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Year 2000 No. 198, November 21, 2000 Archive Search Home Page

Further Exposure of the NHS Plan

Workers' Daily Internet Edition : Article Index :

Further Exposure of the NHS Plan

Seventh Round of Strikes Against a PFI Staff Transfer in Dudley Group of Hospitals

Private Finance Initiative Regional Conference

Strikes in Ireland Gather Pace

Yugoslavia News:
US to Tie Aid to Co-operation with UN Tribunal
Yugolsavia Restores Ties with Four NATO States

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Further Exposure of the NHS Plan

According to Tony Blair, the NHS Plan is "designed to deliver a patient centred service".

As both Tony Blair and Alan Milburn, the Health Secretary, talk till they are blue in the face on the steps the government is taking to bring this "patient-centred service" about, the scope of PFI is being extended and the NHS is making deals with the private health care sector.

In this WDIE, we publish comments made at the West Midlands UNISON conference on PFI which thoroughly expose the motives behind PFI and its effects.

How much the NHS Plan holds water can also be gauged by the recent statement of the chairman of the British Medical Association. Dr Ian Bogle said that there will not be enough GPs to guarantee every patient an appointment within 48 hours by 2004, as the plan requires, nor to provide the intermediate care needed to free hospital beds. "On the timescale envisaged, the plan is not deliverable," he said. "There is no way we are going to get enough GPs, or anything like it."

He continued, "Our guess is that the number of GPs would need to increase by a third – say 10,000 extra doctors – to make it possible. The plan promises an extra 2,000 by 2004, and even that may turn out to be impossible to achieve."

Neither do the facts square with the claim of designing a "patient-centred" service, nor do the plans of the government to meet its targets add up.

Which direction is the NHS headed in? The conclusion is becoming inescapable that it is being made a source of private gain, and that the right of everyone to health care is not being recognised in the real world.

The demand to increase investments in social programmes and to stop paying the rich is the call to which all concerned about the future of the NHS must rally round.

Article Index

Seventh Round of Rtrikes Against a PFI Staff Transfer in Dudley Group of Hospitals

UNISON members at Dudley Group of Hospitals have taken 42 days of strike action to stay in the NHS. This is the longest running hospital strike action in the history of the NHS. Further strike action and activities are taking place as listed below.

Mark New and Angela Thompson, the UNISON, Dudley Group of Hospitals, Branch Secretaries, have announced that the Branch is planning other activities throughout the two weeks including rallies at each site. It is also calling for UNISON to hold a national day of action in support of Dudley on December 20.

Article Index



The UNISON West Midlands Region conference on PFI was held on the morning of November 4. It was followed by a demonstration of the Dudley hospital workers’ campaign against PFI in the NHS. WDIE is printing below a summary of some of the remarks made at the conference.


Valerie Bloom, UNISON Regional Secretary, in her opening remarks said that the people of the area have made clear their position on the health service – they want NHS staff to run NHS hospitals.

David Price from the School of Public Policy, Northumberland, provided valuable information on PFI and the political and economic forces driving it. David Price is part of Allison Pollock’s team providing on-going research into PFI. He advises the Commons Health Select Committee and has just produced a report on Worcester PFI hospital development.

David Price said that people are making comments about Britain being a banana republic with the railways and trains not working, What they do not realise is that soon under PFI the hospitals will not be working. He and his colleagues had been to London to find the head office of the PFI consortium building Worcester Hospital, and found not the grand plush offices they expected, but a letter drop. These consortiums are merely a vehicle for transferring public assets to the private sector.

PFI is not a technical issue about methods of financing but a deeply political issue, and it must be challenged at a political level. In the NHS plan, Alan Milburn proclaims the new wave of PFI projects as the largest ever investment in new hospitals. What he does not say is that it is funded out of the largest hospital closure programme ever.

The new report on the Worcester PFI had just been produced. For many years Worcester had been trying to get funding for much needed development. Prior to the PFI project, the Trust was £9 million in deficit. They were told that a £50 million PFI investment would not only provide a new hospital but also reduce the deficit through increased efficiency and reduced operating costs. One third of Health Authorities and Trusts are at this time in deficit across the country.

The cost of the Worcester PFI build once finalised had risen from £50m to £116m. Between the planning and the outline business case, the costs had risen 115%. Every PFI hospital build has experienced this cost escalation, the average rise being 72%. Worcester involved a highly complicated financial package with a series of financial checks and assessments. This process alone cost £30m.

The government has put in £7m to enable the deal to go ahead, but this too will have to be paid for by the local health service through further increased annual payments for the use of the buildings. Whereas the Trust pays £5m now for its buildings it will be paying £9.4m, nearly double, under the PFI scheme.

There are three principal ways by which costs are kept down or paid:

· Keep costs down by giving land or buildings in exchange – the Edinburgh Royal Infirmary, a beautiful hospital in the city centre, was given to the PFI consortium there.

· Increase income through private patients, but that is not very effective.

· Cut costs through staff cuts. In every single PFI build there has been a major reduction in staff numbers. Worcester involved a 31% cut in ancillary staff, 17% in nursing staff and around 10% in some other groups.

But still this is not enough, so they are taking income from other parts of the NHS. They have closed Kidderminster Hospital. Kidderminster was not involved in the original deal in 1996; it was not within the Worcester area. But by 1997 when the true costs of the deal were known suddenly Kidderminster Hospital became "unsatisfactory" and due for closure.

The result for clinical care has been a cut in beds – 12% of acute in-patient beds. There is a national average 30% cut in beds for all PFI builds. Worcester will be left with only 40% of the national average of acute beds. Many people will simply not get into hospital, especially old people. Money will be sucked out of primary care.

The Government does not like the information we have been putting into the public arena on the bed cuts involved in PFI. The National Beds Survey has said there are 4,000 too few beds. What is happening with PFI contradicts the Government’s own needs assessment.

The political drive

The annual fee to the private sector – where does the hospital get the revenue to spend on this?

The NHS was initially given the money and the buildings to run its services. In 1992 this changed. The then Conservative government introduced capital charges with Trusts having to pay 6% on their assets. The concept is that the government represents the "investors" and the hospitals the "companies" paying the government a return on its investment. This was intended to be the funding source. The objective of the Tory government was to give the private sector access to NHS funds. This was a lever to tap in to the enormous funding streams from public taxation. The logic is to privatise staff, services and to give private enterprise the chance to cash in on public funds.

This is actually the policy of the World Bank and IMF. Little is said about the international co-ordination of policy. The policy is to reduce the public sector and increase the private sector. It is often led by the developed countries and imposed on the developing world. It is heavily backed by the European Union and the United States. One of the main health care providers in the US has recently gone bankrupt. In the US, 50 million people do not get health insurance because they are too poor. The US health industries have only one way to increase their profits and ensure their survival – to export their industry. They have already gone through Latin America privatising and taking over, and are now looking to Europe to export US health care.

The question we have to put is whether this Government is or is not the natural ally of the labour movement?

From the floor many delegates really appreciated the clarity of this analysis and that the speaker explained the global context of PFI strategy. In answer to questions raised David Price made some further points:

On PFI affecting local authorities – a difference between local authorities and the NHS is that they charge for services so they can reduce their expenditure that way. It is significant that the section in the government’s NHS plan setting out its principles does not include all NHS services are free, unlike the Beveridge report on which the NHS was founded.

The government is compiling an asset register for local authorities, rather like the Doomsday Book.

The "financial prudence" regime requires a limit to borrowing. if one includes all PFI projects in borrowing this would still not exceed this. So it is not just an issue of lack of public funds. The government are insisting that staff are privatised – for example, at one school privatisation project in Stoke the parents and school did not want the ancillary workers like dinner ladies included but the government said they had to.

The NHS could be considered a machine for wealth re-distribution because poor and rich alike get the same treatment. However, internationally the drive is to reduce such redistribution of wealth.

Margie Jaffe, UNISON National Policy and Research Officer, spoke of the research carried out by UNISON into the effects of PFI. The Government, she said, has been forced to accept now that PFI hospital builds have led to massive loss of beds. She said that the logic used to justify PFI is one of "greater efficiency" because the same private interests will be running the hospitals as built it. But disastrous problems have hit newly opened buildings. For example, when Cumberland Infirmary PFI hospital opened, two ceilings collapsed. They had used leaking plastic joints in the plumbing. A window that fell in narrowly missed a patient. The sewage system, built to inadequate capacity, flooded into clinical areas. A special trolley had to be designed because standard trolleys would not fit in the space between the bed and wall. In Dartford, when the brand new hospital opened, the operations had to be cancelled because only a trickle of water came from the taps.

Margie Jaffe said she had heard Andrew Smith, Chief Secretary to the Treasury, say that private companies are entitled to their profits. But look at the level of profit – The Sky Bridge build on PFI is making 20% return on investment, charging tolls. Some hospital PFIs are making a 18.5% return, Gravesend and Dartford is making 15% return.

Re-financing is now massively increasing profit rate. After the building phase is complete much of the risk is over and the corporations re-finance getting a far better rate. One PFI school saved 44% on the cost of borrowing after the build was finished. Group 4 have increased their expected profit by 75%, with a rate of return of 39%.

The effect on the work force of PFI, Compulsory Competitive Tendering and Market Testing is a major concern:

Private prisons make 10% savings in running costs – Securicor pay prison officers £14,000, Public Sector POs are paid £20,000.

TUPE protects existing public service staff but we are concerned for new staff, she said. UNISON surveyed local authorities and found 90% of their privatised services paid new staff less, and one in five were working more hours. In some services, staff are on five different sets of conditions.


Angela Thompson, Branch Secretary (joint), Dudley Group Hospitals, is a catering worker in Dudley group Hospitals. She has been a steward since 1997. She said that the 600 members on strike are still 95% solid. Their stand is they will accept nothing less than staying in the NHS and are not interested in any compromise on this.

In 1995, she said, we first became aware that they would use PFI. In the early days we said how isolated we felt. There is nothing like having someone come and explain to you directly what PFI means. We had no idea what was ahead then. Support staff are part of the NHS team and we all work closely together. The NHS is dear to our hearts. Private contracts break up the team.

Article Index

Strikes in Ireland Gather Pace

Throughout the twenty-six counties of the Irish Republic, actions by workers to protect or enhance their rights and living standards have been taken place over the last week.

Secondary school teachers

Secondary school teachers of the Association Secondary Teachers of Ireland (ASTI) began their campaign on Tuesday, November 14, with a one day strike. On Thursday, November 16, their action continued with a work to rule, which effectively closed most secondary schools. The union had submitted a claim to bring their wage level to a rate which would go some way towards recognising the work and service they deliver to the society. This claim went to the Irish government’s own arbitration body, which the government had used to sideline the demands of the teachers as far back as last March.

The teachers recognise that their wage levels have dropped to the stage where they are receiving IR 8,000 less on average per year than graduates in other sectors of the economy. The government and employers’ organisations have been insisting that there will be no pay increases outside the "social partnership" deal, the PPF (Programme for Prosperity and Fairness). The government has tried to pressurise the ASTI to stop their actions stating that they should join the "review body" to examine public sector pay issues. However, this policy has become somewhat unstuck with the Teachers Union of Ireland (TUI) voting to take action to secure a 20% rise above the increase contained in the PPF. The primary school teachers, who are members of the Irish National Teachers Organisation (INTO), have said they will "take to the streets" also if the government does not solve their problem of low pay.

Aer Lingus workers

Aer Lingus catering workers staged a one-day strike on Wednesday, November 15, after they voted to reject management proposals on pay and productivity. Their trade union stated that in view of the increase in productivity which the workers were expected to concede to, which would result in a saving of IR 1million for the company, the pay on offer was certainly not enough to justify accepting the deal.

Dock workers

Dublin dock workers have been on strike for six weeks after their employers, the Mersey Docks and Harbour Board (MDHB) locked them out over nine weeks ago. The MDHB is notorious for the manner in which it treated the Liverpool dockers after the British government allowed the company to take over the port several years ago. Shortly after their "no warning" arrival in Dublin earlier this year, the Board initiated confrontation by trying to impose "non-negotiable" conditions which included the abolition of the weekly bonus scheme and the capping of earnings, resulting in a drop in annual wages of IR 10,000. When the workers’ trade union SIPTU rejected the measures, the MDHB issued temporary lay off notices.


Mineworkers at Tara Mines in County Meath began a strike on Friday. Some 240 underground workers set up pickets outside the mine. The mineworkers are reacting to the management’s failure to recruit more workers as agreed in a productivity deal worked out two years ago. A spokesman for SIPTU said that the strike would continue until the dispute was resolved. He added that the company had failed to meet its obligations under an agreement which had been thought to have removed the threat of closure hanging over the mine.

Other actions

Other workers’ actions last week included a one-day strike on Tuesday by signal persons employed by Iarnród Éireann (Irish Rail). The rail workers are demanding a decent rate of pay to take them out of the low pay category in the context of their working hours changing due to introduction of the Working Time Act. DART drivers struck on Monday, November 20, the first of a series of one-day stoppages.

Ryanair pilots are to hold a 24-hour strike on Friday. The strike, which will begin from midnight on Thursday, is expected to ground most flights from Dublin and Shannon. The dispute is over Ryanair’s attempt to unilaterally impose increased working hours. Pilots are already working at the limits of their legal hours, yet the company wants to abolish a 1994 agreement and impose longer hours.

Ireland Correspondent

Article Index

Yugoslavia News:

US to Tie Aid to Co-operation with UN Tribunal

On November 16, Radio Free Europe reported: "US Balkan envoy James O'Brien said in Belgrade on November 15 that Washington will require Yugoslavia to cooperate with the UN war crimes tribunal at The Hague in order for it to receive US assistance, Reuters reported. O'Brien said US President Bill Clinton has earmarked some $100 million to Yugoslavia aimed at consolidating democracy. He said the first part of that sum would be granted without conditions, but that starting on April 1, 2001, there 'will be some legally required conditions on our assistance.' O'Brien said that in addition to co-operation with The Hague, Belgrade is expected to support the Dayton accords in Bosnia and to implement policies establishing the rule of law.

"O'Brien said that Croatia has been bold in co-operating with the war crimes tribunal and that the US expects Yugoslavia to do the same. He added that bilateral diplomatic relations between the US and Yugoslavia will be established soon."

A related news item published by the UN says that "in a step that will mark a new stage in the relations between the International Criminal Tribunal for the former Yugoslavia (ICTY) and the Federal Republic of Yugoslavia, the ICTY Prosecutor is planning to visit Belgrade soon, the court said today". The item continues: "Prosecutor Carla Del Ponte has applied for a visa to visit Belgrade to re-open the Prosecutor's office there, possibly before the end of this year, ICTY spokesperson Florence Hartmann told reporters in The Hague. She said the Office of the Prosecutor had made its first official contact with the new Yugoslav authorities yesterday. Ms. Hartmann underscored that far from being a routine trip, the visit would signify the beginning of the normalisation of relations between the Tribunal and the Federal Republic of Yugoslavia. She noted that there had been no real relations between the ICTY and Belgrade during the Milosevic regime."

For his part Vojislav Kostunica, the new Yugoslav leader, repeated his view that the UN war crimes tribunal in The Hague is not the only place for suspects to be tried. He said, "Milosevic is in responsible for many things, but he is most responsible before his people."

Meanwhile, the economic situation is going from bad to worse, and President Kostunica told the European parliament on November 15 that the survival of Yugoslavia’s people this winter is a higher priority than prosecuting Milosevic for alleged war crimes.

Yugolsavia Restores Ties with Four NATO States

Yugoslavia on November 17 restored diplomatic relations with the US, Britain, France and Germany, some 20 months after ties were broken at the start of NATO’s 11-week bombing campaign against the country beginning last March.

David Landsman, Britain’s newly-appointed Chargé d’Affaires in Belgrade made a statement welcoming the move, saying, "Britain is ready to … support Yugoslavia’s return to its rightful place in Europe."

The Yugoslav President Vojislav Kostunica, speaking to the European Parliament on November 15, said that Yugoslavia wants to join the EU, but that its eventual membership would depend on reconstruction in the Balkan region as a whole. He said, "We are aware that none of the Balkan countries will be able to join the EU on their own, which makes it clear we have to develop good neighbourly relations, free trade and collective security structures first."

On November 1, Yugoslavia was re-admitted to the United Nations after eight years of its exclusion. On November 8, Yugoslavia rejoined the Organisation for Security and Co-operation in Europe (OSCE), and the following day President Kostunica addressed the Council of Europe.

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