MPs voice concerns over Javid’s £1bn private hospitals ministerial direction

Health secretary signs off on £90m-a-month plans to put sector on standby to provide backup for NHS services
NHS chief exec Amanda Pritchard (right) wrote to Sajid Javid requesting the ministerial direction. Photo: PA Images/Alamy Stock Photo

By Jim Dunton

13 Jan 2022

Health secretary Sajid Javid has issued a written ministerial direction authorising plans to put private hospitals on standby to support NHS services at risk of being overwhelmed by the Omicron variant of Covid-19 – at a cost of between £75m and £90m a month.

Members of parliament’s Public Accounts Committee voiced concerns about the move after details of NHS England chief executive Amanda Pritchard’s request for the direction were published yesterday.

Pritchard said the plans offer private-sector institutions a minimum income guarantee based on work levels from last year, but noted that any surge arrangements could make services “significantly more expensive”.

She said the cost under such circumstances could be around £175m a month and questioned private sector providers' ability to offer seven-days-a-week staffed bed capacity. Pritchard said there were elements of the proposals that carried value-for-money risks in the light of the Treasury’s Managing Public Money guidance for accounting officers.

In his direction letter, dated 7 January, Javid acknowledged Pritchard’s concerns but said the need to protect NHS services and prevent a further reduction in NHS capacity were “compelling reasons” to justify the measures.

At yesterday’s PAC session probing the government’s work on risk in light of the Covid-19 pandemic, committee chair Dame Meg Hillier asked Department of Health and Social Care permanent secretary Sir Chris Wormald why better surge-capacity plans were not in place, two years into the pandemic.

“Surely by now we’d’ve got into a better place of negotiation to make sure that we could deliver that surge capacity at a lower cost to the taxpayer?” she said.

Wormald said that providing continuous surge capacity could be even more expensive than the arrangements outlined by Pritchard.

PAC member Sir Geoffrey Clifton-Brown noted that the estimated cost of the deal added up to £1bn a year before a single service had been given by the private sector. “Sounds like a very expensive insurance policy, doesn’t it?” he remarked to Wormald.

The perm sec agreed, but said the estimated price needed to be put in context.

“When compared to the costs that the economy and society have been asked to pay over the period of Covid, it’s a very small amount indeed,” he said.

“It is, of course a significant sum of money, but you correctly identify it as an insurance payment and the costs of insurance not paying off are colossal, and not just in monetary terms.”

Wormald said that “very frequently” the private healthcare sector was better for so-called elective care – such as routine surgery for hip replacements – than for emergency care.

“Therefore, the best way to use it is to take pressure off your classic acute hospital, protect more elective capacity, and both keep the backlog down and free up more NHS resources for stuff that only they can do, which tends to be the high-end emergency care,” he said.

Hillier said her committee would investigate the issues raised by Pritchard in more detail with NHS England.

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