Dorrell poised to unveil 'private' NHS hospitals

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The Independent Online

Public Policy Editor

The first schemes in which the private sector will design, build, finance and operate entire hospitals for the NHS are to be announced shortly - probably in the Budget - despite a renewed Labour charge that the Government is progressively privatising the NHS.

But in a keynote speech, in which he is expected to underline that private finance is to be the dominant way that new NHS facilities are built, Stephen Dorrell, the Secretary of State for Health, is expected to set limits to the exercise.

In his address to the Royal College of Physicians next week, Mr Dorrell will say that core clinical services - broadly those provided by doctors and nurses - will not be included in the new schemes.

Some clinical support services which involve doctors - pathology and radiology - will form part of the early private finance deals in the NHS, which include a pounds 100m 700-bed redevelopment of the Norfolk and Norwich hospital, a pounds 20m 150-bed unit at St James's hospital, Leeds, a pounds 26m scheme for a new acute hospital at Bishop Auckland in County Durham, and a pounds 16m redevelopment at two sites in south Buckinghamshire.

But with few private bidders showing any interest in supplying full clinical services, Mr Dorrell is to make a virtue of reality and rule out complete private provision of an NHS hospital for the time being.

His aim is to defuse renewed Labour charges that "core" hospital services are being privatised, with Alan Milburn, Labour's new health spokesman, yesterday listing 34 contracts under which services have been taken away from NHS provision and handed over to private companies.

The deals include pathology at the Leicestershire Mental Health Trust, some forms of radiology at Oldham and Park hospitals and opthalmology in south Devon. The private sector has also won six contracts for sterile supplies, six for limb fitting, four for occupational health and six for patient appliances. A big new deal involving private provision of pathology for hospitals in north London is also thought to be near completion.

"Bit by bit, the health service is being handed over to the private sector," Mr Milburn said. "Yesterday it was portering, today it is pathology and tomorrow it will be paediatrics."

The limit Mr Dorrell will set will still leave the private sector providing, financing and running entire buildings - everything except mainstream treatment - providing all the back-up services from laundry and cleaning to building maintenance and security, together with a range of other functions.

Kingsley Manning, managing director of Newchurch, which runs a private finance database for the NHS Executive, said an "explosion" of private building was about to occur, with the likelihood that pounds 2bn worth of schemes would be in the pipeline by the time of the next general election.