“The expansion of private provision and marketisation has not strengthened the NHS. It has weakened it. It has diverted public money into private profit.”
Imran Hussain MP wrote a piece for the Socialist Campaign Group’s 2026 pamphlet ‘The Socialist Policies We Need’. You can read the pamphlet in full below.
Labour founded the NHS on the simple principle that healthcare should be available to everyone and allocated based on need, not the ability to pay. Decades of marketisation, outsourcing and privatisation have steadily undermined that key principle.
Fixing the NHS after years of Tory underinvestment and austerity will be a major challenge for the new Labour leadership. To meet it, it must make a decisive break with that approach and commit to restoring the NHS as a publicly provided, publicly owned, fully funded and free service, available to all on the basis of need.
The expansion of private provision and marketisation has not strengthened the NHS. It has weakened it. It has diverted public money into private profit, fragmented services, undermined workforce planning and fuelled the growth of a two-tier healthcare system. The market has failed the NHS, and Labour should have the confidence to say so.
The outsourcing of the delivery of cataract surgery to private companies offers an important example of the damage done.
Since the turn of the decade, the NHS has increasingly outsourced cataract surgery. Private firms now account for 60% of all such NHS-funded operations.
Research by the Centre for Health and the Public Interest shows these private health firms are making huge profit margins with around £1 in every £3 the NHS pays for cataract operations now leaking out in the form of private profit. That’s money that should be being invested in key health services.
Outsourcing also weakens the NHS itself. It removes training opportunities from NHS clinicians, draws expertise away from the public sector and distorts clinical priorities by allowing private providers to cherry-pick routine and profitable work while NHS hospitals are left with the most complex and costly cases.
The evidence simply does not support the argument that competition breeds efficiency. That narrative is a fallacy which must be challenged.
Private healthcare companies delivering NHS services are not partners of the NHS; they are competitors. Their responsibility is to maximise returns for shareholders, not to strengthen a public health service. Every contract handed to the private sector weakens the NHS’s own ability to provide care.
The experience of social care should serve as a warning. In 1979, 64 per cent of social care beds were publicly provided. By 2012, that figure had fallen to just 6 per cent. Contracting out has eroded the state’s capacity to deliver this essential public service. We must not allow the same process to continue within the NHS.
The increasing use of NHS hospitals to treat private patients must also be reversed. Since the Health and Social Care Act 2012 removed effective limits on private patient income, Foundation Trusts have increasingly expanded private activity.
This is not using “spare capacity” but NHS capacity that could help drive down waiting lists that remain above seven million and tackle the scandal of corridor care that is becoming commonplace.
Yet limited NHS capacity is now being used to justify further private expansion rather than rebuilding public provision. Labour should reject that logic entirely.
The same principle applies to NHS finance. Private Finance Initiatives (PFI) have burdened Trusts with huge repayments. In many cases, these exceed the amount being spent each year on medicines while locking hospitals into expensive and restrictive maintenance contracts.
The IPPR reported in 2019 that PFI was costing the NHS an “extortionate amount” and that “for just £13 billion of investment, the NHS has been landed with an £80 billion bill”. This is a rip-off of our public assets.
Research by We Own It in 2024 found that NHS Trusts in England with current PFI debt will have repaid, on average, almost eight times the initial capital invested through PFI. The Essex Partnership University NHS Foundation Trust faces a repayment ratio of 27 times the amount originally borrowed.
Instead of learning these lessons, the Starmer government planned to use private finance to fund the new network of community NHS clinics. If the Government really wants to cut out waste from our health system, then it must ditch plans for PFI 2.0.
More widely, Labour should also commit to removing market mechanisms and competition law from the NHS. NHS services should be publicly provided as the default, with no requirement for services to be put out to competitive tender. Healthcare is a public good, not a commodity to be bought and sold.
Perhaps no example of the role of giant private companies in our NHS will be more controversial for the new Prime Minister over the coming months than the case of Palantir.
In 2023, the Tory Government handed the US tech giant a £330 million contract for the NHS’s new Data Platform. The Financial Times has since reported that Palantir staff were given “unlimited access” to identifiable patient data. There are also serious concerns about the company’s record, from its work with ICE in the US to its support for Israel’s military operations in Gaza, while its co-founder once claimed that “the NHS makes people sick”. With growing opposition to Palantir’s role in the NHS, the new Government should exercise the 2027 break clause to end Palantir’s involvement in our NHS.
Rebuilding the NHS must be a key priority for the new Labour leadership. What we need to do is clear. We should end outsourcing, bring NHS services back into public ownership, remove market mechanisms and compulsory tendering, end private finance and ensure every pound of public money is invested in patient care rather than private profit.
- Imran Hussain is the MP for Bradford East. You can follow him on Facebook and X/Twitter.
- You can read the SCG pamphlet ‘The Socialist Policies We Need’ in full here. The foreword says that “We hope this contributes to a debate across the Labour Party, trade unions and the wider movement about the political programme needed to deliver the change people voted for, to build a better future for our communities and to prevent the rise of a Trump-style government here in Britain.“
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