Peter Hoskin

Avoiding the Burnham Disincentive

Avoiding the Burnham Disincentive
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One story which has been rumbling along in the background of Ashcroft and Chilcot – and, indeed, over the past few months – is the fallout from Andy Burnham's claim that NHS bodies are now the state's "preferred provider" of healthcare in this country. With those two words, in a speech last September, the Health Secretary appears to have pulled the process of reform back a few years – as private and voluntary sector providers have tried desperately to back out of a process which they now feel is weighted, impossibly, against then.

Anyway, I'd recommend that you check out Nick Timmins' excellent coverage of the latest develoments over at the FT. Here's an excerpt from a blog post he wrote yesterday which demonstrates just how destructive Bunham's words have been:

"But 'preferred provider' also cuts across other government policies. Peter Kyle, deputy chief executive of Acevo, which represents voluntary organisations, points out that both Gordon Brown, the prime minister, and the Conservatives are encouraging NHS staff to formally quit the service and sell their services back through social enterprises.

The 'preferred provider' approach, Mr Kyle points out, heavily limits the chances that if they do so, they will then be able to grow their businesses.

'Preferred provider' means that staff will 'clearly think more than twice before they leave the safety of the statutory sector,' Mr Kyle says. As proof of that, Acevo claims that across London, some 17 expressions of interest by staff in forming a social enterprise promptly dropped to two after Mr Burnham made his original speech in September outlining the preferred provider approach." There's a simple, clear lesson for the Tories here. If they really want their decentralising agenda – from social enterprises to free schools – to get off the ground, then they've generally got to avoid backing any one provider with too much gusto. Otherwise they're risking what should forever more be known as the Burnham Disincentive.