Brian Monteith: Claims NHS dying storm in teacup

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A storm in a teacup blew up this week about the future of Scotland’s NHS – and never has so much tosh been bandied about in so short a space of time.

It all came about because Philippa Whitford, a consultant surgeon at Crosshouse Hospital in Kilmarnock, gave a talk saying that within five years there would be no NHS in England – and that if Scotland votes No in the referendum this trend would be replicated here five years later.

Needless to say the YouTube version of the speech went viral as Nationalists told each other about it and whooped that this was some killer blow to the No campaign. Imagine the very idea that the NHS, the institution that helps define Great Britain so much it was used as part of the Olympic opening ceremony, might be no more? Only an independent Scotland could keep our NHS heart beating said the doctor, surely this must be the silver bullet Nationalists have fantasised about?

Only it’s not. For the idea just doesn’t stand up to scrutiny. It is scaremongering on stilts.

Dr Whitford’s theory is simple and on first glance makes logical sense – but it is deceptive because the detail that most people will not bother to research is fundamentally flawed.

The surgeon argues that as the NHS in England moves towards using private contractors to deliver more than half of its services by 2020, so it will no longer be worthy of the NHS name. She also then takes a leap to say that the funding of private contractors will no longer count as part of the public spending that feeds into the calculation of the Barnett formula, the method which helps determine the Scottish block grant – the money the Scottish Government receives from Westminster. This will mean a reduction in health spending in Scotland that must force a switch to private contractors here too.

It is a house built on sand. Dr Whitford is undoubtedly an expert on breast surgery but does not grasp the fundamentals of public finance or even NHS funding.

Firstly, we need to understand that using private contractors in the NHS is not new, nor is it an English phenomenon – we do it in Scotland all the time. We always have since the NHS was founded (under Labour, Conservatives and the SNP) and probably always will – that’s because our GPs are private contractors.

Yes, there is a salary agreement and a contract with the NHS, but GPs and their practices are essentially private contractors. They are not allowed to be limited companies in Scotland, but they are private, just as most dentists and practically all opticians are. The point of contact most Scots have with the NHS is with their GP, so that means most interaction the Scottish public has with the NHS is with the private sector. This does not make it any less free at the point of delivery – the key to the NHS – but Dr Whitford fails to understand this crucial point.

Secondly, when public spending in the English NHS is paid to private contractors (essentially companies formed by consultants like Dr Whitford) it still remains public spending. It comes from the public purse which is funded by public taxes – just like the money that goes to those other private contractors, the GPs. Therefore it will be included in the calculations using the Barnett formula.

More importantly though, there is a general misunderstanding by many people – including politicians, never mind doctors – who believe the Scottish block grant and the Barnett formula are the same thing – they are not. The block grant is the sum total of all calculations, while the formula is a process used to calculate the amount of funding that goes to the Scottish block grant when changes in English public spending are made. This may seem an esoteric point but it is key – for the formula was designed to bring the spending levels of Scotland and England together.

In 1979, Scotland was receiving 22 per cent more public spending per head than England so the Barnett formula was introduced to limit any share of spending increases to about 11 per cent – so over time the 22 per cent would reduce to single figures and then vanish. The doctor’s argument that English NHS practices applied to the Barnett formula must result in lower NHS spending in Scotland is irrelevant – if the formula is applied correctly there will be a squeeze on the Scottish block grant whatever happens in England – whether she is right about contractors or not.

The important point is that the Scottish Parliament can determine what to spend its money on and invariably decides to spend more on the NHS than England does – that’s what devolution is about, being different while remaining British. So even if Dr Whitford is correct about how the NHS works, what is happening in the English NHS and what the consequences of Barnett calculations are – and I believe she is wrong on all three – the devolved Scottish Parliament could decide its own spending and do as it pleases.

Indeed that’s what it does already.

So there is no silver bullet. There is just an NHS consultant who knows her field but misunderstands public finance. Move along now please.