The FT has reported today that:
The UK government should consider the use of private capital to fix the NHS's crumbling buildings and infrastructure, the head of England's health service has said.
NHS England chief executive Amanda Pritchard called for a more “radical” approach in a significant intervention as the service grapples with the highest maintenance backlog on record.
“We need to think much more radically, particularly about capital,” Pritchard told the BBC on Thursday. “I think we now must consider private capital investment in the NHS.”
I despair. A regular commentator on this blog named Andrew suggested only yesterday on a post on nationalising water:
It is always cheaper for the state to borrow for investment than for the private sector to borrow and then for the state to pay the private sector for use of the assets. It can only be otherwise if you have a dogmatic belief in the “efficiency” of the market. Go tell that to schools and hospitals burdened by PFI contracts.
But NHS leaders have been calling for capital investment from the private sector, because apparently there is not enough money available in the public sector (just like I've run out of inches to measure anything). But the borrowing will be more expensive and then the private sector will need a profit on top of that. How can the state pay for all of that, if it can't afford to borrow itself? We can't afford 4% but we can afford 8% plus a profit element? How does that work?
As Andrew very clearly knows, that does not work. And if there are funds available to the private sector to invest in hospital infrastructure, there are just as clearly funds available to the state to do so: there is no shortage of buyers for government bonds out there. Right now, they're being snapped up even though the effective interest rate on them is falling, as I noted here very recently. So, to claim that private money must be used makes no sense whatsoever. Cheaper public money is available.
In that case, why did Amanda Prichard say this? Does she not understand the three paragraphs that precede this one? If so, she is not fit to do her job.
Does she also not understand the history of PFI in the NHS? If so, she is not fit to do her job.
Or is it that she was put in place to call for private finance to suit the agenda of the private sector and Rachel Reeves, both of whom want to pretend that the private sector has all the answers whilst the state has none? Is she, in other words, a stooge for economic dogma and is not a civil servant at all, in the sense that she is not serving the public interest?
I really don't know, of course. I can say that the first two explanations appear unlikely. The third seems the most plausible. All of them are deeply unattractive. Whichever it is, I question whether she is the right person to be CEO of the NHS in England. It takes someone with a little more understanding of financial realities to do that job, I would suggest.
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Being more charitable you could instead suggest that they just fear the markets too much, and are beholden to using accounting tricks to avoid liabilities showing up.
However, that’s rather undermined by the change to removing infrastructure investment from the main target. That would have removed any call to use PFI for the reasons you’ve given.
I’m loathe to active malice where incompetence seems a more common real explanation. Either way, it seems RR has forgotten why she made the changes she already made.
Well Richard,
The simple answer is yes. Neoliberalism for dummies, chapter 7
Reduce/eliminate effective scrutiny by appointing industry lackeys to key positions in order to repeat the ‘private-sector = good’ mantra and get the plebs on board.
I dint profess any knowledge of accountancy or engineering.
BUT you dont need a PhD in the bleeding obvious to realise that we need to spend a certain amount of money each year on what I would call the ‘Public Estate’ Roads/Hospitals/Schools/Homes/Railways etc or they will deteriorate
Its a basic failure by successive governments, never mind ‘Infrastructure Investments’ we need to look after what we’ve got!
I do wonder if Streeting’s failure to address the disaster of Social Care is also a ploy to ensure that NHS hospitals become gummed up with people who are fit for discharge if they could be supported by social care, thus. making it “necessary” to fund the private sector to provide NHS care. The private sector thus grows – taking qualified staff from the NHS which is currently freezing recruitment / cutting staff to stay within their budgets.
If the money that is being spent into the private sector went towards social care instead (assuming you could stop the private providers from just using it to increase their profits) the NHS would be in a better place.
Thanks. Annoyed now that I mistyped PPI instead of PFI or PPP.
PFI doesn’t have to be bad and there are some successful projects. But in practice many PFI schemes have delivered expensive and inflexible services.
Would you like me to edit it?
Yes please. That would be grand. Thank you.
My reference to “running out of inches” was alluding to the point that there is not a fixed amount of money that can only be spent on one thing or another. There is not a vault in the basement of every bank (or even the Bank of England) that contains all of the gold they might lend out and which sets a fixed cap on their lending. The pound is how we measure cost and value and allocate resources. QE shows very clearly that the government can create new money to spend if it decides to do so. Lending banks do it all the time. Although there will be consequences that would need to me managed.
So the decision *not* to spend (when sufficient resources are available to buy, whether that is drugs or weapons or unemployed people) is not driven by any fundamental force of nature but rather by a political decision. The reason why the NHS or social care or other public services are in a parlous state is due to politicians taking series of political decisions. And it could be otherwise. If the people want it, and we elect politicians who could reach different political choices.
People in the US are going to find out rather quickly that things can also get very much worse.
Correct
Edit done in the article
Regarding Prichard – the following applies (in summary – she goes with the flow)
“We’ve been fundamentally overestimating the extent to which even very high IQ people actually have beliefs… The level of just outright trend following dominates everything.”
Overheard Washington/DOGE/Silicon Valley discussion
“So little trouble do men take in the search after truth, so readily do they accept whatever comes first to hand.”
Thucydides 1.20
I doubt she is a bad person – but it is clear, given what she said that she is not the right person to lead the NHS, but this comment could apply to a whole swathe of what passes for the Uk gov’ & its erm “civil” service.
Accepted
I think it was GBS – Shaw – who sid thinking was so hard most people only tried it once or twice a year.
Given the rates of pay these people are on, I have a more cynical view.
I base my view on the concept of financialisation of course, where it is common for people to be paid to think wrongly – for example how the bonus system encourages short-termism?
Pritchard’s pay leads to a certain type of lifestyle that leads to a certain type of thinking and morality and ‘awareness ‘ of what is going on. Imagine how comfortable her life is compared to someone on a bed in corridor in one of her hospitals.
We need to accept and then learn how to deal with the concept that people are today highly paid to be ignorant.
Otherwise, we are saying that Adolf Eichmann had a defence. Maybe some may find that an extreme view, but I take my instruction from no one else but Hannah Arendt on the banality of evil.
and Oscar Wilde said “that thinking is the most unhealthy thing in the world, and people die of it just as they die of any other disease. Fortunately, in England at any rate, thought is not catching.”
🙂
A more cynical take is that the private sector is invited in to ensure a seamless transition to a well-remuerated position when leaving public office. This way one can effectively ensure their own future salary funded from PFI-adjacent arrangements and suggests a good understanding of how the process works.
Yet none of these “bleeding obvious” facts will be presented to a minister by a journalist.
No minister will be asked to explain, live on air, how, if we “can’t afford” to spend £X on a bit of public infrastructure or a public service, that somehow, after some accounting sleight of hand, we CAN afford to pay £X+Y to a private provider to do the job (usually less effectively) for us because £Y is hidden in a different bit of the government accounts, usually somewhere in the future.
I wonder if we should stop protesting about government and march on the broadcasters & journalists instead?
“Tell us the truth about money!!”
“PPE=Piss Poor Economics!”
“PFI=Poisonous Future Indebtedness!”
“Journalists Do Your Job!!”
Agreed
“I wonder if we should stop protesting about government and march on the broadcasters & journalists instead?”
Hmm, that was tried recently. It didn’t end well. https://www.jonathan-cook.net/blog/2025-01-20/corbyn-smeared-protests-genocide/
Anyone who has kept a close eye on the antics of the Labour Party over the past decade would be aware of what was going to happen when this lot got into power.
Over 10 years ago The People’s Assembly were campaigning to get the government to invest more money in our public services . Corbyn spoke and led the charge which is why the people got him to
stand as the new leader of the Labour Party. The neoliberal MPs in the party spent more time fighting
against a socialist leader than fighting their opposition, the Tories. No wonder as their agendas were always the same. All those who
either resigned from the Labour Party once Starmer had slithered into power or who were suspended without any just cause, could have predicted this was going to happen
I won’t say I told you so. We have been fighting this cause for decades Richard. We know how our services can be funded and how easy it would be to implement . We might have had a glimmer of it under Gordon Brown but then there was the 2008 crash so maybe we can forgive him ?
It beggars belief that we still have to have this discussion. We have been running this experiment for 40 years and the result is Thames Water…. need I say more?
The only way privatisation of public services could make sense is with an onerous set of obligations and draconian penalties for failure to meet those obligations, coupled with a well-funded and powerful regulator (which is an extra public expense not usually included in the case for privatisation). Of course that would make the prospect completely unattractive to investors. It’s only by fudging these issues that governments can make private finance attractive to investors and accepted by the public. No doubt Reeves will be demonstrating such fudges in the near future.
I think the set of quotations below top off this specific blog, Richard, and many of the subsequent comments very nicely – as well as many of your blogs more generally.
Apologies for the length, but I think that’s justified, and the final paragraph in particular. For it must be clear to everyone in the UK by now that what that paragraph says applies in buckets to Labour under Starmer and co, even though Innes directs this argument at UK governments from 2010 until 2023. Thus, anyone who harbours even the slightest belief that we’re going to see any kind of turn away from hard -core neoliberalism is utterly deluded.
Furthermore – and this is crucial I think – there can surely be little doubt now that late-stage neoliberalism creates the conditions for the authoritarian turn that we’re seeing play out across the world. Consequently, the carnage that will follow the failure of the utopian dreams and fantasies of neoliberalisms cheerleaders and servants has, sadly, only just begun.
Anyway, those quotes:
‘In British neoliberalism the longer the mainstream parties persisted with the neoliberal project, the more they confronted the problems of political justification in the face of practical failures…In a still representative political system, chronic state failures, increasingly extreme social inequality and the steady loss of real investment and innovation should have prompted a sober debate within all parties about the integrity of the dominant orthodoxy, if not before the Global Financial Crisis then most certainly after it…’
‘The post-revolutionary Union of the Soviet Socialist Republics (USSR) had seen the utopian dreams of the ruling party fade as the regime confronted its own system failures and the reality of corruption and managed decline…’
[Yet] ‘It is the nature of the closed-system logic of the neoliberal utopia that it is precisely as total in its scope as its Soviet counterpart. The political pursuit of perfect allocative efficiency, whether through the free market or the socialist state, amounts to an equally unrealistic rejection of the challenges of time, space and meaningful individual subjectivity.’
‘In Britain today there are powerful corporate and financial interests who will oppose any such paradigm shift, and they depend upon late-stage neoliberal governments to prevent it for them…We can no longer, and most of us never could, afford a utopian politics in which kindness, cooperation, ecological respect and social justice are regarded as anti-system values. It follows that we have to rebuild the ideas of the social, and the public, as we review what it means to be a “realist” in a world on the edge of irreversible environmental collapse.’
Innes, A. (2023: 328, 329, 331, 390) Late Soviet Britain: Why Materialist Utopias Fail.
Thanks, Ivan
I refer you to your point on the Treasury/Bank of England joint Memorandum of Understanding, oh it all makes sense eh?
Yep. Just goes to show how a neoliberal political ideology and an entrenched private money knows best mindset will always trump basic arithmetic