From the TUC

The health service market in action (guess the winner)

20 Sep 2011, by in Public services

When NHS Surrey came to award preferred bidder status for the delivery of its community health care services, which of the following organisations won the contract? Was it:

  • Local NHS Foundation Trust, Surrey and Borders Partnership
  • Much lauded NHS social enterprise spin out and ‘Big Society Award’ winner, Central Surrey Health
  • Private provider, Assura Medical Ltd, 75% owned by the Virgin Group?

Those of you familiar with the Government’s private sector bonanza that was the Work Programme will probably have worked it out.  The award of NHS Surrey’s community health services to Assura Medical Ltd has caused a fair degree of outrage.  Clearer evidence of the privatisation by stealth of the NHS would be hard to come by.

And, of course, this is also another wake up call for those who retain faith in the Big Society and the Government’s stated intention to open up public services to social enterprises, charities and employee-led mutuals.

Advocates of the role of social enterprise in the delivery of public services are understandably dismayed, afterall Central Surrey Health was described by Cabinet Office Minister Francis Maude as “the Big Society in action”.

We’ve said before that the market is at the very heart of the Government’s public service reforms.  As a social enterprise, employee-led mutual or local community or voluntary organisation you will be invited to compete but don’t expect any favours.  The market is fundamental.  The Open Public Services White Paper is very clear on this.

And so it goes.  More ‘open  public services’.  More private sector winners.

No wonder then that Peter Holbrook, Chief Executive of the Social Enterprise Coalition, is becoming increasingly hostile.  The Social Enterprise Coalition found plenty to criticise in the Open Public Services White Paper.

In response to this week’s news in Surrey, he had this to say:

It is not enough for government to open up markets; it needs to create fair markets that benefit society. Some of the financial criteria used in contracts create an unequal playing field in which social enterprises are unable to compete because they may not have the same financial backing as private sector providers. Unless swift action is taken to address this we will see social enterprises and mutuals lose out to the private sector.

Judging by the direction of travel outlined in the White Paper, the Localism Bill and the Health and Social Care Bill, we don’t think this Government is about to alter its adherence to competition at all costs.

To its credit, the Social Enterprise Coalition is unafraid to call the Government out on this, unlike some other ‘leaders’ we might mention in the not-for-profit sector.

Peter Holbrook is completely right when he suggests that

public sector workers would be ‘understandably anxious’ about spinning out from the NHS and setting up a social enterprise on the back of this news.

But his call for reassurance from the Government that “they will not be operating in markets weighted against them” might be misplaced.

Markets will be inevitably be weighted against any kind of provider that does not share the economies of scale, access to capital (reportedly the crucial element in the Surrey example) and capacity to tender that larger private providers do.  This is why evidence across the EU suggests that the main result of the liberalisation of public services is the transfer of ownership rather than an increase in the diversity of providers.