Tuesday 1 January 2013

Lord Blackwell - How His Vote Opened New Opportunities for Interserve

Lord Blackwell
A company led by a Conservative Lord has just expanded into a new lucrative area of healthcare, made possible by the Health & Social Care Act.  The noble Chairman spoke and voted in favour of the bill, opening new avenues for the company he serves.

On June 14th, 2011, The House of Lords met for a statement made by the Parliamentary Under Secretary of State at the Department of Health, Earl Howe, to mark the end of the now discredited ‘listening exercise’, set up by the government as a response to the near total discontent to their Health bill.

Following the opening statement, Conservative Peer, Lord Blackwell spoke of his concern at the direction the Health and Social Care bill was taking, and sought reassurances that the Health bill was heading in the direction that would open up large parts of the NHS for sale:

‘Can he (Earl Howe) elaborate a little more on the development of competition and choice to which he referred? Can I take it from what my noble friend has said that the Government continue to believe that competition and choice are key drivers of improving the interests of patients and quality in the health service?...how will the phasing of the introduction or further expansion of alternative providers evolve in a way that will give those alternative providers the confidence to make the investments necessary so that they can play their full part in providing quality services under the NHS?’

Lord Blackwell’s concern over competition was insincere, and was a question asked in his role as Chairman of construction and consultancy company, Interserve, where he has been in charge since 2006. He knew that once the Health and Social Care bill became an Act, the company, whose UK revenue largely comes from public sector contracts, would be in a strong position to take advantage of the inevitable contracts that would emerge from the NHS sell off.

Interserve is heavily involved in Public Finance Initiatives and Public Private Partnerships agreements, with contracts in Education, Justice, Defence and Health worth £2.36bn. The Health sector makes up over half of their revenue with contracts worth £1.269bn, all contributing to profits before tax in 2012, of £67.1m. An income that is set to increase thanks to a new contract awarded in December 2012, to run 550 NHS buildings in the area of Leicestershire and Rutland.

However, it is a recent purchase by Interserve of homecare company Advantage Healthcare for £26.5m that has marked a change in departure to their usual line of work and highlights the failure of the Rules that govern the behaviour of the upper chamber’s members.

The company’s move towards the community care market makes perfect business sense, as it was a key component of the Health bill, and there is thought to be around £10bn up for grabs in the community care market. Advantage health itself, provide social workers, medical staff and palliative nurses to NHS Trusts, with profits before tax of £41 million, an amount the CEO of Interserve expects to see increase.

"We see the healthcare and care at home sector as key growth markets and this acquisition both expands our capability, while also being a further step towards delivering the group's medium term strategy of greater front-line service provision.”

Lord Blackwell’s words of concern for ‘competition’ when speaking in the House of Lords was followed up by his votes, which he was able to make despite these clear conflicts of interest; and this he did loyally with the government in all key divisions of the Health and Social Care bill.

Lord Blackwell who was Head of the Prime Minister's policy unit under John Major from 1995 to 1997 and was previously a member of Margaret Thatcher's policy unit, was also a partner with McKinsey and Company, between 1978 and 1994. McKinsey were responsible for writing parts of the Health bill, and were the organisation who came up with the sum of £20bn in savings and cuts the NHS is now undergoing.

If there is any truth to the phrase, action speaks louder than words, then the deeds of Lord Blackwell clearly place him in the corporate camp. The House of Lords is meant to check and challenge any law that emerges from the House of Commons. Yet, if Lord Blackwell’s only contribution is to question where the money is coming from on behalf of his employer, and then voting for the benefit of his corporate employer, what is the point of his ‘noble’ existence? Interserve are making lots of money from the public purse through the utterly false and damaging economy of PFI. Now, an additional £300 million in contracts is being added to their already bulging portfolio, with a loss of jobs a real possibility.

Lord Blackwell’s contempt for the NHS was made abundantly clear when he produced a joint paper for the Conservative think thank, the Centre for Policy Studies, titled: ‘Better Healthcare for All.’  With no irony whatsoever he wrote:

It is the most vulnerable who suffer at the hands of the NHS. The system inevitably distributes its resources not according to who needs its services most, but by…special interest groups who can best manipulate the system.’

Now Interserve has expanded into a new area of community healthcare, new opportunities made possible by the Act on which their Chairman voted. An Act part written by business consultancy giant Mckinsey & Co who also came up with the £20bn cuts and savings the NHS is now forced to make. All he has done is turn up, ask questions on behalf of his employer, voted and buggered off again. Lord Blackwell, a former partner of McKinsey should not only have been unable to vote, but should not be a Lord at all.

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