Organisational Cultures and the New NHS
The role of the PFI in the NHS
This chapter aims to analyse the United Kingdom's (UK's) National Health Service (NHS), revealing its origins and the key aspects of organizational culture in both the public and private sectors.
The PFI in the UK is now one of the major ways in which public sector services have been created in the UK (Broadbent, et al., 2002). However, it has been under public scrutiny regarding its operation in the National Health Service (NHS).
PFI calls upon the private sector to supply asset-based services to the public sector over a long period (up to 60 years) in exchange for monthly lease payments (Broadbent, et al., 2002). PFI was officially created in 1992 under the Conservative Government but was furthered by the Labour Government when it came into power in 1997.
The Labour Government has expanded the PFI in general into areas of the public sector that have historically been closed to private sector money for use in public sector services.
One of these areas, which previously had a significant lack of development, was in the health services industry. Before 1997, despite many efforts to develop PFI in the health sector, nothing was approved or implemented.
As soon as the Labour Party was sworn into office, it approved 14 proposals and started an additional 17 proposals (Broadbent, et al., 2002). There are plans for another 29 over the next few years involving the introduction of approximately £7 billion of private sector money into the public sector.
The creation of PFI, in the NHS, has been criticized as being too expensive compared to the costs of similar services supplied by the public sector and as detrimental to the quality of the services provided. For example, one of the organisational changes that have been associated with the implementation of PFI is a reduction in bed numbers.
However, research reveals that this judgement cannot be supported without a more thorough evaluation of PFI and of all public private partnerships (Broadbent, et al., 2002).
The IPPR (2001) says that the "evidence on value for money is variable across sectors" but "seems to be offering significant gains in roads and prisons but not in hospitals and schools" (Broadbent, et al., 2002, IPPR (2001) p.4).
However, the IPPR (2001 p. 90) states, "we will not know the actual outcomes for many years" and "settling the issue once and for all" is difficult at this point. The IPPR concludes that a "level playing field" is needed that has a " transparent set of public finance rules that do not set up artificial barriers or incentives to benefit one type of provision over another" (IPPR (2001) p. 95).
The Development of PFI in the NHS.
Basically, the PFI enables private sector involvement in the public sector for what is known as "long-term asset-based services." In many ways, the PFI is a small part of the broader New Public Management (NPM) (Broadbent, et al., 2002, Hood, 1991, 1995) agenda of efforts to expand the efficiency of the public sector through the introduction of organisational change and expertise provided by the private sector.
Prior to the creation of PFI in the health services industry, the main focus of NPM concentrated on controlling current expenditure in the public sector rather than infrastructure developments or finding new approaches to fund these developments (Broadbent, et al., 2002).
Lack of capital expenditure does not present the immediate political and social impacts that result from failing to meet revenue commitments. However, the ultimate effect of under-investment in capital stock is bound to increase over the years. Therefore, the accumulating effects have been an issue for the estate of the NHS for many years.
This pressure drew attention to the need for infrastructure investment and the need to keep public expenditure under control. These factors, combined with an ideological confidence in the efficiency of the private sector in the delivery of public services, led the Conservative Government to implement PFI in 1992.
Several years later, the New Labour Government furthered PFI initiatives, making several changes to the policies. This government supported PFI for many reasons. "First, the political imperative for partnership between the public and private sectors; second, that the quality of the public services can be improved by the private sector; and finally the possibility of investment in public services and infrastructure whilst maintaining a tight fiscal stance (Broadbent, et al., 2002)."
Since its initial implementation of new policies, the New Labour Government's justifications of PFI have become clearer to the public. However, many critics doubt the ability of PFI to yield value for money (vfm) and benefit the public..
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