As the Guardian has noted this afternoon:
To help NHS trusts deliver what's needed, Hancock has written off £13.4bn of historic NHS debt.
He said at this afternoon's press conference:
This landmark step will not only put the NHS in a stronger position to respond to the pandemic, but it will ensure our NHS has stronger foundations for the future too.
Let me put this in context.
First, the NHS had no debt at all. It was owed from NHS agencies, owned by the government to the government itself. That's not debt: that's just book-keeping.
Second, that book-keeping was created to, in particular, reinforce the internal market reforms created by Andrew Lansley in 2012, which were the undoubted intended precursor for NHS privatisation. That process was massively bureaucratic, and so costly. It diverted massive effort into corporate management, PR, and accounting when none of that was needed: no one needed to sell the NHS to anyone. But worse, it dismantled the National element of the NHS.
Third, that debt was designed to be penal: an NHS trust that ran a deficit was penalised by expecting it to recover that deficit the following year, and if it failed, then the penalties were compounded. As such many of the Trusts in the most vulnerable areas of the UK were heavily penalised by this process which resulted in significant increases in health inequality as a consequence.
Fourth, writing this debt off does not mean that these inequalities are now being addressed.
But most importantly, if the debt is written off because that provides the NHS with stronger foundations then the next logical step is to scrap the whole NHS internal market and as a result rebuild both the idea of a national service (and that does mean Wales, Scotland and Northern Ireland do, of course, keep their services) and the idea that care must be integrated, so that GPs, hospitals, ambulance services, mental health care trusts and others are no longer in competition with each other.
In other words, NHS debt write off is not enough now: the renationalisation of the NHS is what is required now. Nothing less will do.
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Revoke the Health and Social Care Act 2012 and renationalise the NHS
https://petition.parliament.uk/petitions/300019
Signed it
Bless you!
signed it ie the petition
Signed also
And me!
I recall a few years ago now, when one of the SE London/NW Kent Health authorities got into financial difficulty (result of PFI deal turning sour…) it got merged with neighbouring authority, and apparently was told to cut whatever it took – thinking the unthinkable about what – whatever was necessary to sort out their finances – except for one thing: the PFI deal that caused the problem.
Lewisham was meant to lose its A&E at the same time for the same reason, but a massive mobilisation of the local community crowdfunded a successful legal challenge to Jeremy Hunt’s decision. The A&E is still there, but Hunt changed the law so that particular challenge could not be used again.
This is exactly what they used to do to British Rail – crow about the money it owed or overspent but never about how much they were withdrawing support or putting in more support in other means of transport like roads and coastwise shipping.
Then having manufactured ‘consent’ they privatised it and ended up paying more in support grants now that the privateers have their snouts in the trough than when it was nationalised.
But you are right – when the NHS was created, it was not created based on the basis of its support being some sort of record of debt. The NHS was supposed to be a commitment of funding from Government for ever and that commitment has been undermined for years on the basis that we cannot afford it when we know they they can and always have. That so-called debt was just been used to portray the NHS as poorly ran, overwhelmed and crap, hoping that people will go into the more costly private provision instead.
You call this a charade. That is too kind.
This began under Mrs Thatcher . For further elucidation watch Adam Curtis’s documentary ‘ The Mayfair Set . Entrepreneur spelt S.P.I.V. ‘ Privatisation, PFI were all part of the con. The Left , Blair, Brown were beguiled by all this and Labour became the zombie party . I can’t wait to see the end of the hedge fund and private equity .
Thank you, Richard. The Government must be both the debtor and the creditor, presumably so in that case the net effect must be nil. The question has to be why present this in such a public way as if it was a major substantive move, in the middle of a crisis? I think I can guess ……
You just can’t allow your attention to wander for a moment, or you will miss the sleight of hand; just when it becomes embedded as the irrevocable and unarguable conventional wisdom.
Do you ever sleep, Richard?
I do sleep, but I am also a master at cat napping to make up for its absence
20 minutes can make up for a lot of lost sleep for me…
Seem like you needed a little more sleep before you wrote this article!
8,000 words today
Sure 8 make some typos
Gary Gibbon, C4 News, if I understand him just now, has just bought the sleight of hand – at a stroke of the pen £13.4Bn of debt written off, and he mentioned it in the context of debt and the unprecedented nature of such a decision for any Chancellor. The Chancellor (and the Treasury), of course hasn’t announced it, which should tell him something……
Is this the new conventional wisdom?
I think he couldn’t get what was meant …. I am watching C4 now
The best coverage
In the same way as every debtor in the world is balanced off by an equal and opposite creditor.
So carried to its logical conclusion – – every debt in the world should be written off since they balance each other off anyway?
Read what was written
Now consider just how stupid your extrapolation is
Please do not call again
What a load of utter tosh this article is.
NHS Trusts have been paid by results to set scales.
In order to reduce waste and profligate spending they were set targets to make efficiency savings.
While the economies were being put in , Trusts were given extra funding by way of a loan to balance their books.
Now this funding loan is to be written off.
This will mean that the annual cost of financing the loan will also disappear.
This government is doing a sterling job of preserving the NHS and bringing it up to 21st century standards – no matter what the Guardian newssheet reports.
You really don’t live in the real world, do you?
Richard I know you do not need reinforcements on this issue but this statement made my blood boil.
“This government is doing a sterling job of preserving the NHS and bringing it up to 21st century standards…
In 2010 Dame Deidre Hine issued a Government report on the handling of the H1N1 epidemic. It demonstrated the unpreparedness of Government to meet the demands of a pandemic. Dame Deidre highlighted (at section 6.44) the rapid depletion of available staff in the case of a pandemic. She also pointed out that had H1N1 followed the anticipated trajectory the availability of ventilators would have been quickly “overwhelmed”. Cov 19 has a higher infection rate than H1N1 and bigger ICU demand.
Since that report there have been annual warnings of the lack of resources to meet the demands of a pandemic.
In March 2018 the Independent commented on a report that warned
‘History tells us that it is likely the next big outbreak will be something we have not seen before
…most likely developed through zoonotic transmission, where an infectious disease which usually afflicts animals jumps to humans.”
The Telegraph in the same month opined “The global financial response to pandemics has previously been described as a cycle of panic and neglect.”
In May 2018 the Express highlighted an academic study that warned “Health officials warn while they are convinced a deadly pandemic is coming, they still have no idea what it will be. However, experts believe the disease or virus is likely to be respiratory, as not enough research is being put into this area and respiratory issues are difficult to spot once they have begun spreading.”
This Government has always known that a pandemic was coming, they knew it’s likely nature and origin, they have always known there were serious shortfalls in availability of staff, equipment and other resources. What they did was to strip out all NHS contingency, created a hostile environment that drove away EU staff, they introduced student fees for nurses and took away bursaries. The promise by David Cameron’s Government in 2015 to meet the shortage of doctors by producing 5000 by 2020 actually produced 272 https://www.bbc.co.uk/news/uk-politics-29415929 this promise was revised to 3000 extra doctors (or doctors in training) by 2025.
The Government claims to be following scientific and medical advice. The strategy they followed was to put their faith in Herd Immunity and base their estimates on seasonal flu. The WHO say reaching the Herd Immunity Threshold (HIT) is ONLY effective when combined with vaccination. In any case Cov19 is closer to Sars in nature with an HIT of 80% not the 40% of Flu. WHO say testing is essential, remind me where are on that is it promise 5 or 6?
Thousands of patients have been sent away to live with pain, impaired vision, deafness precisely because this Government failed to listen, wilfully ignored evidence that conflicted with their Neoliberal dogma, spent more time preparing excuses than medical defences. They chose not to join EU initiatives. They ignored the World Health Organisation. Communication has been appalling, inaccurate, misleading. My comments only address the immediate problems of Cov19 but I could widen them to include dentristry, optometry, GI illness, deafness, all victims of creeping privatisation. A sterling effort? Only if the goal is the destruction of the NHS.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/61252/the2009influenzapandemic-review.pdf
Thanbks Bill
Sorry I’m not sure if this means PFI will be written off?
I did not read it that way
PFI is not recorded as debt in many cases
Well said Richard. Bang on the money.m
Hah – you do not publish comments which contradict your own ill-founded opinions
Yes I do
But trolls do not last for long
This is a place for intelligent debate
You won’t last long
Thanks for the explanation. It did make me do a double take and I wondered what the exact mechanisms were. As you say, a sleight of hand.
Is it right to presume this is an English NHS-only affair?
No idea….it was not said
I agree entirely – but we may also be overlooking a bigger picture?
http://www.progressivepulse.org/economics/debt-is-control
May I put on Tax Research tomorrow, with links and credit?
every policy is being written to benefit the money men.
That is why Dyson got a contract that had been issued to a professional ventilator company already exporting fully tested kit.
Bullies will always seek to exploit any emergent vulnerability within a family, a community, an organisation or a population they have degrees of dominance over.
It is a core behavioural psychology of all hierarchies of power and violence.
A reminder of policy presented as ‘help’ written for an Industry Lobby.
The use of people’s homes as underwriting care for elderly folk. 2017, T.May.
In that policy they placed the wealth of those homes into the hands of the care providers, without any mechanisms to guarantee high quality care by well paid professionals, thus the care industry would choose their own pricing regime, pegged to a statistical analysis of value of property, average length of care provision, lowest wages plausible, etc to maximise margin and profit.
The “debts” incurred by NHS trusts were created by Treasury cuts which Lansley, Hunt and Hancock all voted through without a murmur. The NHS budget had grown by 3% per annum until this point (Lansley) then frozen and then only belatedly increased by 1%. It is a miracle that the organisation has survived at all with the increase in the general population and of the upper age group in particular has expanded so much.
True…
Germany’s regional based health system seems to be in a far better state than ours. And guess what… it is semi-private. More private capital than the U.K. but less than the U.S., and with far bigger safety nets and benefits from being regionally organised. You are calling for ‘re-nationalisation’ – but what you’re basically saying is that at the end of this pandemic, systems need to be re-evaluated – and if we’re going for best practise, then surely the German system – more privatised than our current NHS – is the way forward? Any logical reasoner – which you claim to be ALLLLLLLLLLLLLLLLL the time – would surely agree with that?
You do realise markets have failed, everywhere, don’t you?
That literally, there is almost no functioning market left In anything but, maybe, food right now?
And that every market there now is exists solely because of stare support?
But you still write nonsense like this.
Why?
Renationlise OUR health service enshrine it into law so that no Tory /or other Government can leave it underfunded nor sell OUR health service to their highest bidders!
[…] government supposedly wrote off £13.4 billion of NHS debt yesterday. It didn't: as I have already pointed out, all it did was make a book-keeping adjustment. What it actually did was allow NHS Trusts to record […]
[…] government supposedly wrote off £13.4 billion of NHS debt yesterday. It didn't: as I have already pointed out, all it did was make a book-keeping adjustment. What it actually did was allow NHS Trusts to record […]
[…] Debt is a control, long used by banks of course, but for the last 40 years or so governments, so often influenced by, and even made up of bankers, have used the same technique: debt gives the creditor control — specious though it always is. […]
I’ve been trying to get my head around what Mr Hancock actually meant when he made his announcement yesterday…..thanks for your insights Richard. Clearly it is, as I feared, another smoke and mirrors attempt to save face…
SUrely it’s not in the government’s power to write of PFI debt?
What is not in its power at present?
Well, it would be an extraordinary measure for a Conservative government to cancel public debts to the private sector, even now. I can understand them “cancelling” some intra-government loans, which as you say is just book-keeping dressed up as action, but it’s hardly their style to bail out the public sector at the expense of the private…
I was presuming buying it in…..
Ah, ok, I see what you mean…
Thanks for interesting discussion exposing the governments stunt on so called NHS debt. In particular to old ally Richard with his insights. Covid 19 comes from intensive capitalist agricultural and food production. It is capitalism that has failed and as every day unfolds the need for a national, public, planned,, integrated NHS under democratic public control gets greater. Solidarity to NHS and all workers keeping society functioning