Report from the Health Foundation explores the role of competition and ‘privatisation’ in the NHS in England

A new report published today (27 March 2015) by independent health care charity the Health Foundation reveals key facts about competition and ‘privatisation’ in the NHS in England. The report is launched on the same day Labour announces that, if they were to be in power after the next election, profits for all private sector contracts in the NHS worth more than £500k would be capped with a default level at 5%.

Last night, in the first of a series of televised debates with political leaders before the general election, Prime Minister David Cameron restated that charities or companies should be able to provide NHS care that is free at the point of use. The precise role of private sector organisations providing NHS-funded care is a dividing line for the political parties.

Key conclusions from the Health Foundation’s report include:

• There has been a steady increase in the proportion of NHS spending on clinical services provided by non-NHS providers. In 2013/14, £10.4bn was used to purchase care from non-NHS providers (excluding primary care), representing approximately 10.8% of total commissioner expenditure in England, based on 2014/15 prices.
• The most rapid increase in NHS spending on non-NHS providers has been for the provision of community health services. From 2009/10 to 2012/13, spending on independent sector provision of NHS community health services increased from £0.9bn to £1.8bn in real terms (2014/15 prices). This accounted for 18% of the total expenditure on community health services in 2012/13.
• As a proportion of total health expenditure, private health care spending is lower now that it has been over the last 15 years. In 2012, private spending made up 16.0% of overall health care spending - the lowest proportion in more than 15 years (equal with 2010).
• The relationship between competition between providers and the quality of clinical care for patients is still not clear. More evidence is needed before an objective robust conclusion can be made. However, the evidence for other complex health reforms, such as increasing integration of care, is also limited.
• The Health and Social Care Act 2012 did not introduce competition into the NHS, but it did signal a shift in its role. However, the Health and Social Care Act 2012 did not change the fundamental principle that the NHS operates as a comprehensive health service in England, and that services must be free of charge (with some exceptions, such as prescriptions).

Survey data from the British Social Attitudes (BSA) Survey 2014 revealed that 43% of those polled do not have a preference for whether their NHS-funded hospital care is provided by the NHS or another provider (eg private company or not-for-profit body such as a charity or social enterprise). 39% expressed an active preference for this care to be delivered by the NHS.

Emma Spencelayh, Senior Policy Fellow at the Health Foundation and the report author, comments: 'There is a lot of confusion over what competition and "privatisation" mean for the NHS. The portrayal of the debate in the media has focused on the extent to which the Health and Social Care Act 2012 has opened up the NHS to private provision, which plays into the public concern that the values of our health service could be eroded or that people might be required to pay for services.

'The debate around these issues needs to be far more informed and nuanced than at present. The political rhetoric seems focused on the term "privatisation" without exploring further what that really means. As one of the central issues in the run-up to the election, it’s important that all political parties are clear about what they mean and have evidence to support their claims.'

Today’s report is one of a series being released by the Health Foundation ahead of the general election, to inform the ongoing public debate on health care policy.

Media contact

Mike Findlay, Senior Media Manager
T: 020 7257 8047
E: mike.findlay@health.org.uk