Treasury opens up NHS hospitals to private firms: Ceiling on commercial projects raised from pounds 250,000 to pounds 10m

COMMERCIAL operators could be running NHS day surgery centres and other hospital units within three years after Treasury limits on private financing of state health services were relaxed yesterday.

The Government raised the threshold for Whitehall approval of specific NHS capital contracts with private companies from pounds 250,000 to pounds 10m per project. Labour accused ministers of unleashing 'a new privatisation onslaught' that could diminish the role of the NHS to that of a regulator of a wholly private healthcare market.

The initiative, disclosed in the Independent earlier this month, was outlined yesterday by Tom Sackville, Under-Secretary of State for Health, at a seminar in London organised by the Social Market Foundation, an independent think-tank.

Ministers are keen to encourage schemes such as the privately run kidney dialysis service bought in by the Sheffield Northern General NHS Trust last year and the consortium formed by health authorities and a commercial incineration service in Oldham, Lancashire, to provide waste disposal services to several hospitals. The initiative should pave the way for more hospitals to lease expensive equipment such as scanners.

The Department of Health also wants to build on ad hoc deals made over the past two years with private companies to help cut waiting lists.

Mr Sackville said: 'There is no reason in principle why the NHS should not make longer-term arrangements with private healthcare companies. It is for local managers to decide if this is the most cost-effective way of providing services.'

At present, the private sector finances only a fraction of NHS activity. John Major told the Conservative Party conference in 1991 that there would be 'no charges for hospital treatment, for visits to the doctor, no privatisation of health care . . . ever while I am Prime Minister'.

However, critics of the Government say more people are being forced to use private health services because of restrictions on the NHS caused by underfunding. Government figures released this week showed that the number of NHS pay beds rose by nearly one-quarter from 2,405 to 2,956 between 1979 and 1991.

David Blunkett, Labour's health spokesman, said: 'The NHS . . . should not be turned into a new regulatory body, a sort of 'Ofsick' for health care.'