The art of milking the NHS
Thursday 28 June 2012
by Solomon Hughes
David Miliband MP cashed in on NHS privatisation with a £12,500 speech to the financiers behind one of Britain's leading NHS privatisation firms.
Miliband was paid for giving a talk to the annual meeting of Bridgepoint Capital in May. Miliband admitted details of this well-paid gig for financiers in the latest register of MPs' interests.
Miliband says he spent four hours on the speech - a qualified nurse earns around £31,500 a year.
So in four hours entertaining the money men taking cash out the NHS, Miliband earned more than a nurse makes in four months working for the NHS.
Bridgepoint is a private equity firm. It owns Care UK, which grew to be Britain's biggest supplier of private medical care to the NHS under the last Labour government.
Care UK made millions selling overpriced operations to the health service, in competition with existing NHS hospitals. Now Labour is in opposition, shadow ministers are keen to attack the firm.
Andrew Lansley's Tories have picked up new Labour's NHS privatisation programme with enthusiasm. But Ed Miliband's front bench are now critics of the businesses taking over the NHS.
In April Labour's shadow health secretary Andy Burnham attacked the government over "real risks to patient safety and continuity of care in a more fragmented health service" and demanded an investigation into Care UK after the British Medical Journal revealed the firm was not processing urgent X-rays in Brent.
During the last election, Burnham also wrote to David Cameron demanding an investigation into funding of future Conservative Health Secretary Andrew Lansley's office by the wife of Care UK's director.
So Lansley is criticised for getting cash from the wife of a Care UK director, but David Miliband gets £12,500 from Care UK's owners.
Former Labour health secretary Alan Milburn now works as head of Bridgepoint Capital's European advisory board - an appointment that attracted controversy as he got the job soon after the last Labour government awarded another Bridgepoint-owned firm, Alliance Medical, a major NHS contract. Alliance Medical sold overpriced and sometimes poor-quality scans to the NHS in a scheme that made money for it and for Bridgepoint but cost the NHS millions.
The firm that paid £12,500 for a four-hour date with David Miliband has interests beyond the NHS. It knows how to make a profit in difficult times - Bridgepoint also owns major British debt collection firm 1st Credit which "focuses on the acquisition and collection of distressed debt portfolios from credit providers such as banks, credit card companies and utilities."
This firm chases poor people so hard over their debts that in 2009 the Office of Fair Trading rebuked it for using false threats of legal action against debtors.
David Miliband's latest high-paid gig shows everything that is wrong with new Labour - it preached about the wonders of the market and then takes money from firms that rip off the health service and squeeze the poor.
Andrew Lansley blamed the private finance initiative (PFI) for forcing him to place South London Healthcare Trust into administration.
The trust, which is in charge of health services for over a million folk in Greenwich, Bromley and Bexley, has a £150 million debt. Lansley is pointing at two PFI schemes for causing the problem.
Private contractors are charging huge amounts for running two hospitals - the Queen Elizabeth in Woolwich and the Princess Royal, which replaced Farnborough Hospital, near Bromley.
Lansley's people told the newspapers that "this hospital trust was brought to the brink of bankruptcy by Labour. It is losing £1m a week, money which could be spent on 1,200 extra nurses for local people," adding that "the standard of care that patients receive at the hospital trust is not good enough."
The Tory government is saying that the private contractors squeeze unjustified money out of the NHS and that patients suffer as a result. And they are right.
Former Tory health secretary and current head of the health select committee Stephen Dorrell said the PFI deals were "indefensible." And he is right.
So who is to blame? Alan Milburn was the top Health Minister who gave the green light to the Greenwich and Bromley schemes in 1998.
When Milburn announced the Bromley deal with a bunch of other hospital PFIs, he said: "Every scheme is a bargain." So don't send Milburn to do your shopping - he thinks wasting millions is a good deal.
Milburn boasted that the private contractors would run the hospitals "for 30 years, which makes them even better value." In fact, this means they can gouge profits from the NHS for decades.
But when Milburn was pushing PFI, the opposition didn't come from the Tories. Back then the dissenting voice came from Unison's Bob Abberley who pointed out this was a bad deal, saying: "This is hospitals on hire purchase" and "Britain needs new hospitals run by the public not the private sector."
Tory silence wasn't surprising. PFI deals take years to put together and the plans for Greenwich and Bromley were drawn up in 1996 when the health secretary was Dorrell. So both new Labour and old Tory ministers are to blame.
Dorrell - who has been suggested as a potential replacement for Lansley should the Health Secretary implode - is the architect of a policy he himself describes as "indefensible."
There is a third group to blame for ripping off the NHS - the contractors.
Under the Tory plans, the contractors who got to take over these hospitals were both Tory donors - Taylor Woodrow for Bromley, Trafalgar House for Woolwich.
Under Milburn, Labour-supporting financier David Metter and his firm Innisfree got to cash in on the NHS.
This is what cross-party consensus looks like - Tory and Labour ministers sign "indefensible" deals which mean their business friends profit by squeezing the life out of the NHS.