Workers' Weekly On-Line
Volume 48 Number 4, February 24, 2018 ARCHIVE HOME JBCENTRE SUBSCRIBE

Collapse of Carillion and the NHS

Fight for the Alternative to this Profit-Making
Racket of Finance Capital in the NHS

The collapse of Carillion brought to the fore the scale of the involvement of the private sector and private monopoly interests in the public sector. In the NHS, the collapse of Carillion is rightly being seen as yet another exposure of the lie that the outsourcing of NHS services to the private sector is the key to efficiency and that private finance provides "value for the taxpayer" in delivering public services and its infrastructure. But the reality is that it reveals much more. It reveals the criminality of the wholesale outsourcing of hospital-building, maintenance and hospital support services. Gone is the control of these services by the public authority, and with it, any sense of public good, either to the staff employed or the NHS these services support. In its place is a profit-making racket of finance capital that monopolises all activities from the building of Private Finance Initiative (PFI) funded hospitals right down to the level of, for example, maintenance subcontracted by Carillion where hospital managers have reported being forced to pay £70 to change each light bulb and £20 to change single hand sanitiser or soap dispenser.

It is not as if the criminality of this outsourcing of NHS hospital building was not known at the outset. In 2005, an investigation by the National Audit Office into the Darent Valley Hospital, a 400-bed hospital in Dartford, Kent, completed in 2000, revealed the spectacular profits that were made under this first PFI hospital-building scheme [1]. A 60-year contract signed by the Darent Valley Hospital gave contractors a 75-year leasehold. If Dartford and Gravesham Hospital Trust walked away from this contract before the 35-year break point, these private-sector partners would retain the land and assets of the hospital for a further 40 years. Carillion invested £4.1 million in its share of the ownership of this first PFI hospital but its monopoly of the leasehold and huge payments for lease enabled it to sell its share three years later for £16 million in 2003. The audit office was forced to get involved because it had received a 50% "return" on its investment in 3 years raising "questions" about the PFI. Yet this corrupt activity of the system was swept under the carpet and was allowed to carry on under the then Labour government of Tony Blair, which was also launching its criminal invasion and occupation of Iraq. Carillion continued to be given lucrative PFI and outsourcing contracts in the NHS and other areas of public services for the years since.

More recently, Carillion was involved in the £350 million Midland Metropolitan Hospital in Sandwell, whose opening was originally scheduled for October 2018, but difficulties with the heating, lighting and ventilation systems forced a delay of the launch date to spring 2019. Carillion's subsidiary Clinicenta had a contract to run a treatment centre at Lister Hospital in Stevenage, which was terminated in 2013 after the Care Quality Commission found the unit was not meeting minimum standards. The new 646-bed £335 million Royal Liverpool Hospital was due to be finished by March 2017, but the completion date has been repeatedly pushed back according to reports because of cracks in the building.

Today, in its outsourcing of maintenance and hospital support services, Carillion at the time of its collapse employed around 8,000 staff in 14 hospital trusts. All of these jobs have been put into jeopardy or further sold on to another private provider. For example, Carillion provided car park management, switchboard, cleaning, portering, and security at James Cook University Hospital in Middlesbrough, on behalf of South Tees NHS Foundation Trust. According to reports, Serco and other outsourcing firms are now in talks to bid for the James Cook Hospital contract that affects around 900 workers.

Carillion was also the facility management company for Tees, Esk and Wear Valley Mental Health Trust's Roseberry Park, which recently hit headlines due to serious defects at the hospital. Three Valleys Health is the PFI company that included Carillion and was responsible for the hospital. Andy McDonald, MP for the town, pointed out on his website [2]: "I was completely dismayed at the failures to meet anything like acceptable construction standards. The list of defects in a brand new hospital from defective roofs to plumbing problems and much, much more besides is as long as your arm. The main construction contractor's dreadful record reveals an almost cavalier attitude to proper construction standards and more worryingly to safety and security. It will cost a fortune to put this right. Three Valleys Health is the PFI company that ultimately bears responsibility for the appalling work in the building of this key mental health facility... The building contractor Laing O'Rourke should be utterly ashamed of themselves for such shoddy workmanship, as should the facility management company Carillion... how any of this work was ever passed as satisfactory is beyond me."

An Audit office report [3] released just prior to the collapse of Carillion lists the obscene profits that "the Private Finance Initiative (PFI) and the introduction of PF2" rips off for these monopolies. It pointed out that "there are currently over 700 operational PFI and PF2 deals, with a capital value of around £60 billion. Annual charges for these deals amounted to £10.3 billion in 2016-17. Even if no new deals are entered into, future charges which continue until the 2040s amount to £199 billion."

Health workers, and indeed people at every level in society, have long demanded the end of the outsourcing of NHS services and an end to so-called public-private partnerships such as PFI. Infrastructure necessary for the general interests of society in providing healthcare should not be used to enrich powerful monopolies such as Carillion. The right of health workers and the people to have direct involvement in the control of the healthcare system and its infrastructure should be fought for as the alternative to this profit-making racket of finance capital and all the criminal anti-social and pro-war actions such a system unleashes on the population of Britain and the world.





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