Inequality in British State Schools: A Completely Avoidable Situation?

Figure 1: Absenteeism by level of deprivation, England, 2004

The Guardian today reports that Britain’s top 50 state-funded comprehensive schools and academies have become more unequal over recent years, and are not reflective of the social composition of their surrounding areas, or of the remainder of the schools in England. Those of us from more equal societies might think this is not a big deal but the research is quite stark in showing very large differences between the schools and their surrounding communities. Of course, inequality in educational outcomes in the UK is stark and scary compared to other OECD nations, and to help digest this I’ve provided two figures. Figure 1 above shows rates of authorized (i.e. with parental request) and total absenteeism (i.e. including truancy) for small areas in the UK, by the level of poverty of the area; the further left you go, the poorer the community becomes. Figure 2 below shows GCSE achievement on the same scale. In this case, “deprivation” is measured by the Index of Multiple Deprivation, which I think is the scale for measuring poverty that is favoured by the UK Office of National Statistics.

Figure 2: GCSE Scores by level of deprivation, England, 2004

School outcomes in the UK are obviously heavily determined by wealth. The Guardian report suggests that amongst state-funded schools this effect is most obvious in the elite schools, the comprehensives and academies. This, it suggests, is due to increasing income inequality in the UK, and because of the power of house prices. Basically, middle class families in the UK are able to buy houses in the catchment areas of the best schools, ensuring their children can access those schools. This in turn has the effect of pushing up property prices in those areas, forcing out poorer people and preserving the schools for the wealthier incomers. It appears that some of these schools have a policy of guaranteeing access not just on the basis of catchment area but on distance from the school, which guarantees that people with better purchasing power can push out poorer people.

The statistics about differences between school socioeconomics and that of the surrounding communities are pretty stark. They report that

uptake of free school meals – which is most often linked to parents receiving low-income benefits – was lower than half the national average: 7.6% in the 500 leading schools compared with 16.5% in almost 3,000 state secondary schools in England.

Just putting aside the fact that this suggests 16.5% of British families are too poor to provide their children with lunch, we can see that the communities served by these schools are, on average, wealthier than the rest of the country. They are also wealthier than the communities they are embedded in. Measured in terms of whether the schools enrol equal or higher numbers of students on free school meals as are present in the local community, the report found

only 25 also exceeded their local average, and they were well outnumbered by the 106 schools that had fewer than 3% of their pupils eligible.

Most of these elite state-funded schools were somehow managing to recruit on income, even though they are ostensibly open for all. This isn’t inevitable, and some schools have shown that it is possible both to recruit above-average numbers of poorer children and to have good academic results. For example, Chesterton community sports college in Staffordshire:

Chesterton college in Newcastle-under-Lyme has 22% of its pupils on free school meals, compared with its local authority average of just 9.8%. In 2012, 72% of its pupils achieved five good grades at GCSE, well above the national and Staffordshire local authority average of 59%.

This shows that in a good school, poverty is neither a barrier to access nor to success. So what’s going on? This Guardian article is citing a report by the Sutton Trust, which recommends some interesting solutions to the problem, including the use of lotteries or banding (basically, stratified random sampling) to ensure equal access (or, at least, better access). These are interesting ideas for short term solutions, but they don’t address the basic problem: massive inequality in British society somehow ensures that even with free-to-access services (like health and education), those with the assets manage to seize the advantage. The report makes this clear through one simple stark claim: some proportion of this elitism in state-funded schools is only possible because some parents are willing and able to move houses to be in the catchment area (and to push others out of that catchment area). People are required and willing to move homes just to get these superior education services. Should a good high school education be worth that much? Why are people moving homes to secure education outcomes? And should they have to?

I think this problem is driven by two factors: 1) investment in the majority of British state-funded education is so poor that people are willing to move homes to ensure their kids don’t have to go to some schools; and 2) the middle class in Britain now see their situation as so precarious that they are willing to make major asset purchase decisions (home purchase) simply to guarantee their children continued membership of the class they grew up in.  It seems to me that neither of these things should be necessary, and that there are alternative ways to manage society that would prevent these two situations – in my opinion, in a way that benefits everyone.

Increase investment in the worst schools

Looking at the two charts above, and considering the success reported by some of these elite academies, it’s pretty obvious that there must be some terrible schools in the UK, and some schools in serious need of extra investment. This won’t work by itself, since a lot of these areas need major cultural and economic change of their own, but better schools, and better teachers in those schools, supported in their work and properly able to deal with challenging students, will make a difference to the outcomes at those schools. It won’t completely change the phenomenon of rich and middle class parents fleeing to the state-funded comprehensives, but it will reduce the incentive as parents realize that attending a completely ordinary local school won’t kill their child’s future. I’m willing to bet as well that part of the reason poor schools in poor areas do so badly is a lack of educational diversity – no high achieving children, no historic record of achievement to inspire subsequent generations of students, and no reward for teachers to encourage them. If all these teachers have to look forward to is another year full of future criminals and children whose parents make no effort, then they will soon give up. And parents with any desire for their children to achieve will see that and move on. I’m also suspicious that the worst schools in Britain aren’t just educationally tatty: their facilities are, I’m willing to bet, also terrible, and the entire community lack pride in them. That can be fixed.

Increase attention on negative outcomes

Figure 1 shows rates of absenteeism in the poorest schools, but unauthorized absenteeism is something that police and social services can intervene in. Why don’t they? Because they’re dealing with other pressing problems. I think a lot of people in politics in the UK don’t realize just how pressing those problems are, or how much they degrade poor communities and depress the people living in them. Better attention on those problems, and greater efforts to ensure that the community in which children live is supportive of the learning needs of children, will in time lead to reductions in inequalities in behavior related to childhood delinquency – less absenteeism, less casual violence, less malicious fires, less vandalism. But there is no easy way to achieve this except through more funding: more funding for social services, police, teachers, council beautification programs, and activities for children. I don’t think any political party in the UK sees these things as essential state services anymore, and instead of funding these services they’re squeezing them, at the same time as they squeeze the general education budget and the welfare budget. While that happens, sensible people will take their children out of poor areas, making those areas more intense areas of community dislocation, reducing the likelihood that the existing social services will be successful in fighting the problems, and creating a vicious circle of social exclusion. I don’t see this vicious circle being stopped without concerted community effort.

Reduce the social mobility hard scrabble

Why is an education in Britain so crucial that parents will buy a new house in a new area just to ensure it? I think it’s because the middle class in the UK and US has become precarious, and a lot of people in that class are aware that their children risk falling out of it. Securing a position in that class is becoming a desperate struggle, with increasing numbers of losers who are falling out the bottom end of the class and into the increasing pool of poor and socially excluded. This is Ed Milliband’s “squeezed middle,” the middle class who in America and the UK have increasingly turned to debt and the housing “ladder” ponzi scheme to stay ahead of the Joneses. This race has to end, and there is a very simple way to end it: shift from a society focused on social mobility to one focused on social sustainability. I’ve written about this on my blog before: social mobility is a false promise of wealth and advancement, and a better alternative is to find ways to ensure that all jobs are socially sustainable. That is, find ways to ensure that even people at the “bottom” of the ladder can raise a family and live a halfway decent life, rather than having to scrabble up. In such a society education is still important, but because there is less urgency to achieve a ticket to success – because all careers are sufficient to support a happy life – education is not commoditized. Such societies exist, in Northern Europe and Japan, and to a certain extent Australia and Canada; and in these societies, people do not have to fight their neighbours to push them out of a precious school place. And if they do, the people pushed out will still grow up to a functioning life. The UK needs to move away from its competitive, inequalitarian social model towards these models.

Engage corporate power

A society built on social sustainability can only be built in two ways[3]: through a powerful system of taxes and transfers, or through a system in which corporations agree to some kind of social contract. Of course, in reality most such societies see a little of both, but I think a lot of thinkers in the anglosphere see social sustainability as only possible through the former, and I think they see it this way because they think corporations will not give up their wealth for a greater good, but need to be coerced into it. This is, I think, fundamentally defeatist. An alternative to a punitive system of taxes and transfers is a Japanese style system of shared corporate responsibility, in which companies pay their lowest staff a living wage, and don’t pay their highest staff stellar wages. Just because corporations won’t do these things of their own volition doesn’t mean they have to be forced to at gunpoint, but I think the natural assumption in the UK is that no one will give up anything without being forced to. That needs to change. In this respect I think Britain could learn a huge amount from Japan, which has a very strong social contract based around individual and corporate responsibility – something which I think a lot of British people don’t believe is possible.

I think Britain’s inequality is heading into a very bad place, and it’s not going to be an option to ignore it for much longer. It’s cruel, counter-productive and embarrassing. The huge inequalities developing in education can’t be solved just by throwing money at the poorest schools, though this is an essential minimum: changes need to be made in the way that the government tackles social disunity in poor areas, and also in the way that British society views “upward mobility,” competition and social sustainability. But with proper attention on improving schools in the short term, and a shift in social and economic priorities in the long term, Britain can reverse its inexorable slide into a failed state. Can they do it? I’m not hopeful, but I think it can be done.

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fn3: that I can see. I think a third option is colonialism and theft of other nations resources, but let’s put that side for now.

 

Drug Cheat or Sour Grapes?

I’ve been enjoying the Olympics from the vantage point of my air-conditioned couch, and because I’m in Japan I’m getting to see only the sports that interest Japanese viewers, so at the moment it’s wall-to-wall Judo and swimming. Of course, having something of a soft spot for China I’m quite happy to see them coming up in the world of olympic sports, and this year’s sensation is Ye Shiwen, the 16 year old swimmer whose performance has sparked controversy. An American high up in swimming circles claims she must be a drug cheat, because not only did she beat a man in one leg of her medley (and not just any man – an American man), her times have improved rapidly in just a year or two, and her freestyle leg was just so much faster than her other legs.

Of course this has pissed off the Chinese delegation and Chinese media no end, though to her credit Ye Shiwen has responded in a level-headed manner both in and out of the pool. But she might be surprised to hear that she has found some strong defenders in the Australian press. The Sydney Morning Herald has an article disputing all the main claims of the American coach, and suggesting that both Australian and American achievers could be accused of drug cheating if judged on their performance alone. About Ms. Ye swimming faster than an American man (Lochte) in her freestyle leg, he points out that she didn’t actually beat his medley speed overall, and in any case four other men in Lochte’s race did beat Ye’s time in the same leg – they were all swimming their hearts out to catch up with Lochte, which is what Ye had to do in her freestyle leg to catch the leader.

John Leonard’s other big complaint is that Ye shaved five seconds off her previous best at this Olympics. The Herald’s article tears this complaint apart:

It wasn’t an insinuation Rice had to deal with when she clocked her world record in 2008, which was at the time an absurdly fast result.

Earlier that year, Rice shaved a startling six seconds off her personal best time to hit 4.31.46 at the Australian trials. American Katie Hoff reclaimed the mark a few months late before Rice countered at the Beijing Games, reducing it to below 4.30 for the first time. In contrast, people seized on the fact Ye reduced her PB by five seconds to claim the new mark of 4.28.43 as genuine grounds for suspicion.

The article also points out that Leonard’s comparison of Ye’s times now with two years ago are unfair because of Ye’s age:

To the wider sporting world, Ye is only now becoming a notable name. Yet to swimming diehards, she has been one of the rising stars for some years, even if her surge of form in London has caught most people by surprise. Beisel and Rice had been the favourites for gold.

Ye won the 200m IM at the Asian Games in 2010 (2.09.37) and the 400m IM (4.33.79), all at age 14. At the time, she was listed at 160cm tall. Now, the official Olympic site lists her 12 cm loftier at 172cm. That sort of difference in height, length of stroke and size of hand leads to warp-speed improvement.

To me these paragraphs also contain an insinuation of bad faith against Leonards: he clearly, as a swimming insider, knows that Ye’s times have grown with her age and body size, and should be aware of her history. So why is he making the complaints so openly now? Would he be happy to have them made against Michael Phelps or Stephanie Rice when they started their careers? Is it fair on Ye that her improvement should be immediately slated home to drugs? The accusations have already hit home, with the doping committee making an unprecedented release of her pre-olympic drug testing results to calm the waters, but it’s probably the case that the claims won’t die down.

I think that she’s probably not a drug cheat (or if she is, she’s doing the same undetectable cheating as everyone else) and Leonards and others who insinuate that she is are well aware that her performance is natural. But these people are watching their nation’s long-standing dominance of this sport sliding out of their grip as China’s performance improves. There are also insinuations of “military-style training camps” (always a marker of repression when they do it, but of efficiency when we do it), tightly-controlled sporting worlds, etc. But in fact the Chinese swimming world is quite open and employs foreign coaches, one of whom wrote an illuminating opinion piece for the Guardian, indicating exactly why China is improving its performances so fast: hard work. This coach writes:

Chinese athletes train incredibly hard, harder than I can explain in words and as a coach who has placed swimmers on five different Olympic Games teams, I have never seen athletes train like this anywhere in the world.

They have an unrelenting appetite for hard work, can (and will) endure more pain for longer than their western counterparts, will guarantee to turn up for practice every single time and give their all. They are very proud of their country, they are proud to represent China and have a very team focused mentality.

He adds that there is no special talent selection program, but that he just selects those players he sees and thinks are good. But he gives an interesting insight into the supposedly centrally-managed, state mandated programs that are always painted in such a negative light when they compete with Western athletics – in fact, like so much of Chinese “communism” they’re probably more free market than those in the West:

Let’s also not forget that this is their only avenue for income; most do not study and sport offers them a way out or a way up from where they and their families currently live in society. If their swimming fails, they fail and the family loses face … my athletes are salaried and receive bonuses for performance; I am salaried and receive bonuses for performance. We all want performance, not mediocrity, not sport for all, but gold medals – and they are not afraid to say this.

He also observes that China gives him all the funding he needs, and enormous freedom to manage his coaching programs:

If I want a foreign training camp, money is available; if I want high-altitude training – money is available; if I want an assistant coach – money is available; if I want some new gadgets or training equipment, guess what? Money is available.

I think this is the real threat that people like Leonards are worried about. As China becomes wealthy, it is pouring money into playing catch up not just industrially and economically, but in the cultural and scientific pursuits that have traditionally marked out the west as “advanced,” on the assumption that fast development in these areas will lead to results that will challenge western cultural hegemony. They don’t want to be pinned down to traditionally “Asian” sports that often have lower value (ping-pong, badminton, the traditional martial arts) but want to compete in areas that, by being traditionally western strongholds, often have higher cultural value attached to them: swimming, basketball, soccer and gymnastics. And by dint of their combination of rapid economic growth, rampant nationalism, and highly successful mix of central planning and free market ideas, they’re going to catch up fast. The doyens of a previous era of cultural and sporting superiority don’t want to accept it, just as a previous generation of industrialists couldn’t accept Japanese superiority in industry, and a previous generation of military planners couldn’t believe Japanese naval and air superiority.

As China continues to improve its sporting prowess, I think we’ll see more of the same, allied at times with accusations of cheating and corruption. But I think, given the sour grapes China’s growth is producing in many areas in the west, we should approach many claims about their sports programs and sportspeople with a great deal of cynicism and caution.

 

When You Know What You Need to do, But it’s Too Hard…

Today’s Guardian is reporting a new conservative policy on welfare, which will target young people on housing benefit particularly. David Cameron wants us to think that this is a big and necessary change, but in making his case he is giving an implicit nod to what really needs to happen in the UK:

If you are a single parent living outside London, if you have four children and you’re renting a house on housing benefit, then you can claim almost £25,000 a year. That is more than the average take-home pay of a farm worker and nursery nurse put together. That is a fundamental difference. And it’s not a marginal point.

I agree, David, though perhaps you missed the key point in your speech: if a farm worker and a nursery nurse can’t between them earn more than 25,000 pounds a year, there is something seriously wrong with your economic system. Do you expect these people to build a life together on that income in modern Britain? And do you wonder why people might prefer not to bother looking for work? You claim that 1 in 6 British children lives in a workless household, but your alternative to their lack of work is to cast them into a labour market where two grown adults between them have to work in hard jobs to make 25k?

What David Cameron needs to do is buried in that speech. He needs to find a way to make work more rewarding, to lift people out of the state of working poverty. He either can’t, or doesn’t want, to do either. Why bother, when your rich mates are demanding that you flood the labour market with cheap and vulnerable workers?

 

Did a Vampire Steal Your Home?

It will also eat your children

I think by now that it’s well known and accepted that Britain’s ex-Prime Minister, Tony Blair, is a vampire. Questions remain as to what magic he was using to enable him to go outside during the day – was it fairy blood, or the souls of Iraqi children? Alchemists across the multiverse want to know his secret. But beyond the arcane details, the facts are pretty clear: the working class people of Britain made a kind of unholy pact with their vampire overlord – in return for allowing him to do whatever unspeakable things he wanted to do to them, he would deliver unto the poor of Britain a ponzi scheme unlike any other through the magical ritual of “the housing market,” and they would be rich forever – the “end of boom and bust” as his blind necromancer-eunuch described it. In exchange for a little of their blood, they thought they would have it good forever. I don’t think they understood, though, just how depraved he was.

I guess that’s the inevitable consequence of giving too many rights to vampires. Especially vampires so old and powerful that they can work their hypnotic magic on a whole nation. He should have been staked back in the 1990s when he was first beginning to whisper his sibilant lies into the ears of the weaker minds in the labour party, and enslaving Brit Pop bards to his ferocious will.

However, the really sad thing about the Faustian pact that the working people of Britain signed with the vampire is that they never got their side of the deal, and it’s now becoming patently clear that they have been sold up the river, their hopes and dreams destroyed elegantly and completely by their undead ally. The truth is clearly laid out in this article from the Guardian, which reveals that the proportion of people in Britain who own their own home has declined from 43% in 1993 to 35% now; and is expected to drop lower, possibly to as low as 27%, if the economy remains stagnant. Furthermore, the second fruit of the unholy deal, ever-increasing wealth, has not been delivered. The Guardian reports that working Britons are suffering poverty at astounding rates:

these 3.6m British households have little or no savings, nor equity in their homes, and struggle at the end of each month to feed themselves and their children adequately. They say they are unable to cope on their current incomes and have no assets to fall back on, leaving them vulnerable to something as simple as an unexpectedly large fuel bill.

But hang on, I hear you say – didn’t Britain recently have a so-called “housing boom” during which huge amounts of investment poured into the private housing market? How can it be that there was a housing boom but less people now own their own homes than before the boom started? It’s as if – shocking! – the boom served to cement ownership of property amongst the wealthiest sections of society, and concentrated land ownership away from the hands of the poorer half of society – and we’re not talking about the bottom of society here, or the so-called “undeserving poor.” The Experian research specifically excluded the most deprived parts of society and the unemployed – there are 3.6 million households in the UK who are working full time but have “no assets to fall back on” and have likely been squeezed permanently out of the home-buying market.

This is not what that vampire promised. Not at all. The vampire promised those 3.6 million households that they would be able to buy a home and gain a little financial security, and maybe some wealth. Instead, they’ve been locked out permanently. It hasn’t been remarked upon in the discussion of this new phenomenon of “generation rent,” but I think an important point needs to be recognized: this is the single biggest increase in inequality in a generation. In Britain, owning a home is a very important financial goal. It protects you in retirement, gives you secure capital, and ensures that your children have some form of endowment to protect them if (as easily happens in societies as unequal as Britain) they find themselves sliding down the income scale compared to you. Furthermore, over one’s lifetime it is meant to be cheaper than renting. Now, it doesn’t have to be this way – there are other ways to prevent inequality than ensuring home ownership – but this is the way it is in Britain. And the so-called “housing boom” has ensured that the number of people who are able to access this security has declined by 20% in just 20 years. That is a huge increase in inequality, and it all happened under the stewardship of the Labour Party, who were in power from 1997 to 2010. The Labour Party and their apparatchiks in the Guardian make much of their efforts to lift children out of poverty through tax credits, but what does that matter if at the same time they have stripped away a fundamental economic goal for 8% of the population? Those children who have been saved from poverty by tax credits will simply slide back into it in adulthood, in the depressing and sad way the Experian report describes: working hard, and not even treading water. For those 2.2 million children in the Experian report, their  adult experience of the housing market will likely be a series of long, arduous lessons in that most British of sayings: free to those who can afford it, very expensive to those who can’t.

Furthermore, much of this inequality is likely to be generational: the people who have concentrated their ownership of the housing wealth will be baby boomers from the middle and upper classes, and as the reports note, the main losers in this massive land grab have been young families. You will hear conservatives talk a lot about “generational equity” when they are worried about government debt (“leaving it to the next generation to foot the bill,” etc blah blah) but where were they during the housing boom, while a small slice of the richest generation in history were stealing land from generation X and Y? I don’t recall ever hearing anything from the ‘Tories that might have any resemblance to a warning that the “housing boom” was going to lead to a huge increase in generational inequity. But I bet you can find all sorts of that kind of lazy and shiftless argument about government debt and bailout funds.

So where does that leave Britain? It has a stagnating economy, with a population of some 7 million working poor (2.2 million children!) who are on the brink of financial disaster, a whole generation squeezed out of the financial security of home ownership, and yet simultaneously a rental market that is suffering a lack of housing supply – so rents are skyrocketing. At the same time, private superannuation funds have been losing money for the last 10 years, making home ownership more valuable than ever, yet the “housing boom” has shaken a huge number of people out of that market – permanently.

Which just goes to show that the people of Britain should never have cut any kind of deal with that vampire – they should have staked it, and locked its cabal of necromantic followers into a dungeon somewhere, then thrown away the key. It also makes me think that the Reign of the Vampire saw a greater increase in inequality than ever happened under his supposedly satanic predecessor, Margaret Thatcher. I wonder if many people in the British left agree with me? Let’s consider, as a salutary example, this chap: Dennis Skinner, 80 year old Labour stalwart who was “formed in the pits and the war” and has a strong dislike of toffs and Thatcherites. He refused to take a cabinet position under Blair because he might speak out against government policy, and then be exiled from the party. Dennis, mate, allow me to let you in on a secret: your boss was a vampire. Honour, decency, and any kind of morality worth having demanded that you speak out against him and his stupid ponzi scheme. But you expressly avoided putting yourself in a position where you would be able to do that effectively. Or, could it be that you just missed the important facts here? You went to dinner with Tony Blair and were somehow looking the other way when he grabbed one of the waiters, snapped his neck and drained him of his life’s blood? And you were just, kind of, you know, having a senior moment when he was telling you all about his glorious ponzi scheme that would see everyone in Britain get rich forever from borrowing money to buy each other’s houses. You may be a labour stalwart, but there’s something else you are too: an immoral fuckwit. And the next generation of kids to grow up in your area – who will never have to go down the pits because Margaret Thatcher closed them – will never be able to afford to buy a home because of people like you and their slavish devotion to a vampire. But you and your mates will continue to whinge about how Thatcher destroyed the country and made it less equal.

As I mentioned, none of this lets the Tories off the hook – they were cheerleaders for the vampire’s stupid ponzi scheme from its very inception. But idiots like this, who are so profoundly incapable of sensible policy-making that they drop hints about returning to the gold standard, don’t have a vampire for a boss. Their claim to infamy is that they could have done better – basically a badge of pride for your average Tory. But unlike the Skinners of this world, it’s not sitting on the lapel of their coat next to a badge that says “I allowed a vampire to arse-fuck my country,” which is what most members of the Labour Party should be wearing.

And for the record, it was obvious to me that the vampire was evil from the moment I set eyes on it. That hideous fixed grin, the soulless eyes, the voodoo carefully disguised as an economic policy … the only question that remains unanswered for me is – how does it manage to walk around in sunlight without bursting into flames?

 

Labour Union Venality

It surely comes as no surprise to my reader(s) that I am a strong supporter of labour unions. Not only are they the single most important mechanism by which the working classes of the developed world secured basic rights, but they are a fundamental part of the Australian social fabric – they have been around longer than the nation, and were crucial players (for good or ill) in almost all of Australia’s most important political events. I would go further and say that all conservatives should also be strong supporters of labour unions – they are a classic model of spontaneous and organic social organization, and any conservative who respects the right to freedom of association and incorporation has to respect the role of unions in society.

Unfortunately, labour unions can also show remarkable levels of venality that can really drive me crazy. In today’s newspapers we see two perfect examples of this venality in action: the decision by the British Medical Association to go on strike over pensions, and the opposition of certain “left” wing unions in Australia to Enterprise Migration Agreements. Probably, practically speaking, the former is worse than the latter, so let’s handle them in that order.

The Doctor’s Strike

The British Medical Association plans to go on strike on June 21st over pension payments. Pension payments. The average salary for General Practitioners in the UK is 110,000 pounds, and although their pension and tax arrangements are a little weird – and kind of eye bleedingly high under the new rules – on this average salary a GP can expect a take home salary of 40,000 pounds. That’s the equivalent of a salary of just over 60,000 pounds for a standard employee. That’s the top 5% of Britain’s income scale, which puts the average British GP in a ludicrously small percentage of the world’s income earners. Incidentally, we’ll be coming back to a discussion of world income scales when we tackle the Australian unions.

So, some of  you may have noticed that there have been some changes in the NHS in recent years. Specifically, a massive reorganization of funding systems to force GPs to commission health care on behalf of ordinary tax payers; and a 3% reduction in funding for the NHS in real terms over the next couple of years. The NHS is one of the lowest-funded systems in Europe, and David Cameron aims to cut some more out of it. If David Cameron wanted to find a really simple way to cut 3% from the NHS, he could probably do it by bumping GPs from the top 5% of the income scale to the top 10%. But he didn’t choose to do this – instead, the NHS is going to be squeezed in myriad other ways. Ways that impact on patient care. Yet Britain’s doctors are going to go on strike because of their pensions. That’s right, the richest 5% of the British population are going to refuse to provide you with vaccination services in June because their pensions are going to be cut. And if you miss a few days work due to sickness, on your 21000 pound a year job, with your pension in a private fund that suffers with the fortunes of the money markets, well that’s a fair price to pay isn’t it?

I think David Cameron should use this strike as an opportunity to break the BMA. Bring in foreign doctors, drag the army into it (you’ll be fine so long as you have a head injury or need an amputation!), force British doctors to work longer hours for less, like their European and Australian counterparts. Force them to back away from criticizing organizational reforms, and hand more power to nurses. When the NHS was formed, and Bevan was asked how he would quiet criticism from the doctors, he replied “I’ll stuff their mouths full of money.” That plan hasn’t worked for the NHS, and we can see with this strike how doctors’ professionalism is serving the NHS – they won’t go on strike over some of the silliest medical reforms in a generation, but touch their pensions and, well …! That, my friends, is venal.

Australia and the Big Bad EMA

Which brings me to the perennial problem of Australian labour unions: racism. I’m pretty sure that there is more than one important theorist of working class politics who has observed that solidarity with the international working class is a crucial factor in a successful and radical labour movement. Now, admittedly, it’s an old-fashioned idea, but I think it’s got a more distinguished pedigree than the White Australia Policy. In Australia recently the government announced the introduction of a system of guest workers – rare in Australia generally – to work in mining projects. This system, called the Enterprise Mining Agreement, was introduced because mining companies are having difficulty finding employees easily in Australia. Australia has 22 million inhabitants, and is experiencing an unprecedented mining boom, primarily because of China’s economic growth. It’s hard for a country of 22 million to field enough workers in a situation like this, especially since mining booms aren’t exactly easy to predict and an economy the size of Australia’s isn’t in a position to build up a surplus workforce that can be quickly and easily deployed to a new area of industrial growth – even if that sector were in the cities rather than the arse end of nowhere. And rest assured, from someone who went to school there, that when Australians say “arse end of nowhere” they mean it in a way that most other countries haven’t ever had to come to grips with. People don’t willingly move to Australia’s arse end, which is why the wages for these temporary mining jobs are astronomical – $150,000 a year or more.

So the government has agreed to allow a mining company to bring in some workers from overseas. And the unions are up in arms about it. Which begs the question – have they grown up at all in the past 30 years? I thought we’d got well past the point where members of labour unions still thought these kinds of racist barriers to the free movement of labour were either a) a good idea or b) at all consistent with the basic principles of unionism. Apparently not. This is particularly silly at the moment because the government allowing this process is a Labor government, the best friend of the workers that the labour unions can hope for in the present environment, and that government is in desperate need of good news to arrest its terrible polls. It is also simultaneously engaged in a long-term battle with the mining companies over windfall taxes and the new carbon pricing system, both of which the mining sector strongly opposes. It’s as if the government thought that by throwing the miners a small bone it could get a bit of quid pro quo going on, and reduce some of the more extreme political opposition it faces from them. So in step the “left” labour unions to piss on that bone. And why? The mining sector jobs in question are a tiny, tiny proportion of Australia’s workforce, at the very top end of the wage scale. We’re not talking migrant contract cleaners here, but extremely well-paid and well-treated people working in extremely unusual circumstances during a once-in-a-generation boom. i.e. people who are going to get rich from being in the right place at the right time. Unions are there to represent everyone in the workforce, not to damage the political prospects of a pro-labour government by sticking up for a tiny minority at the expense of people from a much, much poorer nation. Because that’s the other side of this equation: if the EMA doesn’t go through, just over a thousand Chinese labourers are going to lose the chance to move to Australia and earn more than they ever dreamed of. They may, it appears, earn only half what their Australian contemporaries will earn, but that’s still a lot of money in China.

This aspect of Australian unionism eternally frustrates me. The only way to protect rights and conditions of Australian workers in a global market place is through truly international solidarity. You don’t protect your own rights and conditions by throwing up barriers against foreign labour, but by agitating for better rights in those countries. The solution to the problems of a globally competitive marketplace are not protectionism here but development there. And one very effective path to development and solidarity is flexibility in the movement of labour. Rather than opposing a few foreign labourers in a market with strong labour shortages, the unions should be enrolling those labourers in local unions and agitating to protect their conditions, get them English lessons, teach them how to organize the Australian way – so when they go back to China they’re in a better position to extend the rights of the Australian working class locally. Who knows, one day the roles may be reversed, and Australians may find themselves being locked out of a boom in China because of mutually exclusive barriers to the free movement of labour. We won’t be on top of the economic pile forever. In fact, the only certainty in life for a country the size of Australia is that we are at the whim of the political and economic decisions of foreign powers. I thought this was a lesson we learnt under Keating and his economic reforms, but apparently some of the unions haven’t got the memo. Still. After 20 years of labour market reform and 100 years of the theory of labour movements.

What on earth would Lenin say?

A final note: David Cameron is toast

David Cameron’s Britain is experiencing stagflation, his former media advisor has been arrested for perjury, his main backers in the media are being slowly picked apart by the police and the courts, his NHS reforms are universally unpopular, Labour have a huge poll lead on him even though their leader is a pointless dweeb, the stench of corruption is hanging over his frontbench, international bodies are lining up to say he needs a change of course, there may be a drought this summer, it’s public knowledge that he thought “lol” means “lots of love” (and he said it repeatedly to a married woman who he really really should have been keeping his distance from!) and now on top of all that he faces a doctor’s strike. Even if he can rescue his and his party’s popularity, his Liberal Democrat coalition partners are clearly history, so he’s unlikely to even be able to retain the weak position of a hung parliament. Is there any conceivable way – short of a war – that he can pull back from such a situation? And does this mean that Labour will become the natural party of government in the UK? Or will the prize go to UKIP? My God I’m glad I got out of there when I did …

 

Colonialism 101

Not the picnic Gordon thought it was ...

Against all expectation, the Guardian today reports that the British government destroyed records of its colonial atrocities.The government destroyed many documents detailing its worst excesses, and hid those documents it didn’t destroy. These latter documents were kept in a secret location and should have been released in the 1980s, but were kept secret in breach of the government’s own disclosure laws. The atrocities they detail aren’t very pretty, either:

The papers at Hanslope Park include monthly intelligence reports on the “elimination” of the colonial authority’s enemies in 1950s Malaya; records showing ministers in London were aware of the torture and murder of Mau Mau insurgents in Kenya, including a case of aman said to have been “roasted alive”; and papers detailing the lengths to which the UK went to forcibly remove islanders from Diego Garcia in the Indian Ocean.

…

Among the documents that appear to have been destroyed were: records of the abuse of Mau Mau insurgents detained by British colonial authorities, who were tortured and sometimes murdered; reports that may have detailed the alleged massacre of 24 unarmed villagers in Malaya by soldiers of the Scots Guards in 1948; most of the sensitive documents kept by colonial authorities in Aden, where the army’s Intelligence Corps operated a secret torture centre for several years in the 1960s; and every sensitive document kept by the authorities in British Guiana, a colony whose policies were heavily influenced by successive US governments and whose post-independence leader was toppled in a coup orchestrated by the CIA.

These are not the kind of low-level violence we see depicted in your average Passage to India type story, they are serious, systematic and government sanctioned human rights abuses that under the laws of war would see their perpetrators imprisoned for a very long time – and many of them happened after the establishment of the Geneva conventions and the modern settlement of the laws of war. It’s also clear that the destruction of the documents was directed from the very top, with an attention to detail that would make Orwell proud:

Painstaking measures were taken to prevent post-independence governments from learning that the watch files had ever existed. One instruction states: “The legacy files must leave no reference to watch material. Indeed, the very existence of the watch series, though it may be guessed at, should never be revealed.”

When a single watch file was to be removed from a group of legacy files, a “twin file” – or dummy – was to be created to insert in its place. If this was not practicable, the documents were to be removed en masse.

This is not news because of a sudden revelation that the UK did bad things in its colonies – this has long been known – but it is important because it shows that the historical narrative (and particularly the public debate) about British colonialism has been biased in the UK’s favour. There is a strong belief in the UK that British colonialism was “benign,” both objectively and when compared to the French or the Dutch, and that the British presence in these countries civilized and advanced them – this belief is tackled directly by Orwell in Burmese Days, and is still present in the public understanding of colonialism in the UK. For example, many British still believe that India is where it is today because of, and not despite, the British presence there, and much of British debate about “the state of Africa” ignores the possibility that colonialism might have played a role in influencing the political and economic character of the post-independence states.

Now we can see part of the reason for this blithe ignorance of the systematic and cruel nature of British oppression in the colonies: the government carefully hid it, both from the post-independence governments and from its own people. It destroyed the worst evidence and hid the rest, well past the time when it should have been revealed, thus ensuring that the true character of the colonial era was never publicly documented or allowed to be sourced authoritatively. This makes it much easier to pass off post-colonial states’ claims of abuse as sour grapes or political posturing, since there is no “credible” evidence that anything happened. It also enabled the government to present the violence of the anti-colonial political movements as unjustified, and this in turn played into its depiction of the remaining post-colonial movements, like the Irish Republican Army (IRA) as using violence that was excessive for their cause – after all, if British rule had been relatively benign in Asia, why would it be worth killing people to achieve independence in Ireland? Had these documents been released in the 1980s when they were supposed to be, the IRA’s claims that a peaceful settlement was impossible would look somewhat more credible, and their behavior after Bloody Sunday (1967) would look more like a rational response to systematic state violence than the commonly-characterised “over-reaction to an isolated incident.”

And this is the key role that the systematic destruction of evidence plays in fabricating the history of British colonialism: in the public narrative, British violence in the colonies was just isolated incidents by a few colonial soldiers or the odd governor, not a coherent system of repression coordinated and directed from the centre. Nationalist violence was an over-reaction and everyone should have just done what Gandhi did. Britain left with its head held high, having civilized these far-flung realms and then handed them back with only the occasional moment of unfortunate retributive violence. The real narrative, it appears, is very different, and the release of these documents enables us to look back on the events of the time and especially the political and military decisions of the anti-colonialists with a very different perspective. They weren’t fighting for an unrealistic ideal of third world sovereignty, but were trying to overthrow a repressive invader that protected its power through the systematic use of state-sanctioned torture and murder.

This also colours our understanding of previous eras. If the UK government of the 50s and 60s was willing to engage in this system of deception, what were previous governments doing and how does our understanding of previous colonial events change? For example, A.N Wilson’s The Victorians dwells extensively on the behaviour of Britain in India and the British public’s attitude towards India, and describes in detail the Indian uprisings in the 19th century and the British military response. But did Wilson have access to all the facts, or was he working from a highly biased and selective British account of those events? Wilson depicts the British response as largely restrained, excessive only in some instances and not given any strong centralized repressive impetus. Is this true, and can any scholarship on the colonial era before 1950 claim to be able to make claims to truth about British behaviour?

I believe Britain hasn’t come to terms with its colonial past, and part of the reason for this is its biased public narrative. Now we can see what role the government played in constructing that bias, and begin to question the common conception of British colonialism as misguided but largely benevolent. In fact, it was cruel and evil, and the government is finally beginning to admit it. In 2005 the Prime Minister declared that Britain did not need to apologize for its colonial past, and asked ex-colonies to focus instead on British ideals of “liberty and tolerance.” Perhaps they can enlighten themselves as to exactly how those ideals operated through a review of the documents at Hanslope Park? And perhapsthe British should be asking whether they really do need to apologize for colonialism, just as Australia has for child abduction, and the USA for slavery?

 

 

British Health and Safety Horror

Gamers from Britain of a certain age may recall the educational videos released by the government about various saftety topics – stranger danger, farm safety, getting crushed by trains, what happens if you slip on a rug, etc. I remember being terrified by the farm safety video when I was at school, and having to write some stupid essay about making too much noise in the changing room and having a kid fall over and hit his head on a radiator and die[1]. Well, the Guardian has an article about these videos and how terrifying they were, including links to the worst of them. They are genuinely creepy and nasty. The article mentions that they seem to have quite a resemblance to the style of horror at the time, and I do wonder which inspired which.

If you look them up on youtube you’ll find some genuinely disturbing entries in the genre, including the horrific Beware the Rapist (they told it like it was in ’70s America – who could ever trust a door to door christmas card salesman after watching that?) and the hilarious one about the pram. One can also look up the Protect and Survive nuclear war survival videos, which make Duck and Cover sound like a fairground game. I would have thought that as soon as those kinds of videos are being aired, in all seriousness, by your own government, it’s time to say “fuck this for a game of soldiers!” and overthrow the entire system – it’s beyond madness that people were seriously contemplating this kind of situation. Younger generations are, I think, genuinely lucky that the threat of nuclear war has faded, if for no other reason than that they don’t have to put up with these horrendous videos.

Some of the comments under the article contain links to and/or descriptions of other videos, and some of them also contain some pretty funny comments on how society has changed. This one, sadly unlinked, about safety videos in India:

A dad is driving to work, imagining all the horrific things his toddler might be dying of back home because of his lack of safety precautions there. He successively imagines, in graphic detail, it dying by putting its finger in an electric socket, being boiled alive by a pot of boiling water he forgot to take off the stove, slashing its throat on the razor he forgot to put away, falling off the fourth-floor veranda that he forgot to screen in, and so on. In the end he decides to rush home to make sure his kid is safe. When he sees it is unharmed, he is so happy, he picks it up, joyfully throws it in the air, where it promptly gets mangled in the ceiling fan

Haha! Disasters are funny! But funnier still, this style of video seems to have spanned the globe. Were the Soviets doing it too? Japan? Of course we don’t see these videos at all anymore (at least not that I can tell), maybe partly because Health and Safety education has moved beyond the belief that accidents are the fault of individual choices, to ways of designing them away – many of the “accidents” in these videos that the audience are warned about could be avoided by, for example, redesigning electrical plugs or putting proper fences around slurry pits. But maybe people realized that it’s better to die young in a slurry pit than to spend your youth watching horrible B-grade horror stories about slurry pits. Or maybe because, as another commenter observes, society was harder back then:

It was great in those days, so many ways to die, no chance of getting fat as even if your father was still around he was on a three day week and so spent all the money in the pub, drink driving wasn’t even recognised as a crime, and child abuse was a national sport. All men died three weeks after they claimed their pension, probably because of the 100 fags they had smoked every day since they were 8 years old.

Or maybe it’s because the government realized that this kind of movie is counter-productive if it’s going to lead to adults who write comments like this:

This is what is wrong with society and why kids have no respect, today they get CBBC and Mr Tumble, but in the good old days you were fully informed from an early age that you were almost certainly going to be dead tomorrow unless we listened to a paternalistic State. Now we have a State that is actively encouraging us to fill our baths with petrol.

Anyway, it’s interesting to watch these videos and see how things were in the 1970s – grindingly poor and very dangerous, and if you didn’t die in a slurry pit you’d die of shame at the clothes you were wearing. Thank the gods of commerce for progress, and ask yourself what terrors could lie in even the best made horror movie, when every time you went to school you would be exposed to videos like this. Child abuse or public safety campaign? You be the judge!

 

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fn1: This was in detention, because we were all given detention for being noisy. The reason we were being noisy is because some odious little kid was running around the physical education changing rooms waving his newly-erect willy about for all to admire, but when the teacher came in of course we all shut up and he put it away. So when I wrote my essay about a kid slipping over and falling because he didn’t hear someone yelling a warning to him about the puddle of water, I guess I was working out my post-erectile trauma.

 

NHS Reform Idea 1: Radical Privatization Surgery

The first suggested reform idea in my series of ideas to reform the NHS will start with this, the most radical. This reform plan presents a way to raise a large amount of money to pay down government debt, expand private and public investment in the health system, make the health system more flexible and accessible, and directly tie hospital funding to health outcomes, without changing the annual cost structure of the NHS at all. It sounds too good to be true, and so it probably is.

As I observed in my post on the current Conservative privatization drive, lack of private providers in the UK health market and central planning of all services are significant problems with the system: they affect the quantity of investment available, the efficiency of investment, independence of investment from political goals, and flexibility of response to changes in health care demand. The simplest approach to this is to allow new private entrants into the market and to fund them just as if they were public hospitals. This is very hard to do under the current system, because current block funding methods don’t work well for contracts with the private sector, and it will take a long time for new hospitals to be approved and built. A faster, simpler approach is to shift all the hospitals in the UK to a fee-for-service payment system (like Medicare in the USA) and then privatize them.

Shifting to a fee-for-service system

Fee for service systems have disadvantages that are well understood, but one significant advantage they offer is flexibility in response to demand. They also make the insurer paying for service able to purchase services from any provider, rather than having to be locked into contracts with specific providers – this potentially allows prices to be at least partially set by market forces. The main disadvantage in a stable health system is that they encourage over-provision of services, which leads to rapid cost growth for the payment provider (in this case, the government) and excessive healthcare attendances for patients – something that is potentially fatal in the case of e.g. prostate cancer. However, despite their disadvantages some systems – such as Japan – that use them have still managed to get good healthcare outcomes with low cost, so they aren’t the end of the world. Shifting a system like the NHS to such a payment process shouldn’t be impossible – in fact they’re already starting to do this in some ways using Healthcare Resource Groups. So let’s assume that this can be done, and all public hospitals can be switched to receiving payment on the basis of a fee-for-service system. Prices are set by the government, and hospitals paid for providing services. In theory there is no service the government won’t fund at a specified rate (we’ll return to this below), so everyone will get treatment. Some hospitals will provide some services at a cost below the price set by the government, so will profit from these; other services they provide at costs above the rate will either be subsidized by the more efficient ones (if the hospital is a not-for-profit) or closed (if the hospital is a private company). We’ll see the latter risk is one of the big problems with a fee-for-service system, but we’ll cross that bridge when we’ve burnt it.

So the essence of this scheme is to shift to a fee-for-service system and then sell off all 200 hospitals in the UK.

Privatizing all the hospitals in the NHS

We want a rapid influx of investment in the NHS, and we want to free up the NHS itself from investing in hospitals, and shift it to being purely a purchaser of services. The fastest and simplest way to do this is to simply flog off all the hospitals. This would potentially raise an enormous amount of money for the NHS very rapidly. The total cost of hospital care every year is about 20billion pounds, I think, spread over about 200 hospitals; that’s 100 million pounds per hospital on average. I think a private company that could be guaranteed an approximate 100 million pound income stream with, say, 10 million pounds a year profit would be willing to invest probably 100 million pounds in a hospital, so flogging off all 200 hospitals would raise about 20 billion pounds. This would be enough money to pay down about 10% of government debt and have 10 billion left over, which I propose be put into a health future fund. This future fund contributes to healthcare research and funding of new investments through its profits, and uses the principal to provide investment loans to the private and public organizations involved in the healthcare market (so that, e.g., if a union decided to buy a hospital for 100 million pounds it would be able to get a loan from the healthcare future fund to do this). This fund would thus support continuing investment in healthcare, and provide grants for research into new treatments as well as emergency funding to save struggling hospitals in the immediate aftermath of the privatization[1].

These privatized hospitals are then paid for their services from the existing NHS budget, which is about 20 billion pounds a year. But where previously this 20 billion pounds a year was split between hospital services and capital investment, now it is devoted only to services. I think this is the equivalent of increasing the hospital services budget by probably 5 or 10% (the amount of the existing budget that was being diverted by the hospitals to investment). Additionally, we have a huge short-term private investment of as much as 10 billion (the maximum value of the loans from the future fund) and then any other investment that the private owners want to put in. Having purchased a 100 million pound a year operation for, say, 100 million pounds, they might be willing to invest a bit more in improvements, I’m guessing.

Even if my numbers of hospitals and total hospital sector budget are incorrect, it should be clear that the privatization would raise a lot of money that, if disbursed between debt repayment and setting up a healthcare future fund, would be of significant benefit to the UK economy and health economy.

Allowing new entrants into the system

Of course subsequent to this privatization the government could also allow new entrants to the system, that would probably set up specialist services in areas where specific services were lacking. These entrants would be able to get start up funding from the future fund, of course, and would be entirely private investment. Thus over time the size of total investment in the health system would grow, and important consideration in improving levels of care in the UK.

A further, more radical entrant into the system could also be allowed: hospitals that charge an upfront payment. These hospitals would be additional to the current complement of hospitals, but would be able to charge fees to their admitted patients in addition to the standard service. They would, essentially, be luxury care centres. Unlike the current system, though, which does not allow the NHS to fund these kinds of providers, the hospitals would be allowed to charge the basic service to the NHS, and then charge only the top-up payment to the patient. Patients could pay out of pocket or cover the co-payment from a private insurance fund. This would allow private insurers to begin covering healthcare in the UK market, expanding the amount of per-service funding (and thus the proportion of GDP devoted to healthcare financing), but without requiring the private fund to cover the whole cost of hospitalization. Funds that have to cover the whole cost of privatization – as happens in America – have to be prohibitively expensive, and will not be able to compete in the British market.

These private entrants would have to be additional to the current complement of hospitals, and clearly labeled as private hospitals. They would need permission from the government to be established, and would only be allowable in areas that have already got a decent supply of healthcare. This is necessary in order to ensure that people don’t have to travel too far to get free care (a fundamental constraint on the NHS). As a result they would be unlikely to ever form a major component of the UK hospital system.

Consolidation and closure of existing services

After privatization, I expect many hospital owners would look at the cost structure and efficiency of their new purchases and decide to shut down some services because they can’t provide them competitively. For example, if a hospital in East London is providing cardiac services it is unlikely to be able to compete with Bethnal Green, and would probably close or restructure those services in order to remain profitable. Over time this would lead to a reallocation and consolidation of specialist services into better, more efficient hospitals, leading to efficiency gains and cost minimization, as well as improved health outcomes. This is very hard to do in the NHS as it is constructed now due to political influence. There is a risk that in the short term at least – until new hospitals are built or capacity is otherwise expanded – that this would lead to a loss of overall service levels, so it would be necessary to require hospital owners to seek permission for closures in the first, say, 5 years of their ownership. It might be necessary for the government to fast-track establishment of new hospitals in order to overcome this problem, which leads us to the possibility that some hospitals would remain in public ownership.

Partial privatization and gradual change

It’s probably best if the biggest and most important teaching hospitals remain in public ownership, so that the government retains some direct power to intervene in the provision of health services and also in the teaching and research capacity of the hospital system. This could include using the proceeds of privatization to build new hospitals, probably specialist, providing specific services in some areas of the country. These hospitals would be funded under the same arrangements as the privatized hospitals, though obviously they would also need some form of block grants in order to support investment and to maintain loss-making specialties that the government believes they need to run for research or market-failure reasons. They wouldn’t be precluded from opening private wings (in fact, their reputation for excellence might make them the best option for starting this process), but they would probably also be held to stricter rules on service provision (for reasons of access and equality) than the private providers.

As a general rule, rapid privatization is a dangerous prospect so the model proposed here might require a long time to complete, perhaps starting with smaller hospitals and building on their experience. Reform of the general practice system to allow private companies to enter their too would probably also be necessary, in order to prevent the primary care system putting a brake on the development of the tertiary system. Gradual privatization would mean that when the really big services were privatized there was less risk of mistake; it would probably also increase the amount of money gained, since flogging off all the hospitals at once would probably require selling them at bargain basement prices. This would also allow the system to be expanded as the privatization happened, convincing the public of the benefits of the process as they see new services open and waiting times drop.

Risks and disadvantages

The worst risk in this system is that immediately after privatization the new owners will close unprofitable specialties without opening new ones, leading to a general reduction in services provided across the NHS. This would indicate either that the NHS was over-stretched and incapable of providing many of the services it was providing, because the prices set on privatization would have been based partially on pre-privatization activity, and may have been set too low if the NHS had been operating massively under-budget for years. There’s also the associated risk that with prices set too low, the new owners struggle to make a profit, go into administration and then have to be re-nationalized. That would be a political disaster of monumental proportions, as well as costing the government a huge amount.

Another possibility is that the closure and reallocation of services will see a massive loss of service provision in poor areas, where profits will be lower. This will increase the inequalities already inherent in the British system and is one of the main concerns of the advocates of retaining central planning in the NHS. Careful choice of which hospitals to privatize will help with this, as will the simple expedient of providing additional funding in some form (block grants, contractual rewards, or special loans) to companies that retain services in these areas. If this risk does eventuate, the government may find itself having to increase the total healthcare budget to support its goals of reducing inequality – but this is likely to be the case in any healthcare system in the UK that is serious about reducing inequality, and although politically unpalatable in the UK it’s essential if the UK ever wants to reduce inequality. Sadly, this is never going to happen (and if it does the money will be misspent anyway).

The final disadvantage of this plan is that it requires the government of the UK – which couldn’t organize a root in a brothel – to manage the biggest privatization of services since the collapse of the USSR, to set a realistic and practical pricing structure for healthcare that is affordable but sufficient to enable private sector organizations to make a profit, to not to squander the result of privatization, to be willing to commit to a 5, 10 or even 15-year long period of massive health system reform (this would require bipartisan support, which is almost impossible in the toxic political environment of the UK) and to be able to sell the whole thing across multiple elections. So to actually implement this program in the UK would be inviting disaster.

The Final Picture

If successful, the final health system that emerged from this reform would very much resemble that of Japan, with an entirely public purchaser of services (the NHS) purchasing services from a largely private market place of hospitals and clinics. Prices would be set by the government at first but could potentially be set purely by market forces in the long term as capacity increased. Because the UK system is more centralized in larger hospitals than Japan, and because our remit requires all patients to be able to get any service free at the point of care, the system would probably have more publicly run providers (primarily large teaching hospitals) than in Japan, and would probably still be slightly more shambolic (due to the lack of private payments). The healthcare future fund would be unique to the UK, and there would probably be a large number of direct grants and subsidies (at least in the short term) to maintain the system and prevent growth of inequality. The final outcome of this process is not unrecognizable in the current range of healthcare systems, though, so it’s not impossible to imagine that a well-run privatization and reform program could get the NHS to this point. And if it worked broadly similarly to the Japanese system, it would be a vast improvement on what the UK has now.

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fn1: I think this would be necessary because even a mind as great as mine would be likely to make mistakes in pricing services or estimating long term service levels

 

Alternative Ideas to Reform the NHS

Having criticized the approach the UK government is taking to reforming the NHS, it seems only fair that I should make a few suggestions of my own. Unburdened as I am by the responsibility to be serious or to come up with a proposal that actually works, I’m going to write up a few perhaps crazy suggestions this week and next. For my reform ideas, I’ve decided to set the following arbitrary constraints:

• The basic remit of the NHS must not change: that is, any reform plan must preserve the ability of the NHS to provide quality care accessible to all and free at the point of delivery
• The patient experience must not be changed, so that if a reform plan were enacted wholesale today, a patient attempting to use the health system tomorrow would not notice any practical effect on their lives or patient experience[1]
• As much as possible, red tape and administrative barriers to healthcare access should be reduced at the level of the patient, so e.g. we should try to abolish lists and restrictions on hospital attendance
• The system should allow cost containment
• Where possible, the system should reduce inequality, or at least not make the current system worse

I will of course add extra rules wherever possible.

The four ideas I have so far are:

• Radical privatization, which looks too good to be true and probably is (this is essentially a radical shift to a Japanese-style marketplace but with no private up-front payments)
• Minimal privatization, in which minor changes are made to the hospital system to allow new entrants and private investment (essentially the Australian model hospital system tacked onto the British GP system)
• A license system, with trade in licenses slowly opened up to allow increased privatization and resource reallocation (this is completely new but probably just a mechanism to achieve a mixture of the other three ideas)
• Reform of the GP market only, to significantly improve the function of the primary care system while leaving the tertiary care system unchanged (essentially, the Australian model)

I hope these ideas will show that it’s possible to radically change the structure of the NHS without changing its essential relationship between patient and system, its fundamental funding arrangements or its main outcomes. I don’t claim that any of my ideas will work, of course, nor do they have to since I’m writing on a blog. But I suspect that even the most minimalist of them would be politically unpalatable in the UK now (and even more so when the Tories stuff up their current round of reforms).

Any other ideas in comments would be appreciated, and I’ll try and write them up too!

 

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fn1: This rules out care budgets and vouchers and some of the crazier ideas floating around in the UK and USA, that require patients to become active participants in health service planning

 

Watching the Privatization of Britain’s National Health Service

Yesterday the UK government passed the Health and Social Care Bill, which institutes sweeping changes across the National Health Service (NHS) that some observers claim will see it completely transformed from its present form into a privatized health provider. Depending on who you ask, we are about to witness the dawning of a golden age in health gains for ordinary Britons, or the unravelling of Britain’s healthcare system with terrible consequences. Those of us who don’t currently depend on the NHS for our healthcare get to watch the fascinating spectacle of the world’s largest centralized healthcare system (and I think according to some reports the world’s largest single employer) being dismantled piecewise from the comfortable vantage point of our functioning universal healthcare systems (unless we’re American, of course – you guys just get to be jealous that the UK has a universal health system to dismantle).

The Health and Social Care Bill contains, in  my view, one of the most appalling pieces of healthcare reform that a human being can conceive of inflicting on an otherwise functioning system, but it also contains at least the seeds of some important reforms that are long overdue for the British system. The former is, of course, the ludicrous idea of “clinical commissioning,” in which about 60 billion pounds of NHS funding is to be taken away from area health services (called “Primary Care Trusts”) and given to family doctors, who are expected to form up into consortiums that will then determine what care gets funded with the money they’ve been given. The latter is the decision to split the health system into providers of care (hospitals and health care services), who offer services that then purchased by the NHS (or the afore-mentioned godforsaken GP commissioners). If it were possible to achive this latter reform successfully, the NHS would have been transformed so that it worked along lines similar to almost every other universal health care system in the world, and would also open the way for significant private investment in healthcare infrastructure in the UK. I’ll give some examples of how simple and profound that could be in this post.

What’s Wrong with the NHS

The biggest problem with healthcare in the UK – and the problem that governments on both sides don’t want to talk about – is that it is underfunded. The UK spends just under 10% of its GDP on healthcare, compared to between 11% and 17% for France and the USA[1]; before Labour’s reforms in the early 2000s, it spent closer to 8.5% on healthcare. You can’t expect modern health outcomes with this level of funding, though the NHS has shown that you can still do pretty well. The reason that this funding is so low is that the UK system is a centrally managed, entirely publicly-funded service, from which private providers have been excluded since its inception. With no ability to participate in the NHS, tax rates high, and the NHS goal to provide all services free at the point of care, private providers cannot make money and are left providing boutique services to the very rich. Hence, private investment in health is low. But it’s extremely difficult for the government to make up this shortfall – it’s likely doing so would require the government to increase spending on the NHS by potentially as much as 20% (to take it from the 9.5% of GDP it is now to the 11 or 12% other countries enjoy). Obviously such a funding boost is politically impossible, and so the NHS has languished.

Funding isn’t the only problem though. A centrally-managed organization of this size is inflexible, conservative and inefficient, and forcing efficiency gains from such a behemoth is extremely difficult. Centralized decision making forces diverse organizations in diverse regions that have individual priorities to commit to goals and priorities set nationally, and leads to the classic inefficiencies and inflexibility of a centrally-managed utopian institution. Other health systems leave much regional flexibility and priority-setting to be determined both at a local level and privately, and force at least some health organizations to respond to patient needs by going out of business if they can’t. Classic examples of this kind of inflexibility abound in the NHS: until recently patients didn’t have a choice of hospital, but had to go to one that was linked to the area in which they lived. You can’t shop around GPs (in theory) but need to “register” with a GP and visit only one – you can’t, e.g. have a different GP for sexual health needs vs. chronic disease management, which is pretty common in other countries. Furthermore, GPs can refuse to accept new patients if their list is full, and many GPs require you to register before you can attend for health care, which is inflexible. There is no incentive for GPs to invest in their own services, since they can refer patients to a hospital for almost every condition, and have a largely captive audience, so the UK has an abundance of one-doctor surgeries with archaic opening times. At least a portion of their renumeration is based on their list size, so there’s no incentive for new GPs to enter the market or to try and increase the amount of services they provide: their ideal business model (financially) is to have a large list of patients and very short working hours, and there’s no incentive for them to merge to form larger GP clinics that might, e.g., provide out of hours services. This all changed slowly under labour since the mid-90s, but GPs – the gatekeepers into the health system in the UK – are very highly paid for a very poor service model.

The hospital sector in the UK is also under-funded and subject to the kind of rigid service models one expects of a centrally-managed system. The outpatient system is over-burdened from the broken gatekeeper model, and many of the hospital systems are lacking investment and modern infrastructure. This is a throwback to years of underfunding but it’s also a consequence of current funding constraints: both recurrent costs and capital investment need to be funded from the government’s budget, but they can’t contract out e.g. pathology services that would be routinely privatized in other systems, so where much of this investment is done by private companies in Australia, in the UK it’s all part of that 9.5% of GDP. The system is plagued with waiting times and archaic technology and systems, and everyone is overworked.

Hospitals can’t consolidate or specialize, which is a key method of improving efficiency, quality and safety of care. We know that larger facilities tend to have lower death rates and better success rates, but to achieve such benefits hospitals need to shut down under-performing clinics or specialties and focus on a more limited range of services – and some hospitals need to shut altogether. But in the UK there is a direct relationship between the government and the hospital sector, so every time a hospital plans to close even a single ward you see protests aimed at the local member, followed by political blowback, taken up with gusto by the press (who love an NHS scandal). The government inevitably buckles, and under-performing or inefficient (and sometimes dangerous) smaller facilities can’t relocate or close. In fact, the whole system is vulnerable to political campaigns – on nurses’ or doctors’ pay, on hospital closures, or even on particular treatment methods – in a way that a more mixed model is not.  So it creaks along, unable to consolidate for modern efficiency gains, unable to reform its failing gatekeeper model, and unable to inject the capital required to modernize. Plus, even if it did inject the capital, much of it would be subjet to political debate and delays that would mean it was inefficiently used.

A Model Example: Privatization of General Practice

For these reasons, the system needs to be diversified and decoupled from the political pressures that currently constrain its operations, and doing so is inevitably going to mean privatization. There is no reason, for example, that the entire primary health system (that is, GPs) couldn’t be thrown entirely to the whims of the market, with GPs offered payment only on a fee-for-service basis and the market opened up to corporate investors. If the government did this, international health care companies would be in faster than greased lightning, setting up large, efficient and modern clinics with heavy capital investment, bringing in overseas doctors or buying in the local younger doctors, incorporating allied health care services and providing a huge injection of capital to the GP market overnight. Older, settled GPs would hate it because they would be drummed out of the market, but this is exactly what is needed – get rid of these little shoddy one man clinics operating 9-5 and no weekends, and replace them with large, bustling services that provide evening and weekend medical care, physiotherapy, dental care, public health nursing and rehabilitation under one roof. It would immediately take pressure off of hospitals and make healthcare far more easily available for the majority of the working population. These services are the norm in other developed nations but still held back in the UK by the lack of private investment or public vision.

The Political Mistakes in this Bill

With these ideas in mind, the government has started outsourcing NHS services, and the Guardian reports on a controversial example from Devon, possibly the first in the UK: privatization of children’s health services. These services will be purchased by the NHS, but provided by either Serco (a private prisons company) or Virgin Healthcare (a branch of Richard Branson’s Virgin empire). This is a classic insurer/provider split: the NHS collects insurance from everyone in the UK and then purchases health services from a private provider. Unfortunately, from what one can tell of the process in the article, it’s going to go down the classic British privatization pathway: give the contract to a single provider without a fee-for-service element and then hope they don’t cock it up. The NHS, with no expertise in contracting from private services, is going to be writing a 100 million pound contract with a famously predatory company like Serco or Virgin. And not just for any services, but for the most controversial possible service they can find: child protection. This isn’t just a political risk but a healthcare risk, because these services are far more complex than say, radiology or pathology services, and there are very few private contractors with any experience in them.

The linked article on children’s health services makes the people bidding for this contract seem like very reasonable people driven by a genuine desire to provide decent health care and an awareness of what is holding the NHS back. For example, the Serco spokesperson says:

It has to cut £20bn a year. It can’t invest, but we can invest to improve quality and generate efficiency. We have to bid to deliver at prices that are a lot lower than the NHS to win contracts and that gives the NHS more money to put into the NHS itself.

This is a good example of why efficiency gains are important. They don’t just benefit the profits of the insurance company doing the purchasing, but also the health of all members of the plan, since they enable the insurance company to fund a greater number of services, and/or to extend its funds to new services. Unfortunately the Conservatives aren’t selling these points, but are instead talking up the need to save money.

Ideally, the privatization program the Tories are running would start with something simple – pathology or radiology services, or a small rural hospital – and be trialled over several years before being introduced nationally, and the most complex and controversial services (large teaching hospitals, prison healthcare, children’s services) would be privatized last or not at all. Lessons learnt in the initial small trials would be incorporated into the bigger privatization program, and where things failed they would be kept in public hands until better privatization methods could be trialled. Also, the system wouldn’t be privatized in a one-contract-per-service method as is shown here, especially not in rural areas where locals can’t easily choose another service not being provided by the sole contractor. Rather, services would be offered competitively to the lowest bidder, thus allowing the NHS itself to compete. The risk with solo contracts such as planned here are that they don’t actually exert a competitive pressure on the provider – they’re only as competitive as the tendering process. Patients as well as commissioners should have the ability to shop around.

Unfortunately, the Tories seem to have decided to push forward recklessly, implementing clinical commissioning and hospital privatization at the same time. There’s a risk of chaos, poor contract management, and cost overruns or service failures without any significant benefits to patients, at least in the short term.

The Most Likely Outcomes

The privatization of children’s services in Devon is a good example of the radicalism underlying the Conservative Party’s agenda on this topic: they don’t want to see a gradual unravelling of the NHS, starting with the easiest services and building up, and instead want to sell off the most complex bits while simultaneously managing the mish-mash of clinical commissioning, and cutting funding to the NHS by something like 20billion pounds over 5 years. The obvious result is going to be a 5 year torrent of bad news stories, and the public perception that health system privatization is both a kooky agenda (tainted by the confusion and chaos that clinical commissioning will bring) and driven only by the need to cut costs, rather than the very real need to improve the NHS. Thus, when the Conservatives finally lose power, the privatization agenda will be inevitably linked with their other policy radicalism and the agenda of “the cuts” (oh how I hate that term), and the chance to reform the NHS so that it actually works will be lost.

Furthermore, the Tories aren’t actually testing a health system reform that has any pedigree. A single payer insurer offering fixed payments on a fee for service basis to primarily private providers has been tried and tested in the USA (Medicare) and Japan (kokumin hoken). A weird system of ordinary family doctors holding millions of dollars in health system funding and using it to contract services from private providers on a block funding basis – that is unheard of in modern health systems. Why test it?

Mistaken Ideas About Health Inequality

Much of the debate about healthcare in the UK still revolves around this issue of central planning versus US-style free market models. In February the shadow (Labour) spokesperson on health, Andy Burnham, penned a piece for the Guardian in which he criticized privatization. There he claimed:

In the US system, for instance, it is possible to find some of the world’s most advanced and innovative examples of care. But, alongside it, we find very poor or non-existent care. The question we must ask is not which system produces the best individual examples of treatment, but rather which is best for everyone. On this test, the centrally planned NHS wins hands down.

This is a completely unreasonable comparison. The US has “poor or non-existent care” because it doesn’t have universal health care. The US could do away with this problem tomorrow by nationalizing all the insurance companies, forming one national insurance company funded by taxation, and then funding all medical care on a strictly fee for service basis. The system would be completely unplanned, with no government hospitals involved, but it would be pretty likely to eliminate “non-existent care” overnight, since all Americans would be eligible for care. Burnham also claims the NHS

provides the precious ability to set standards and entitlements to services at a national level. Market-based health systems do not afford a similar ability to control costs at national level, and allocate resources in a fair and consistent way.

But this is also not true. The government, providing all funds for purchasing health care services, can decide exactly how much it will pay, and provide it is not stupid or unrealistic, it is likely that the private sector will fall into line (we’re talking about 100 billion pounds a year of essential services here – people will be shoving into line to get a piece of that). Similarly, the USA has the ability to “set standards and entitlements” even now – for example, it’s very hard for a US health insurance company to refuse someone a policy because they’re black. The problem in the US is that the government won’t set those standards well enough, and by refusing to provide a universal health coverage model, has lost the ability to compete financially in this market place or to control it through its own considerable financial muscle. There have been many models proposed that would reform much of the US healthcare market without making it centrally planned, and would improve both its equality and its ability to contain costs – and in fact some private US organizations (especially HMOs) are famous for good cost containment. The tragedy of the US political system is that many of the education proposals coming from moderate republicans – voucher systems and the like – would significantly reduce health inequality if adapted to the health market, yet even relatively rational and minimal reform plans that would otherwise be favourable to their right wing are rejected out of hand because they involve “government intervention in medical care.”

The problem in the UK is that this debate about access to care has been framed as a debate between the NHS and the US system for so long that even experts and well-intentioned politicians with a strong understanding of the system (like Burnham) have fallen into it. But the reality is that centrally planned systems don’t necessarily reduce inequality. This is because inequality is not purely a function of inability to afford healthcare: it arises from the interaction between individuals and systems, the design of systems, and the inevitability of resource constraints. Wherever resources are restricted one finds that the wealthy, the educated and the powerful are better able to seize more of these resources, or seize them sooner (an important consideration in health systems). For example, in 2010 I showed that poor and older people tend to receive less referrals or take longer to be referred for a wide range of conditions within the NHS – this despite the fact that the NHS is free to all. This is because the referral system is a type of resource management system, and for reasons we don’t entirely understand, the wealthy and the educated are better able to negotiate any such system. So central planning doesn’t solve these problems, though the way the NHS is constructed makes these problems less life threatening than they would be in, say, the USA (where many of the people whose health outcomes I studied would simply not have access to health care at all).

Another reason that centrally planned systems don’t necessarily reduce inequality better than other systems is that health inequality is caused by factors outside the health system. It is, simply, a function of inequality, and there’s only so much that even the best health systems can do to reduce the effect of problems created in broader society. The UK is a very unequal society, and the NHS has to deal with the human consequences of that. The goal of health planners concerned about inequality is to find the best system to provide good healthcare to everyone that will also reduce inequality. Balancing these two goals in a resource-constrained setting is difficult, and I see no a priori justification for the idea that central planning is always the best way to do this.

Some Theories About Modern Healthcare Systems

Once the NHS and the US’s overly private system are done away with the world will essentially be left with a range of mixed-market models, largely based on the idea of a central universal insurance provider and a partially- or completely- privatized marketplace of service providers. Some, like Canada and Australia, will tend to be more heavily publicly run than others, like Japan or Germany. There will be a few unique hold outs, like China, Cuba and Switzerland, but largely the ideal form of health provider will have been settled. This decade the WHO is focusing on universal healthcare as a central policy theme, and the goal will then be to expand models like Japan’s to encompass the developing world – a pressing problem given the resource constraints there. There is no place in health policy for a purely market-based model and, as far as I can see, there is equally no place for a fully centrally managed model. The debate now is about how to extend the most functional mixed-market models to the rest of the world (including China and India) as a development goal, and how to resolve pressing issues of cost containment in the developed world.

Given this settled state of policy, it seems now to me that there are some central lessons that have been learnt since the expansion of universal care systems across the developed world over the past 100 years:

• Governments and markets can’t go it alone: models based entirely on one sector running the whole show don’t work, because health systems are enormously complex, requiring market-based flexibility and government intervention to prevent market failure and enforce standards and access
• Cost containment, universal access, and timely access are hard to balance: Most health systems can’t manage all three of these at once. The USA has managed timely access but not cost containment or universality; the UK has managed two of the three; Japan, Germany and France have probably got all three down but Germany is heading into financial trouble and Japan has inherited a unique set of social factors (a very healthy population and a very equitable society). This trio of goals for modern health systems are going to become harder and harder to balance as populations age and more expensive health care is developed
• You can’t fix inequality just by throwing money at it: obviously achieving universal care is an important part of reducing inequality, but that’s not the end of it. How your system functions and how people interact with it is important in determining where inequality arises and how well it is reduced. A complex system with non-financial resource constraints (like the NHS) can create or perpetuate inequality even though on paper everyone has access to care
• Centrally planned systems don’t solve inequality: Central planning can be an attractive way to reduce inequality, but it doesn’t necessarily work that way. In health systems, inefficiencies or inequities in one area inevitably produce problems and workarounds elsewhere, and centrally planned systems may be able to stamp out some inefficiencies or inequities, but they don’t necessarily have the capability to react to (or even notice) the problems their solutions create
• Muddled political visions produce muddled outcomes: They may claim to be friends of the NHS but the Tory political program in health is not just about improving the NHS. They also want to cut costs (to the government), and they want to reduce government interference. I think they also have an ideological goal of increasing the role of the private sector in healthcare, and I don’t think this view arises purely from a belief that this will make the system better – they have an ideological commitment to reducing the size and role of government. This muddled goal will produce a partially privatized system that doesn’t work because it wasn’t privatized with the goal of improving the system. Similarly, the Labour party may be friends of the NHS but they also had a goal of privatization with the intention of improving services, but they couldn’t separate that practical plan from their commitment to a centrally planned and government run NHS. The result was a series of aborted privatization plans that satisfied no one.

Health systems planning is where ideologies go to die, and the NHS is the classic example of this. It has long since proven that the centrally planned, socialized system envisaged in 1948 is insufficient to the long term management of a health system, but subsequent interventions to improve it have been hampered by ideology and have inevitably failed when they meet reality. The latest attempt by the Tories, though it has some good qualities and has the potential to take the NHS in a good direction, is highly likely to meet the same fate. If they do fail the rapidity of the changes, their timing and their entanglement with the Tory cost-cutting agenda could permanently damage the idea of introducing a mixed market system to the NHS, setting back much-needed reforms for a whole generation. This will leave the British people very poorly served by their health system, and continuing to fall behind the rest of the OECD in health outcomes. It will be sad indeed if the country that introduced the modern, free health service is overtaken by even the post-Obamacare USA as a model for health service provision.

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fn1: These figures taken roughly from the Commonwealth Fund’s annual report on health care comparisons between the UK, Germany, Netherlands, NZ, Australia and USA.