Southern Cross is not an aberration. Of course people will like to say it's a bad apple, but it's not. It is the model for the privatisation of the NHS.
How? Simple. Capture an income stream from the state - in this case fees for looking after the elderly.
Capture physical assets used for their supply. In Southern Cross' case it is old people's homes. In the future it will be hospitals and other care facilities.
Sell of those assets to make a big gain. Even in Foundation hospitals the temptation will be enormous: you can guarantee big bonuses for directors of they do even if they can't be shareholders.
Load the institution with heavy recurring obligations as a result, after paying out the bonuses.
Then find the whole thing runs into trouble.
Don't worry: the NHS can't fail just as Southern Cross in a real sense can't fail - the state has to pick up the pieces.
So the gain is private and the cost is public.
That's banking all over again.
And coming to the NHS as a whole very soon care of Andrew Lansley and David Cameron.
Oh, the mechanisms will vary, but have no doubt the result will be the same: the only business model in town right now is stripping the state for private gain. And it's sponsored by the Tories.
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Good article Richard and hopefully someone will look at what has happened to Southern Cross and put two and two together. Whilst I think that the NHS has been overburdened with middle management (as have most government departments), the fix is not to privatise this in the way that Lansley is proposing but to try and streamline it so the emphasis is on affordable care.
Over the last few months I have come to the conclusion that this is how the privatisation will occur. For example, the Health Bill will remove the asset lock on Foundation Trusts, which means that they will be allowed to sell their hospital property. This will be perfectly legal and within their own constitutions because the FTs will argue that by selling their land they will release equity that they can re-invest into better healthcare for their patients. In fact, put like that, perhaps FTs should be *forced* to sell their properties so that we get more money re-invested in better equipment and more, highly trained staff. It makes sense doesn’t it? Umm, no: Southern Cross.
Another point to bear in mind, as you mention, FTs are independent so they can pay their directors whatever they like (even more, *gasp*, than the Prime Minister!) In fact, at the moment, hospital directors are paid relatively reasonable compared to the private sector, but with greater autonomy this will change. It is interesting to note that in the US the highest paid hospital board directors are in the nonprofit hospitals – ie in organisations similar to the social enterprises that the government is obsessed with at the moment.
@Richard Blogger
This is an intriguing development for me as a land value tax campaigner. There is so much going on underneath the surface (no ‘pun’ intended) with landownership. More and more commercial landed property is being transferred to financial institutions as businesses see that their interests do not lie in asset/land speculation. This was evident even 30 odd years ago when my employer was involved in a leaseback deal for the site where I worked and a new head office complex. This is actually perverse economics since allocation of land to best use should surely mean that the user is the owner, with no middleman involved. This is the result of resources being expunged from neo-classical economics (to paraphrase Martin Wolf).
This whole facade could be blown away if we did the sensible and collected all land rent for public benefit – starting with replacement of business rates with LVT with the bill sent to the landowner.
Not sure the analogy holds.
Care homes are exactly that — people’s homes. The NHS does not (in the main) provide homes for people.
In the local authority where I work, we give service users a wide choice of approved homes. Most of the providers on the list are private sector and they vary.
Even if our local authority had the capacity to provide homes for everyone (which we don’t, and it would be a bad idea with overcapacity), we just simply would not have the expertise to build the range of homes necessary to meet the range of individual preferences. It would be pretty much one-size-fits-all.
Many prospective users take great care in investigating the homes before making the choice, and often it is the user who actively chooses the private sector home that meets his/her specific requirements. It is in almost every sense (other than funding and accreditation/monitoring etc) a private arrangement.
Are you saying the individual should be denied this choice? Are you saying that the local authority should not fund the care simply because the provider is ‘private sector’?
I have had plenty of scraps over the years with care home providers, but have not been personally involved in the Southern Cross case. I suggest it is very unlikely that anyone will be put out of their homes — very last resort stuff. And if the homes do close, it really isn’t the end of the world, and there is plenty of other capacity in the market.
I find these comments bizarre: actually, I find them much worse than that
First, when looking for such a facility a while ago for a relative easily he best was local authority run. Not by a bit, but by a long way
Second, if you’re really so indifferent to old people’s right to a home then frankly your judgement is impaired
Third, there is no reason on earth why you couldn’t rovide enough care homes with variety – it’s simply called hiring people
And last, I’m saying the instability of private sector does make it quite emphatically a poor substitute for the state
Maybe the situation is different where you are but here in the NE, there is overcapacity and plenty of choice, including some very nice and popular homes. Word of resident dissatisfaction travels fast and keeps the incumbents on their toes.
“Second, if you’re really so indifferent to old people’s right to a home then frankly your judgement is impaired”
Not sure I understand this. I am not indifferent to their right to a home. My point is they should live where they want to live, not where a bureaucrat tells them to live. Let the state pay. Let the state accredit and monitor. But why boss people around?
Even if out Council hired lots of people to to design and market the world’s best care homes (so unlikely to happen it is not worth discussing), there will always be someone who will want something different that is provided by the private sector. Places that you and I might not like, but for some reason, the person likes it. Who are we to say no to it.
“And last, I’m saying the instability of private sector does make it quite emphatically a poor substitute for the state”
The service user who chooses a private sector home obviously doesn’t have the same security of tenure as a homeowner (just like any renter).
I have had experience in having to move elderly residents out of a home. It is always absolute last resort (unless the place in unihabitable due to floods etc). If you handle it well (eg try to keep groups of friends together, get their family on board, keep communicating, maybe some TUPE to ensure continuity of staff etc), it can be handled. We are talking about a generation that survived the War and the Depression. Maybe they are a bit softer in your neck of the woods, but the old folk of Geordieland/Yorkshire are pretty tough.
I think your last paragraph proves how fatuous your thinking is
“I think your last paragraph proves how fatuous your thinking is”
Are you suggesting the public sector can 100% guarantee security of tenure in the same premises? Do you think a public sector home would never have to move people out occasionally? What happens if the premises become unihabitable due to fire or flood?
Anyone in this field (public or private sector) MUST have a clear understanding of how to move residents out if required. If they don’t, they are just plain negligent. My colleagues do.
And if a service user wants to add to these risks ‘the provider’s financial distress’, who are we to tell them they can’t. The point I am making is that we are talking about grown adults who are (assuming they have the capacity) perfectly capable of making their own choices and understanding the risks. They really do know what’s best for themselves. Good luck trying to persuade them otherwise.
Now you are getting desperate
That is a ridiculous comparison
“Now you are getting desperate
That is a ridiculous comparison”
No, I am simply pointing out that adult care is subject to something called the ‘personalisation agenda’. Set up in around 2007, and am yet to meet anyone who thinks it is a bad idea in principle, across the political spectrum.
NHS is not (other than in a limited range of areas with parallels to long term care, such as mental health).
It isn’t accurate to compare the use of the private sector in an area with a personalisation agenda with an area that (in the main) does not. Where there is a personalisation agenda, choice of the use of the private sector is made by the service user, not by anyone sitting in a town hall. That’s my point.
That’s just neoliberal clap trap to excuse the market
Labour should be ashamed of it
It’s madness in healthcare – people often don’t have capacity to decide – they need and deserve the best
“That’s just neoliberal clap trap to excuse the market”
Labour should be ashamed of it”
I work with a large Adult Services team in a northern Labour local authority. I have colleagues (and work with elected members) who are far further left then you. I have colleagues etc on the right of politics too. We all pretty much agree this is a good thing. I have never heard any one regard it as neoliberal claptrap, or anything along those lines or even be critical of it.
You are obviously entitled to your view, but from those of us on the ground, it is very much a minority view.
“People often don’t have capacity to decide”
I am afraid we will just have to agree to disagree about this. Even for the minority who lack capacity for medical reasons (e.g. dementia etc), there are plenty of checks and balances to ensure their interests are met, whether by family members or others. The bureaucrat is not well placed to make this decision about what constitutes ‘the best’ for a particular person.