higher spending is sought, the highest levels are rarely achieved through an exclusively publicly funded route.

    Finally, the Gove quote at the end seems to offer exactly the opposite message to that which you’re putting forward. He says that US Charter Schools are primarily non-profit and work successfully, and that lots of people want to start a school under the proposed plan, and “profits [aren’t] an issue” – i.e. that the current policy’s bar on profits isn’t getting in the way of it gathering momentum for implementation.

  6. Will Straw


    Anonymous – It would have been better if you’d left a valid email address but happy to reply in any case.

    1) It’s not inconsistent for the headline to refer to part of the article.

    2) The body of the Gubb article was about costs and efficiency savings so it seemed reasonable to focus on input measures.

    3) Others have commented on the satisfaction and output measures. If you have good data, send it our way and we’ll update.

    4) Also happy to see stats on the public vs private breakdown. Do you think it would show a dramatically different story?

    5) We never suggested that Gove was signed up to bringing profit into education (hence referring to the think tankers as the “true Tory agenda”). We included his quote so we couldn’t be accused of leaving out the Opposition’s position.

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