NHS leader calls for partnership with private sector to build new hospitals

The NHS must be given the green light to partner with private health firms and property developers to build new hospitals to slash the care backlog, a health service boss has said.

The last Labour government was widely criticised over controversial private finance initiative (PFI) deals to erect scores of new NHS facilities that led to vast profits for major corporations.

But in a major intervention the head of NHS Providers, Julian Hartley, has urged the next administration to relax Treasury rules that limit health service trusts in England from entering into such collaborations and insisted that the NHS has “nothing to fear” from them.

He said: “We need to think outside the box when it comes to solving this double whammy of under-strain public finances and an NHS estate in desperate need of renewal.

“Collaboration with public and private partners such as ethical pension funds, property developers, universities, private healthcare providers and local councils could unlock opportunities for NHS trusts keen to build new hospitals or redevelop existing sites which have been stymied by rigid Treasury rules.”

However, Dr John Puntis of Keep Our NHS Public said most people would find his suggestion “appalling” and that it constituted “a shocking attack on the founding principles of the NHS” as it prepares to mark the 76th birthday of its creation on Friday.

Hartley cited recent partnerships between NHS trusts in Birmingham and Surrey and private health providers to run newly built facilities, which treat NHS and fee-paying patients, as “successful examples of NHS and private sector collaboration. We can draw positive lessons that this is doable, that the NHS and the private sector can work together, and that it supports the interests of NHS services”.

“This doesn’t have to be PFI Two. This is not about privatisation of the NHS; this is about strengthening and supporting the NHS through investment that creates better facilities for patient,” Hartley added.

University Hospitals Birmingham (UHB) trust has been given operational control of 72 of the 122 beds in the Harborne private hospital on its site, which opened in January in a partnership between it and HCA, a large American healthcare firm which operates a network of private hospitals in the UK. UHB did not contribute towards the £100m cost of building the hospital, which provides cancer, cardiac and orthopaedic care, but has taken a lease on two of its eight floors for its own patients.

The extra beds will let people in Birmingham and Solihull get quicker treatment “in world-class facilities, delivered by leading NHS specialists” by cutting its waiting list, it has said.

In a similar move the Royal Surrey NHS trust and Genesis Cancer Care have entered into an arrangement to run a new dedicated cancer centre , which opened in Guildford, Surrey in March. The £30m facility is providing oncology and radiotherapy to NHS and private patients.

Hartley urged whoever are the chancellor and health secretary after the UK general election to “have an open mind” on NHS tie-ups involving major injections of capital from drug companies, pension funds and universities. The new government should see the new wave of hospitals that would ensue as a boost to the economy and a way of the public sector leveraging private sources of funding at a time when government spending is likely to remain tight, he said.

He wants the Treasury to review the Department of Health and Social Care’s capital departmental expenditure limit (CDEL), which restricts how much health trusts and the NHS overall can spend on capital projects, even if some of the money has come from external sources. The backlog of repairs needed across the NHS in England has ballooned in recent years to £11.6bn.

Keir Starmer and the shadow health secretary, Wes Streeting, have said that under a Labour government the NHS will use the private sector as much as it can to cut a backlog that has spiralled to 7.6m procedures. Acting on Hartley’s idea would risk angering those anxious about NHS privatisation.

Hartley highlighted that scores of NHS trusts were left unable to rebuild or replace sometimes dangerously decrepit facilities when, of the 100 that applied to join the New Hospitals Programme, the scheme to implement the pledge of the then prime minister, Boris Johnson, to build “40 new hospitals” by 2030, only 40 were given entry because numbers were capped.

David Hare, chief executive of the Independent Healthcare Providers Network, which represents private health providers, said: “There is huge appetite in the independent sector to partner with the NHS and bring much-needed new capital, capacity and capability to support better access to NHS services for patients free at the point of use.”

But David Rowland, director of the Centre for Health and the Public Interest thinktank, warned that NHS/private partnerships would “hasten a two-tier health system”. He accused Hartley of displaying “astonishing naivete” in his attitude to “the for-profit sector, particularly those with private equity backers”. Such firms are only interested in the NHS so they can “use the highly trained NHS workforce to treat those patients who can afford to pay privately and jump the queue.

“The last Labour government thought that getting into bed with the private sector to finance, build and operate NHS hospitals under the PFI programme would bring in investment and expertise. In reality it has led to huge amounts of money leaking out of the NHS in the form of profits and has saddled NHS Trusts with massive, crippling debt repayments.

“The mistakes from this fiasco should not be repeated.”