It is noteworthy that after more than sixty years of the NHS, it can be claimed that the services are still more or less free at the point of use. As a Civitas report has pointed out, sick patients in the UK very rarely fail to use medical services on the grounds of costs (as compared to the USA and Germany) (see Gubb 2006, 40).
Furthermore credit must go to the Labour Government for increasing expenditure on the NHS so rapidly since 1997. Whereas between 1981 and 1998, real NHS expenditure rose at an annual average rate of less than 3 per cent, from 1999 it began to accelerate rapidly and in the five years between 2002/03 and 2007/08, real spending on the NHS rose by an average of 7.4 per cent a year (Wanless et al 2007, xviii). As a result, whereas public expenditure on health, as a percentage of the UK's Gross Domestic Product, was less than 5.4 in 1997/98 and was down to 5.3 in 1999/2000, by 2007/08 it had risen to 7.32.
That's the good news.
The bad news is that the NHS is being privatised with much of the investment in the NHS being financed by the private sector. This would have horrified Aneurin Bevan, under whose leadership (as the Minister of Health and Housing in the Attlee Government), the National Health Service was established. Bevan had argued for four principles for the health service - free at the point of use, universal in reach, publicly funded and responsible usage by the public (see Hayhurst, May 2005). It was in 1951 when the first of these principles was broken (with the imposition of prescription charges) that Bevan resigned from the Gaitskell government.
Clearly the use of the Private Finance Initiative (PFI) violates the third of Bevan's four principles as would other initiatives which have advanced privatisation in the National Health Service. The PFI is the scheme whereby companies in the private sector not only build new hospitals but also finance them and rent them back to the NHS over long contract periods of more than 30 years.
Of course, the PFI covers more sectors than just health but this article is based on research that I have carried out on PFI in the hospital sector. However it is worth emphasising that within the NHS, the PFI model is also being applied to primary care premises (General Practice surgeries and health centres) in the form of the NHS Local Improvement Finance Trust or LIFT. By March 2007, about 30 companies held commercial contracts to provide primary care services in England through their ownership of 74 health centres and general practices (Pollock et al, September 2007, 475). The 2008 Annual Report of the Department of Health stated that "NHS LIFT has now attracted over £1.3 billion of private capital investment and this level of investment will continue to grow in 2008/09 and beyond" (Department of Health May 2008, 179).
Since 2004/05, the role of PFI investment in the NHS has grown rapidly, and over the past two years (2006/07 and 2007/08), it accounted for about a fifth of total capital investment (Department of Health, May 2008, 174). Furthermore, when we look within the NHS at the hospital sector, the role of PFI has been even more important. The NHS Plan of 2000 set a target of over 100 new hospital schemes by the end of 2010. By the end of 2007, 93 new hospital schemes were operational, of which 70 were PFI schemes. In its 2008 report, the Department of Health reported that a further 14 PFI hospital schemes were underway and more were envisaged (Department of Health, May 2008, 179).
2. This information is from Hansard, written answers, 15 December 2008, Column 458W - website publications/parliament/UK - accessed on December 31 2008. For more information on expenditure on health care in the UK see Office of National Statistics, April 2008 and Wanless et al., 2007.