“About half of a £2bn cash boost from the 2014 Autumn Statement for frontline health services in England was spent outside the NHS, research has found.
The Health Foundation analysis for the Financial Times showed £901m was spent on buying services from private and non-NHS providers in 2015/16.
It said £800m was spent buying the same kind of care from NHS trusts.
The government said it showed the NHS was “making clinical judgments about delivering high-quality care.
Ex-chancellor George Osborne said in his final Autumn Statement before the 2015 general election that the money for NHS England was a “down payment” on a plan drawn up by NHS bosses, which called for an extra £8bn a year above inflation by 2020.
‘Diverted’ patients
The Health Foundation report also found that £1 in every £8 of local commissioner’s budgets in England is spent on care provided by non-NHS organisations.
Anita Charlesworth, director of research and economics at the Health Foundation, said: “Rising demand for emergency care meant that NHS providers haven’t had the capacity to deliver planned care and patients had to be diverted outside the NHS.
“NHS hospitals were left squeezed by sharply rising drug and staff costs with little additional funding.
“The result was big deficits that had to be covered by raids on investment budgets.”
She said the NHS had to “urgently” consider how to ensure additional funds reach NHS providers.
“The health service needs to plan better for emergency demand, fund emergency care fairly and make sure it gets the best possible price for care provided outside the NHS,” she said.
The Department of Health said it spends less than 10% of its budget on independent providers.
A spokesman said: “This report simply shows the NHS is making clinical judgments about delivering high-quality care for patients.
“The truth is that for many years the independent sector has made a contribution to helping the NHS meet demand, now amounting to less than eight pence in every pound the NHS spends.”
East Devon Watch 
This is the story that George Osborne and now Theresa May and Jeremy Hunt would like you to believe – that the Conservatives have generously given £2bn to the NHS so that we can be treated. And this may be true. But the messages we need to remember are the following:
1. Most outsourcing organisations work on a 15%+ profit margin. I have experienced several outsourcing deals where the company takes its 15% first, and then provides the best service they can with what is left even if it doesn’t meet the contractual services levels – whilst these were not in the health field, and I have not read the NHS contracts this article talks about, that is the management mentality of outsourcers so it wouldn’t surprise me if it were true in the NHS too.
So that is £135m of our money that is already earmarked for the pockets of the owners of these companies rather than being spent on health care, perhaps before they even delivered one consultation or operation. But that’s privatisation for you.
(I should add that I do have experience in the NHS as well – and the contracts there were either so parsimonious that there was never enough money to perform the services properly, or some items were left out of the specification and the outsourcer was able to demand a premium price to deliver them – so even if the 15% off the top is not the case, it doesn’t mean that the contracts will work well.)
2. This is, of course, dwarfed by the £10bn – £30bn PER YEAR that is spent on the administration of these competed NHS contracts in order to allow private companies to bid. Now if THAT AMOUNT of money hadn’t been diverted into administration to satisfy Conservative party dogma, and was spent instead on health care, there really would not be a cash crisis in the NHS at all.
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