Treasury Now "More Open" To Private Investment In NHS: Matthew Taylor
6 min read
With the economy flatlining, the Treasury is increasingly open to private investment models to support the health service, NHS Confederation boss Matthew Taylor tells Sophie Church
When advocating for private sector investment in capital projects that benefit the NHS, Matthew Taylor admits he has “quite a lot of history”.
The outgoing NHS Confederation boss might be accused of understatement since, as a policy expert in Tony Blair’s Downing Street, he was closely involved in the roll-out of the private finance initiative (PFI).
That programme became increasingly controversial as some NHS trusts were saddled with unsustainable debts, but Taylor thinks the time has come to return to its principle – and says that, at last, the Treasury appears to agree.
I’d describe NHS England being cut as shoot first, answer questions later
“As an organisation, when I started here, we would often call for more money, call for more money all the time, and call for more money in winter because of winter pressures. We don’t really so much do that now, because we’re aware of the limitations,” Taylor, chief executive officer of health sector body, tells The House.
“We’re aware of how difficult it is for our colleagues in local government, in education, in policing, and that’s why we’ve been focusing on private investment slightly more than revenue funding, because this is about how it is you can bring new investment into the health service.”
Keir Starmer’s Labour government has shown willingness to collaborate with the private sector. But Taylor reveals the Treasury has grown far more interested in public-private partnerships in just the last few months.
“I’m sure that if [Health Secretary] Wes Streeting could find ways of bringing new capital into the health service, he’d very much like to, but the stumbling block is the Treasury, and Treasury rules,” he says. “My sense is that the Treasury is more open to this than they might have been a few months ago.”
Taylor points to the Welsh government’s new ‘Mutual Investment Model’, which is looking to source £1bn of capital infrastructure investment through public-private partnerships. The new Velindre Cancer Centre near Cardiff is due to open in 2027 thanks in part to this funding model.
“What I’d say is that there is a genuine Treasury openness to look at the international experience and to look at other examples,” Taylor says.
“I’m sensing an openness to learn from good practice and to look at the aspirations that certain hospitals have. For example, for mixed-use facilities, where you can bring in the private sector to build a facility which is used by the private sector for example, as a tech hub, but also where some of that space is available to the NHS.”
Taylor has returned to private financing consistently over his 35 year-long public policy career. Blair appointed him head of the Downing Street policy unit in 2003, in the middle of Labour’s private finance initiatives (PFIs) roll out. It was here he was tasked with writing Labour’s 2005 manifesto. He became chief adviser on strategy to Blair after the election.
Before working in government, Taylor ran left-leaning think tank the Institute for Public Policy Research (IPPR) for four years. He joined the NHS Confederation, which represents NHS commissioners and providers, in 2021.
At IPPR, Taylor argued that there should be no ideological resistance to the private sector providing clinical services for the NHS, which at the time was considered “extremely controversial”. But he was also “quite critical” of the PFI programme specifically, so “managed to annoy just about everybody”.
“I think we annoyed Gordon Brown, John Prescott, even Alan Milburn at the time, who was secretary of state for health and thought that we were being too radical,” he says.
“I’ve got quite a lot of history in this space and was acutely aware of some of the problems, in particular with the earlier generations of PFI deals. But that’s why I think it’s worth looking at this again, because I think we’ve learnt a lot.”
While government is warming to private finance schemes, Taylor tells The House the decision to abolish NHS England (NHSE) is having dire consequences in the sector.
This will see 9,000 administrative roles cut at both NHSE and the Department of Health and Social Care – roughly half of all jobs at both organisations.
“I understand the politics of it, but I think it’s been very, very tough,” he says. “We still have integrated care boards wanting to and needing to make redundancies in order to be able to fit within the very tight funding formula they’ve got, and not having those redundancy programmes signed off because the Treasury is not approving them.”
“I’d describe it as shoot first, answer questions later,” he adds. “It felt like the announcement was made, and now the full implications of that announcement are revealing themselves.”
The government’s decision will not only leave providers struggling to make savings, but may also jeopardise Labour’s 10-Year Health Plan – Labour’s strategy to modernise the NHS – he warns.
“I think the impact is on our ability, over the next three, four years, to both regain some ground towards national constitutional standards for health care, and at the same time for this government to be able to show by the time it gets to the next election that it’s made significant progress towards the goals in the 10-year plan.”
Taylor is more equivocal on Labour’s rapid adoption of AI in the health service. In certain areas, where GPs can use ambient voice technology to make notes during an appointment, it can be “transformative”, the NHS Confederation boss says.
But he adds: “Sometimes I think we can let our ambition get ahead of ensuring that we actually deliver change.”
“There were issues which NHSE had to flag up about the fact that, in terms of data security and stuff like that, sometimes the data from these systems was then processed in other parts of the world,” he says. “Patients really want to use this stuff. But if you said to them, ‘Would you mind your data being processed in another part of the world?’ They might say, ‘Well, hang on, we’re not so sure about that.’”
Whether it be through private investment, AI development or cutting red tape, Labour hopes its changes to the NHS will make it fit for the modern age. It’s a chapter Taylor will surely miss when he leaves the NHS Confederation in April next year.
“I came into this sector nearly five years ago, not knowing an enormous amount. I knew a lot about politics and public policy; I’ve had to learn a lot about health,” he says. “This job is the best job I’ve ever had.”
