You quote David Cameron as saying he wanted to “turn the NHS into a fantastic business” (Private NHS providers in line for tax cut, 14 January). The NHS was not conceived as “a business” but as a service for everyone in the UK, free at the point of delivery. A business will, rightly as a business, seek to provide a good profit and return on investments.
Yes, the NHS faces difficult decisions – such as where should be the boundary between free treatment and conditions that should be paid for (eg some cosmetic procedures). But improvement to the operation and efficiency of an organisation is likely to be best achieved using knowledge and resources already within that organisation – not by turning part or all of it into private business activities.
If companies want to offer health treatment facilities, fine, and there is a need for that. But that is done on a business model, within a business environment – and that includes paying VAT and corporation tax. It is not a “level playing field” to compare an organisation, such as the NHS or a charity, with a business.
•?Your article inaccurately states that Monitor has written a draft of the Fair Playing Review report “sympathetic to the private sector demands” for exemption from corporation tax on profits made from NHS services. The article quotes a source claiming to have seen a draft of the final review, when in fact no such draft has been written.
Monitor has received representations concerning tax from providers from the charitable sector as well as the private sector. In addition we have received representations that other factors disadvantage the public sector, such as complying with FOI requirements or employee benefits. We have had responses and held detailed conversations with providers from all sectors and we are taking time to analyse the evidence before drawing our final conclusions.
The secretary of state asked Monitor to undertake the Fair Playing Field review as an independent report. It will report at the end of March. Monitor has a statutory duty to promote and protect the interests of patients and any suggestion that we are working on behalf of the private sector misrepresents our core duty.
Dr David Bennett
Chief executive, Monitor
•?Social enterprises are not to be conflated with private firms that distribute profits to shareholders. While some employee-owned businesses are social enterprises, many, including Circle Healthcare, are not. Social enterprises exist for the people – they reinvest their profits to improve patient care, have strong track records of delivering health services and are accountable to the taxpayer. As health markets are opened up to competition, it’s crucial that the distinction is clear in the minds of the public and commissioners.
Chief executive, Social Enterprise UK
•?Paying corporation tax seems to be a more than fair exchange for the opportunity to make a profit off the back of medical staff whose degrees were funded by the taxpayer. There is no shortage of private companies bidding for NHS contracts under the current terms, so no “incentive” is required; tax breaks would be a cynical misuse of public money earmarked for the NHS.
•?The NHS has professional and educational development responsibilities for doctors, nurses and all healthcare staff, all of which is a hidden cost. If there were a professional education and development tax on all former NHS staff working in the private sector, related to their years of pre- and post-qualifying training, this would be a fairer playing field.
Professor Colin Pritchard
•?Reports that the government wants to give tax breaks for private companies in the NHS come as no surprise to those like UCU fighting similar plans in higher education. Private companies have been lobbying hard for the VAT exemption granted to charitable universities and colleges. We must stop the government indulging in yet more corporate welfare at the expense of public services.
General secretary, University and College Union