Redwood set to approve private unit for NHS: Finance, construction and operation avoid need for public-sector capital

JOHN REDWOOD, Secretary of State for Wales, is poised to approve the first contract for the private sector to build, finance and operate a unit for the National Health Service.

The first all-private NHS unit would be built at the Morriston, Hospital, Swansea, to provide 600 open-heart operations a year together with a complete cardiology service for hundreds of outpatients.

The unit, if it goes to the private sector, would be the first step towards a model of the NHS which could one day see it continuing to buy care on behalf of the public, but with much of its provision coming from the private sector.

Four bids to build and run the unit, which has an estimated capital cost in the region of pounds 6m to pounds 10m, and which will provide millions of pounds worth of treatment a year, have been evaluated and forwarded to the Welsh Office for a decision.

Mr Redwood, former head of Baroness Thatcher's Downing Street policy unit, who once wrote a pamphlet advocating changes to the NHS which would turn it into an insurance-based system purchasing care from independently run hospitals, is expected to make the final decision this autumn.

The bids are understood to have been made by: the Morriston NHS Trust itself; Bupa Hospitals, Britain's biggest private hospital operator; another British-based private hospital group, and a joint approach from a London NHS Trust in partnership with a private hospital group which would provide the capital.

The Welsh Office yesterday would only formally confirm that the tenders were in for consideration, but sources said the bids were evenly matched and the choice between them would be 'tight'. NHS sources in Wales expect Mr Redwood to approve one of the private-sector bids.

Private groups such as Bioplan have built small units in joint ventures with the NHS which have provided a mix of NHS and private treatment. The Morriston venture, if it went to the private sector, would be on a completely different scale, with the NHS in effect buying an entire clinical service and building from the private sector, avoiding the need for public sector capital.

News of the Morriston bid came as Virginia Bottomley, Secretary of State for Health, dismissed as 'monstrous fiction' and 'summer scaremongering' claims by David Blunkett, Labour's health spokesman, that her junior minister, Tom Sackville, has held talks with a United States healthcare firm as a prelude to 'selling off' profitable parts of the NHS.

Mr Blunkett, however, said that Mr Redwood's 'Welsh auction' was 'a further clear sign that the Government is selling the NHS off in parts. The Government must tell us how much more of the NHS is up for sale'.