Circle’s exit from Hinchingbrooke is a serious blow to competition in the NHS

This morning’s announcement by Circle that it will be leaving the contract to run Hinchingbrooke Hospital makes it even more difficult politically for anyone who believes in greater competition in the NHS to make their case.

Opponents of private sector involvement in healthcare provision will say – with good reason – that this shows you cannot trust anyone other than the public sector to stick with a hospital in the tough times. Proponents will point out that ultimately providers leaving is better than entrenched failure. But in a way Circle needed to perform in a way that was atypical of the market: I had to succeed and it had to sty the course of its contract. That it hasn’t puts back the case for markets in the health sector by a very long way. That case was – as Hugo points out in this week’s magazine – not really being made anyway, with politicians of all creeds preferring to talk about how little they are doing in the way of privatisation rather than bothering to explain why competition might be better than monopoly.

This might seem a confusing time for Andy Burnham, given he was Health Secretary when the contract for Hinchingbrooke ended up being contested by providers who were all private. Sure, one bidder had a partnership with an NHS trust, but the NHS was not leading that bid in any meaningful way. You can read the timeline here. But Burnham is repeatedly saying this morning that it was the Coalition who awarded the contract to Circle, and that is true, though from the pool of providers narrowed down on Burnham’s watch.

Anyway, Burnham has since said that he now thinks that his Labour government placed too much of an emphasis on the market in the NHS, which justifies his trenchant opposition to the private sector now. Circle is a gift to him and a serious blow for those who had hoped Circle could make the case that the most important thing in healthcare is what works, rather than who provides. Voters will now conclude that what works does not include private providers, and because no politician has dared advance any rigorous argument in favour of private sector involvement for a long time, they will her precious few voices objecting to that conclusion.