NHS professionals – playing doctors and nurses

By Chris Cook

The ‘Financial Times’ reported on Friday that NHS Professionals Ltd – which provides ‘banks’ of nurses, doctors and other staff willing and able to work flexible hours – is in the process of being prepared for privatisation. This is ironic because, as the FT says (my bold)….

‘NHS Professionals, which supplies 50,000 nurses for shifts at public sector health trusts, was set up by the former Labour government to prevent the NHS being overcharged by private staffing agencies.’

Although NHS Professionals Ltd has been heavily loss-making over its six year period of development, it has recently brought in management from the private sector, and has invested heavily in IT. The result is that the Company – the conversion to a Limited Company took place earlier this year in preparation for privatisation – expects to be profitable in the near future.

Indeed, as the CEO of NHS Professionals Ltd says, there is a great deal of opportunity for growth if their eighty or so ‘partners’ (ie client NHS Trusts) are joined by many more Trusts who are aiming to cut costs either through replacing use of private agency staff, or through outsourcing management of existing ‘banks’ of nurses and doctors currently maintained ‘in-house’.

So NHS Professionals Ltd is now – in a combination of pure ideology and the financial short-termism which is the curse of the UK – about to be sold off either to Private Equity investors, or to a private sector outsourcing firm.

Enter the Big Society

As I have been saying on Labour List for some time, I believe that the Big Society – perhaps better termed by Compass as the ‘Good Society’ – is the greatest political opportunity for the membership of Labour and the Unions in the last 100 years.

That is because it is possible – as the most radical left wing members of the most radical left wing union demonstrated at Tower Colliery in Wales – for those who work in an enterprise to take ownership of it: in the case of Tower Colliery this was through buying shares using their redundancy money. In fact, the government is vigorously encouraging public sector staff to form ‘social enterprises’ and to take over the running of public services, at least in those low margin areas which the private sector is not eager to pillage.

So a ‘John Lewis’ solution – whereby the shares in NHS Professionals Ltd would be owned in trust for the staff and management – could be a splendid idea. At least it would be if this government were motivated by the same noble motives and values as was John Spedan Lewis.

Unfortunately the government is motivated by a mixture of misconceived ideology and short term expediency, but to be fair – bearing in mind the massive investment in IT, business development and other infrastructure which has been funded by the tax-payer – it would be perfectly reasonable to expect the staff to bid for the assets of the business alongside other interested parties, and thereby repay the public investment.

But how could such a bid be funded? Could the staff really afford to outbid the private sector?

I believe that they can, because they may harness what the Co-operative movement calls the Co-operative Advantage, which is the freedom from having to pay fat returns to shareholders either to the inaptly named Private Equity investors (there’s nothing equitable about the way these investors operate), or to the shareholders of banks providing interest-bearing credit on increasingly onerous terms, if it’s available at all.

The conventional Co-operative approach is to set up a genetically modified Company in order to raise capital from ethical investors, and to then borrow from banks in the normal way. But I doubt whether the staff could compete with private equity buyers using such a conventional Co-operative enterprise model.

As has been said, 21st century problems cannot be solved by 20th century solutions, and I believe that imaginative use of a partnership framework agreement opens up new possibilities for investment by stakeholders in a NHS Staff Pool utility.

NHS Pool

The NHS Pool of staff would not be an Organisation: it would not own anything; do anything; contract with anyone or employ anyone. It would simply be an agreement – within a ‘Master Partnership’ Limited Liability Partnership (LLP) entity – between a co-operative consortium of staff (initially the existing NHS Professionals Ltd); a co-operative consortium of client Trusts; and a co-operative consortium of investors of money, or money’s worth’ of technology, software, premises and so on.

The client Trusts would agree a suitable charge for the provision of the NHS Pool service, and the revenues from this would then be shared proportionally between the staff consortium; and the ‘capital partners’ who have invested money or money’s worth. Efficiency savings made, through more efficient working or new investment would be shared equitably between the stakeholder groups.

An NHS Pool opens up a simple but radical new financing option which consists of the creation and issue of Units redeemable in payment for staff services. Anyone who understands Air Miles or has a Tesco Club Card is familiar with the concept of Units as undated credits.

The NHS Trust stakeholders could invest in these Units and thereby ‘lock in’ the price of staff services, while in return providing interest-free financing to the Pool. Similarly, staff could receive interest-free credit by selling Units to the Pool. There is no reason why Units in the Pool should not be sold, at a suitable discount to the market price, to financial investors (such as staff pension funds, although there is a tax issue) who are interested in ‘hedging inflation’ by holding Units likely to retain their value, rather than sterling debt which is subject to losing value.

So my recommendation to health unions is that they should urgently explore how they may best facilitate the assumption of ownership and control of NHS Professionals Ltd by their members…..and by NHS Professionals staff who are not yet members. I believe that they will find that a ‘Co-operative of Co-operatives’ model within a partnership framework will enable the staff to outbid all others, simply because they are not burdened with the costs imposed on other bidders by unproductive financial investors.