2 NHS LIFT and the New Shape of Neoliberal Welfare

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    DOI: 10.1177/0309816808095001022008 32: 31Capital & Class

    Rachel AldredNHS LIFT and the new shape of neoliberal welfare

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    The NHS LIFT (local improvement finance trust) programme is a new formof privatisation of UK primary care, based on the private finance initiativebut going beyond it in important ways. It covers half of all English primarycare trusts, and the approach has also been extended into education (theBuilding Schools for the Future programme). The LIFT model embedsmultinational capital and corporate forms into UK primary care and affectsboth staff and services, but challenges to it have been patchy and low-key.There is a need to theorise what this new development means for publicservices, and to examine the potential for resistance to it.

    This paper discusses the NHS LIFT (local improvementfinance trust) programme as an indicator of current trends in

    neoliberal welfare. LIFT, a new form of publicprivatepartnership (PPP), offers an even more radical vision of serviceprivatisation than does the private finance initiative (PFI). Thecompany originally tasked with rolling out the LIFT programme,Partnerships for Health, claimed that LIFT would represent a truepartnership in every sense of the word. A senior manager at theorganisation told me in an interview that where PFI had createdadversarial relationships between the public and private sectors,LIFT gives corporations a seat at the planning table.

    LIFT, like PPP more generally, forms part of the neoliberalwelfare reconfigurations in the UK and elsewhere, creating newexclusions and new elites. Its birth and rapid growth are rooted in

    1. Introduction

    NHS LIFT and the new shapeof neoliberal welfareRachel Aldred

    Abstract

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    corporate power and the state-supported development andconsolidation of new markets. When the UK National HealthService was created in , elite consultants were seen as the majorcountervailing power and were generously compensated for the

    encroachment on their business. Now, multinational companiespharmaceutical firms, insurers, private medical providers,construction and service companiestower over increasinglyembattled publicly run health services and the clinicians operatingwithin or even outside them. LIFT is a key organisational formallowing these companies unprecedented access to public-serviceprovision, and theorising LIFT helps us to understand the changingface of neoliberal welfare in more general terms.

    This article discusses five major issues surrounding neoliberalwelfare as exemplified in the shift to LIFT-type models. These are:

    1. The development of new elite networks and identities. This isimportant in allowing a shift away from a traditional ideology ofcivil service neutrality and towards a discourse that celebratesdouble-hattingthe possession of multiple roles. The newdiscourse of leadership justifies a revolving-door culture that nolonger attempts to clearly demarcate representatives of the statefrom those of capital.

    2. Conflicts of interest between large and small capital (including,in the latter, GPs). LIFT represents a corporatisation of welfare,rather than simply a shift from the formally public sector to theformally private sector. GPs, with their (however problematic)embeddedness within local health systems, are replaced bymultinational corporations organised into consortia. Thiscreates proletarianising pressures upon clinicians.

    3. The multiple meanings of privatisation (and the related termscommodification and marketisation). LIFT must be defined asrepresenting both commodification and privatisation; however,

    LIFT companies led by large banks replace rather than createcompetitive markets. Public services are being remade in theimage ofand interests offinancial institutions.

    4. The status and meaning of flexibility, innovation, and risk-taking within these new power complexes. Service privatisationis often justified by the equation of private companies with theseneoliberal virtues. However, LIFTs model blocks localinitiatives and entrepreneurship, imposing instead a remote,bureaucratic and inflexible outsourcing.

    5. The changing but still troubled relationship between capitalistaccumulation and the legitimation of the capitalist system.LIFTs ineffective structures create renewed legitimation

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    problems, and the system cannot easily be steered. Research intoLIFT found high levels of private discontent within local NHSmanagement.

    The article concludes by linking these themes, and by consideringtheir implications for activists challenging neoliberal welfare.Additional themes not considered here include the topic ofsurveillance and that of welfare as punitiveas yet less prominentwithin LIFT, but of deserved interest to critical analysts.

    2.1 Theories of the welfare state

    What are the likely repercussions of a shift to neoliberal forms ofwelfare? This section reviews some of the salient critical literaturein order to discuss neoliberal claims, aims and practices, and buildson influential Marxist analyses of the welfare state (e.g. OConnor,; Gough, ; Offe, ). While some of these models can beover-functionalist, they usefully move beyond a focus on the cost ofwelfare to examine why money is being spent, and where it is going.This is particularly important in the context of NHS reform,where the government claims that increased spending means thatany problems must be the responsibility of inefficient public-sector managers, greedy staff or irresponsible service users.

    OConnor identified two sometimes conflicting objectives forwelfare policy: the establishment of favourable conditions forcapital accumulation, and ensuring popular legitimation for thecapitalist system. Under the first category come the kinds ofprojects and services that increase labour productivity or lower thesocial costs of reproduction. These functions are indirectly

    productive for capital (Gough, ), providing goods and servicesthat while not directly profitable, allow private firms an increasedrate of profit. The second objective, social expenses (or socialcontrol), is not productive for capital but helps to ideologicallyenrol workers into the system. The NHS, with its longstandingpublic support and traditional focus on curative medicine(primarily servicing the workforce, while those seen as non-productive receive Cinderella services), can be seen to fulfil bothcriteria. But settlements depend on struggle and are unstable. Even

    the first objective can have a tenuous existence: in the short run,firms want lower taxes, but long-term competitiveness may dependon state services (Pfaller, Gough & Therborn, ).

    2. The road to neoliberal welfare

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    State support for accumulation is direct as well as indirect, andthis duality is increasingly salientand problematic. As well asindirectly improving conditions for capitalist accumulation generally(providing road infrastructure, publicly organised education, etc.),

    traditional public procurement directly provided profits forindividual firms. Even within UK welfare-state provision at its mostpublic, many goods were provided by private companies (e.g.buildings, pharmaceuticals, roads, etc.) while related services wereoften provided publicly. This division is perhaps clearest in the NHS.Since the post-war British economy was based on manufacturing,private service provision was then relatively small and weak, andpublic provision in these areas was not experienced as a major threatto capitalist interests. However, current developments in welfareencourage the extension of direct accumulation as the service sectorgrows and its firms demand a share of public-sector expenditurethe state as client, rather than as competitor.

    2.2 From Keynesianism to neoliberal welfare

    This pressure from the private sector has been part of a growingchallenge to the welfare state since the end of the long boom(Ferguson et al., ). Its legitimacy has been undermined bothfrom the left and the right. An example of the latter is thereconceptualisation of public-sector employees as knaves, notknights (Le Grand, ). Meanwhile, the welfare state has comeunder attack for hampering accumulation, rather than supporting it.Thatcher spoke of a dependency culture created by welfarebenefits, while New Labour valorises entrepreneurialism andportrays public-sector staff as inefficient and unproductive. Fromthe late-1970s onwards, writers of very different persuasions in theUK and other countries have concurred in the view that the welfarestate is in crisis.

    For neoliberals, welfare privatisation promises to solve problemsof accumulation andlegitimation. Breaking the power of the tradeunions enabledand was enabled bythe establishment ofneoliberal welfare. Outsourcing contributed to the decline in unionmembership in s Britain, as a public-sector culture thattolerated unionism was replaced by a private-sector culture thatviewed it as a block to higher profits. Since the threat ofoutsourcing often secured concessions from labour, the publicsector itself changed as a result (Whitfield, 2001). Encouraging

    service users to see themselves as customers, atomising andindividualising them, was another way of breaking the welfaredeadlock in terms favourable to capital (McGregor, )

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    although as OConnor () points out, consumerism can be asource of (contradictory) resistance.

    Justified by market rhetoric, the practice of neoliberal welfareinvolves the financialisation of service provision as a central

    element (Cutler, ). Whether or not actual markets are created,and whether or not provision is shifted to a private-sector provider,goods, services, staff and service users are reconceptualised withina commodified discourse. For example, references to a local healtheconomy may replace references to the NHS or the public sectorin documents about primary care provision (Aldred, ). Leys(2003) outlines four conditions for financialisation: firstly, goods orservices must be commodifiable (i.e. constructed as quantifiable andexchangeable); second, the public must be persuaded to want themas commodities; third, the labour force must be transformed; andfinally, the state must absorb risk through direct subsidies. Thusneoliberal welfare produces distinct strategies to aid accumulation(through further attacks on labour, state support for firms, and theinstitution or increase of individual charges for services or goods)and legitimation (the justification of changes by the presentation ofcommodified services as natural, such as the downgrading ofclinicianpatient relationships and the conceptualisation ofprimary healthcare as a series of discrete, countable, anonymousinterventions).

    Many critics (e.g. Pollock, ; Edwards & Shaoul, ) haveargued convincingly that neoliberal welfare should be seen asgenerating externalitiestransferring rather than cutting costs. Forexample, when outsourcing is used to cut the wages of already low-paid workers, the result is less tax going into the public purse andmore employees dependent on means-tested benefits. Whileneoliberals claim that privatisation creates or adds value, it hasactually redistributed income from individuals and from the state(and sometimes from other capitalists) towards favoured firms. In

    the short term, although this has failed to remedy low growth rates,it has helped capital to increase its share of national income.

    The UK government has embraced an overt shift in its role, fromarbitrating between companies to representing particular businessinterests as the national interest (Flynn, ). Yet this aggravatesthe tension between welfare as directly productive and welfare asindirectly productive. While the former has always been acomponent of the welfare state, neoliberal policies produce a dualprivatisation movement (Ellison, ), prioritising direct profit-

    making and shifting the costs associated with social reproductiononto individuals or their employers. This can cause conflictsbetween firms directly benefiting from welfare contracts and firms

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    feeling the effects of service withdrawal. For example, PFI dealsoften move hospitals and health centres out of town to greenfieldsites, which are more difficult to access and may result in workersneeding to take more time off for medical visits.

    Moreover, this new accumulation regime may generatelegitimation crises if it is perceived as benefiting a group of firms atthe expense of individuals or the nation. One potential resolutionmight be the creation of new company towns in which businessesembed themselves in their local areas and produce localised services(Harvey, ), and this model seems to have informed the thinkingbehind LIFT (see below). Another response has been thedevelopment of complex models of privatisation and the promotionof welfare reform as generating plurality rather than privatisation,partnership rather than profit (Ling, ). Additional legitimationclaims are based around the argument that privatisation enablesinnovation, flexibility and risk-taking. In PFI-based privatisationmodels, it is the risk transfer element that justifies their use, enablinginitially more expensive schemes to appear cheaper.

    2.3 The PFI model: Design, build, finance and operate

    Except in Wales,1 PFI is practically the route for the publicprocurement of UK hospitals (and many other new buildings); andits descendant LIFT is becoming the dominant method for newprimary care developments in England. But PFIs beginnings wereunpromising. The then Conservative government created PFI in, while Labour opposed it. Progress was slow, and when Labourwas elected in , only a handful of projects were underway(Whitfield, ). However, perhaps in order to signify its business-friendly credentials, the new government swiftly transformed PFIinto the procurement route of choice for public-sector capitalprojects.

    PFIs novelty rests on its bundling of design, construction andoperational services into one long-term contract, financed byprivate borrowing repaid yearly over decades through a unitaryservice charge. At the end of the contract, buildings will usuallyrevert to the public sectora concession to critics. Traditionally,public-sector capital projects were built and designed by theprivate sector, and increasingly support services are run by theprivate sector. However, PFIs impact is not merely due to theaddition of private finance. It is creating a consolidated industry in

    which large private firms (financiers, construction companies andservice providers) collaborate in consortia, creating complex, state-supported oligopolies (Pollock, ).

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    These firms are gaining long-term control over the ownership ofpublic buildings (through share sales and debt transfer), and overthe way these buildings are managed and run (through the award ofsub-contracts). Instead of paying a one-off cost for an asset, the

    public sector enters into a long-term service contract, giving theasset owners a long-term, government-backed cash flow. This isproving popular with pension funds and private equity vehicles thatspecialise in the secondary market, since once the asset has beenbuilt, the contract becomes extremely low risk. Over the remainingyears of the contract, the owner may refinance bank debt, cut costson maintenance and support services, and/or persuade the publicsector to pay more than the originally agreed annual charge. Noneof these strategies is possible in traditional public procurement orthrough short-term contracting for individual services.

    PFI is complex, and public-sector managers must acceptresponsibility for problems while often lacking knowledge of thelegal complexities. Special purpose vehicles (SPVs)limited-liability PFI consortiaare typically composed of a constructioncompany, financial institutions and a facilities-maintenancecompany. The SPV contracts with the public body, sub-contractingwork to other companies which are often sister companies toconsortium members. Open competition is limited to theinvolvement of usually around three (but sometimes fewer)consortia, which submit bids at the start of the tendering process.Opportunities for contestability are low given the complex andnetworked relationships between a relatively small number ofcompanies, which now comprise the market for publicprocurement. As far as the public body is concerned, any suchcompetition or contestability would generally only occur at thebeginning of the contract; and if extra work arises relating to theassets, it must usually be offered to the existing contractor.

    PFI represents a political compromise, just as the NHSs

    popularity initially prevented the privatisation of jobs such asthose of doctors and nurses. Thus PFI contracts exclude corestaff, who remain in the public sector. Definitions of core andsupport are flexible: in the NHS, support workers can includesome clinical services, such as pathology. Generally, the core hasmeant the most powerful professional group(s): teachers in PFIschools, and doctors and nurses in PFI hospitals, as well as themanagers and administrative staff that support them. As criticshave charged, this has led to the degradation of support services

    such as the provision of school meals, which are no longer seen asessential and can be sweated alongside the rest of the PFIcontract, in the industrys words (Halligan, ).2 However, the

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    core/periphery distinction is unstable, and core services areincreasingly targeted.

    2.4 LIFT: Partnership beyond PFI

    The NHS local improvement finance trust (LIFT) covers half ofall English NHS primary care trusts (PCTs).3 It is a development ofthe PFI model for primary care premises, and has already spawneda related model in the education sector, Building Schools for theFuture. LIFT will mean that GP surgeries and health centres willshift from being largely owned by GPs and the NHS to corporateownership: currently, three in five surgeries are owned byindividual GPs, and one in five by the NHS. Like PFI, LIFTinvolves the letting of buildings and attached services to the publicsector by the private sector. LIFT is complex, and its structure canonly be sketched out here: for more information, please see myreport for UNISON ().

    In each of fifty-one LIFT localities, a twenty-year strategicpartnering agreement will be made between a group of local NHStrusts and a consortium known as a LIFT company. Theagreement includes an exclusivity clause so that over the life of theagreement, a local LIFT company will have sole rights to developany new primary-care premises in its area. It will then lease out thebuildings over twenty-five years to service providers, whileproviding some support services as per the PFI model. Importantly,while in PFI a project company manages a project, LIFT willinclude buildings we havent even thought of yet, as oneinterviewee commented. A public-sector representative sits oneach LIFT company board, and private-sector personnel join withpublic-sector managers on the strategic partnering boards set upto plan local primary healthcare provision.

    LIFT mandates a public-sector shareholding, which means that

    local NHS trusts purchase a per cent stake in their LIFTcompany. Another 20 per cent belongs to the national agencyPartnerships UK (until recently itself also a PPP, now renamedCommunity Health Partnerships), and the remaining 60 per cent tothe institutional investors. These generally comprise a financialinstitution, a support services company and a constructioncompany. Thus LIFT represents a substantial change in theprovision of primary-care accommodation, albeit one that will takeplace gradually. For example, primary-care-trust maintenance

    departments are likely to transfer over time to the support-servicescompany involved, but this will not happen with the signing of theinitial contract. Similarly, clinical and other support services, and

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    even services currently run by local authorities, might transfer inthe future, and trusts are encouraged to consider transferringexisting buildings into the LIFT portfolio.

    The data used here derives from research into LIFT at national

    and local levels. Following effective quantitative critiques of PFI(e.g. Pollock, ), the justification of welfare-reform policiesshifted onto a qualitative level. The National Audit Offices reporton LIFT () eschewed the calculation of public-sectorcomparators for talk of the qualitative benefits of working inpartnership.

    I decided to use critical ethnographic research in order tounderstand and analyse these professed cultural changes. Theapproach drew on Marcuss () concept of the multi-site casestudy, in which detailed investigation may follow an object, ratherthan a group of people. This is appropriate for LIFT, since eachpolicy object creates relationships between people in numerousorganisations, public and private, and complex financialtransactions.

    At the start of the investigation, most LIFT schemes were atearly stages, and the case-study research focused on one relativelyadvanced LIFT area, referred to here as Wellston, since theanonymity of people and local organisations was a condition ofthe case-study research. A range of strategies were employed toincrease the validity of the study. First, I viewed the research as anembedded case study (Yin, ), using inter-case comparisonsbetween organisations in Wellston; and I collected and analyseddata at a national level in order to gain understanding of theprogramme as a whole. Second, I conducted more limitedinvestigations into three comparator areas. One of these had beensuggested to me as a positive examplea success; one as a negativeexamplea failure; and the third contained a prominent insidercritic of LIFT.

    In addition, triangulation was used at the method level. Theresearch involved over thirty observations of local and nationalmeetings and events and a similar number of interviews withinformants, from senior managers at Partnerships for Healththeagency leading the national programmeto clinicians, localprivate-sector personnel, and middle-level managers fromWellstons four NHS trusts.

    Relevant documents were analysed for content and discursivepatterns, and LIFTs local and national structures were studied.

    These strategies allowed me to be reasonably confident about thevalue of the patterns I was identifying from my data. Moreover, thevalue of the data reaches beyond the particular policy area: I argue

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    that the LIFT model represents a new stage in the neoliberalrestructuring of welfare.4

    3.1 The new elites: Bridging the public and private sectors

    LIFT has enabled and reinforced new elite networks dominated bysenior public and private-sector executive managers. Thesedominated the national LIFT forums that I attended. Relatively fewnon-executive NHS trust directors or clinicians attended, and evenfewer patient representatives. Such structures bypass the traditionalclinical governance that incorporates a layer of GPs and otherprofessionals, instead involving representatives of large privatecorporations. The perceived independence of clinical judgement isunder threat from this publicprivate elite. LIFT further sidelinestraditionally marginalised patient organisations: in my main case-study area, they were unaware of its existence, and they did notattend the high-level strategic partnering board meetings.

    The new publicprivate elites are marginalising old conceptionsof public-sector duty and independence, replacing civil servantswith double-hatters whose conflicts of interest are no longerregarded as embarrassing but as a source of pride (Aldred, ).Ironically, this is happening at a time in which WTO and EUmarket regulations are being brought in that emphasise non-discrimination between service providers. However, PPP modelseffectively outsource commissioning to private-sectororganisations, absolving those who commission public services ofthe responsibility to follow public-sector commissioningregulations (and other public-sector regulations relating tofreedom of information, etc.).

    An infrastructure has developed to support the PPP/PFIcommunity, with private meetings and conferences in which seniorpublic- and private-sector managers come together nationally andlocally. This provides a practical basis for state elites to see thenational interest as essentially identical to the PPP/PFI industrysinterests. For example, Sir John Bourn, the UK auditor general, toldthe industrys PPP forum in that the National Audit Officewould make our contribution to your success, and your success isthe success of the community at large; and that the National

    Audit Office will be with you all, public sector and private sector, inmaking further success into this century of PFI and PPP. Bournargued that the role of the auditor has shifted, and that he or she

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    3. Theorising LIFT

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    should no longer evaluate whether policies meet stated governmentobjectives. Instead, the audit office's independence should lie in itsability to objectively improve and refine programmes, rather thanin assessing them. According to this logic, the NAO should not be

    expected to state that LIFT might conflict with governmentobjectives to provide greater choice for patients, for example.Instead, it should make recommendations to ensure that policiesare an even greater success.

    Characteristically, the design, promotion, and management ofLIFT as a national policy were entrusted not to the state itself, butto a part-privatised quango, Partnerships for Health.5 The chiefexecutives of both Partnerships for Health and its then-parent body,Partnerships UK, were exemplary double-hatters. One, a charteredengineer, comes from a construction industry and PFI background;the other was a senior financier working for multinational institutionson PPP projects in the UK. Part of their significance is the way inwhich they have brought together major finance and constructionfirms with the active support of government.

    Like these two senior executives, many key players have little orno health-sector experience, although others have worked in theNHS and/or in the private healthcare industry. While Partnershipsfor Health displayed a private-sector orientation and promoted thebenefits of cooperative working and partnership with the privatesector, it was located within the Department of Health building. Itcould thus be seen as symbolising contemporary UK welfaregovernance: the state as not so much lean, but as constructingcomplex, quasi-private layers within itself . New bureaucratic layersmay create obstacles and inefficiencies, but they can also act toexclude outsiders, bind insiders together, and obstruct the scrutinyof government.

    As Leys () argues, elite networks have become both broaderand narrower: narrowing the gap between public and private and

    including more multinational players, but excluding professionalsand lower-level elected representatives. Under LIFT, partnershipwith private corporations replaces partnership with GPs. In anearlier piece (Aldred, ), I argue that this creates closed policynetworks and broken chains of communication. Actors such asGPs and service users are excluded, rather than being co-opted as(respectively) businesspeople and consumers. The multipleidentities (and financial interests) promoted by the double-hattersare, like large public procurement projects, effectively limited to

    the elite. Their rejection of professional knowledge in favour ofprivate-sector mystique is epitomised in this comment by afinancier working on the Wellston LIFT:

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    Im not sure what I have a background in really. Ive beendoing this job, obviously, I spend a lot of time with healthpeople. Do I have a formal, professional qualification in med-icine and all that kind of stuffabsolutely no way, none

    whatsoever. I mean, my father was a GP [laughs], but thatsgot nothing at all to do with it.

    3.2 Centralising capital and proletarianising professionals

    During the past twenty years of NHS reform, the medical professionhas been under increasing pressure, from the Griffiths report (whichrecommended the introduction of general management) to therecent withdrawal of professional self-regulation. In primary care,most doctors are both professionals and petty capitalists, paid fromthe profits of their practices, and this fitted within a broaderstructure that saw most GPs organised as independent contractors,selling their services to the NHS. This stabilised the system for sometime, at the cost of long-term underinvestment (Pollock, 2004). Theend of this period was heralded by the new GPs contract. Thecontract, offering a large pay rise and an end to responsibility for out-of-hours care, seemed like an excellent deal for practitioners. Thedouble-edged sword is that GPs are losing the traditional basis fortheir particular professional status: the provision of personal, one-to-one care, day or night (Berger & Mohr, ).

    Trends towards larger primary-care centres, including some runby private companies employing salaried GPs, will reduce GPshistorically high levels of autonomy. New contracts prioritise themeeting of targets, and an increasing proportion of practiceincome now comes from these payments, which use financialincentives to direct GP activity rather than the more traditionalcapitation income. In removing practice ownership from GPs,LIFT itself is part of a trend towards greater managerial control

    over GP labour. Like out-of-hours care, practice ownership hasoften been experienced by GPs as a burden; yet it provided themwith a form of control over their labour not available to otherprofessionals.

    In almost all the LIFT areas, private sector partners arenational or multinational corporations. In Wellston, the banks hadrefused to engage one of the smaller building companies alreadyknown to the local NHS, and so a national company had beenchosen. The opening-up of GP services to large companies

    demonstrates the interests behind the plurality agenda, and thelimits of market discourse. If the government merely favouredprivate ownership per se, the existing patchwork of small GPs

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    surgeries would surely seem ideal, and perhaps it would merelyabolish catchment areas, thus freeing up the market in GP services.However, the interests of large firms and particularly those withinthe PFI/PPP industry are the key to neoliberal welfare reform. PFI

    and LIFT are both resulting in the centralisation and co-location ofdiverse services, often in out-of-town sites. Whether this is moreaccessible, particularly for people without private transport, isdebatable. But it suits large companies, which do not want to dealwith what a LIFT company manager described to me as itty-bittycontracts.

    Part of the justification for the new arrangements is the claimthat the NHS was monolithic before them, and that a diversity ofproviders can break down such bureaucratic silos. Academiccommentators have accepted some of this conventional wisdom.The otherwise balanced literature review by Ferlie and McGovern(2003) characterises NHS governance as traditionallybureaucratic, despite the structure of general-practitioner serviceprovision historically. This small business/professional model hadits drawbacks, but it hardly represented classic bureaucracy. LIFTdemonstrates the inadequacy of equating a pre-reform NHS withmonolithic bureaucracy: as GPs interviewed pointed out, LIFT isarguably more top-down and bureaucratic than the often ratherfragmented system it is replacing (see 3.4, below). One mightsuspect that GPs are losing out because while they are formallyprivate, they are not corporate, generally working instead within asmall-business model governed by professional ideology orindividual gain, but not by share prices.

    As befits an era in which supermarket executives advisegovernments on health services, the LIFT surgery of the future iswhat the Department of Health calls a one-stop shopasupermarketised concept, just like the rebranding of libraries asideas stores. It will have around ten GPs and a range of income-

    generating services, from leisure centres to social services to retailunits. This turns individual GPs into one among many serviceproviders, within buildings they neither own or control.6 While themarginalisation of staff and service users initially enablescontracts to move forward relatively speedily, it creates longer-term problems and instabilities. In Wellston, most GPs weresceptical or opposed, and the one GP who had initially spoken outin favour of LIFT admitted to disillusionment. Instead of allowingGPs to act entrepreneurially and reap financial and status rewards,

    financialisation privileged the position and expertise held byfinanciers and managers. As the aforementioned GP said, Most ofLIFT is quite high level finance discussion. That was done by the

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    estates department, or people that theyd got in to do that. Waybeyond my understanding.

    While public-sector professionals are officially urged to becomeentrepreneurial, the corporatisation of welfare discourages this.

    LIFT marks a shift away from GP owner-occupation towardstenancy; and GPs are becoming more like employees thanbusiness-people. An initial plan to offer GPs shares in LIFTcompanies has not materialised, and GPs in Wellston complainedthat the LIFT-company ownership of premises made it expensiveand difficult for them to change and develop their services.Building alterations, however minor, had to go through the LIFTprocess whereas previously, GPs would have been able to obtaincompeting quotes from three local companies. GPs argued that thisstifled their autonomy and their control over service provision. Asthe GPs representative on the local medical committee told me,The problem is that things change all the time. A viable, thinkingpractice is going to keep changing. They have to have the fluidityto change quickly.

    Here, despite the claims to entrepreneurialism often made inpro-privatisation discourse, large corporations are replacing GPs,who after all are also small business-people and thus more easilycast as entrepreneurs than big bureaucracies. The state is playing akey role in organising the centralisation of capital: under the aegisof successive Labour administrations, it has created a PPP industrymade up of major firms acting together in consortia. One aim ofthe creation of this industry is to increase managerial control overGPs, and this goal was clearly recognised by all the interviewees(Aldred, ). While GPs are unlikely to become fullyproletarianised, the changes in their labour process means that theyare becoming more like other professional employees, and losingthe clinical autonomy and control over premises that long set themapart from other professionals such as teachers.

    3.3 Commodification: But where is the marketand the competition?

    The definitions of privatisation practices are contested. Dependingon the audience, Britains New Labour government still sometimeswants to claim that it is not privatisingwith LIFT, it uses the factthat many GP surgeries are already in private hands. But in practice,LIFT is privatising NHS facilities: in the areas that I studied, initial

    schemes transfer NHS sites to private ownership. Second, theprivate/public divide is not purely legal but should be understoodsocially and historically, involving formal or informal rights. In

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    eighteenth-century England, employers fought to ensure thattheir cloth was seen as theirs, and not something over which textileworkers had customary rights (Linebaugh, ). Traditional GPownership may legally be private, but covenants often ensure that

    buildings can only be used for NHS services. Tied to the NHSthrough long-term partnerships, GPs (and their patients) seethemselves as part of the NHS (Tudor Hart, ). A shift tocorporate ownership disembeds surgery ownership from itshistorical location, which has anchored it closely to the public andthe public sector.

    In addition, the concept of privatisation should be used morebroadly than just to describe a formal shift in ownership from thepublic to the private sector (see Harvey, ). Thecontractualisation of relationships between differentorganisational units within a range of public services, from theBBC to the NHS, helps to turn the services exchanged intocommodities even if they are not sold on the open market.Privatised ways of operating become embedded within theseorganisations (Born, ) while organisational identities becomeprivatisedmodelled on those existing (or thought to exist) inprivate firms. A public-sector director sits on LIFT boards and isresponsible to the public-sector organisations in their capacity asshareholders in LIFT. He or she must prioritise the financial health ofthe LIFT company, even if it conflicts with healthcare needs. Thisrole is only public if public-sector organisations are seen as beingcorporations that happen to have a state shareholding.

    Does the LIFT model also represent the commodification ofwelfare? I would argue that it does, albeit not directly. With GPs asindependent contractors and practices individually responsible fortheir own premises, the commodification of surgeries was limited.This certainly had its drawbacks: many GPs failed to invest in theirpremises, or to upgrade and modernise them (Tudor Hart, ).However, neither did they try to maximise revenue from premisesby opening them up to other income streams. Shifting premisesownership to large financial institutions is likely to do exactly this,and in Wellston I witnessed attempts to find such additionalrevenue-generating opportunities. The more successful LIFTschemes seem to be doing this with greater efficiency andruthlessness, allocating space in advance and securing long-termrental commitments, e.g. from supermarkets. Of course, while thismay benefit the LIFT companies involved, it may not benefit the

    local NHS trusts7 or the local population.While I would describe LIFT as representing privatisation and

    commodification for the reasons outlined above, it is not in any

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    simple sense a market solution. It absorbs large amounts of publicresources from the NHS locally and nationally in terms of stafftime, additional monetary costs, and so on. Market elements arealso limited by the exclusivity clause, which has already prevented

    GPs from raising finance privately (Crump, ). PPP representsa shift from short-term to long-term contracting, and it is theformer that represents a purer market relationship between parties(Flynn, 1994). Indeed, corporations do not necessarily want moremarket applied to themselves, although market rhetoric oftenforms part of the ideological justification for privatisation. Privatehealth companies successfully lobbied the government in order toensure that they were granted higher tariff rates than the NHS aswell as block contracts, regardless of the volume of actualoperations carried out (UNISON, ), neither of which suggestsa commitment to the rigours of market competition.

    In contrast, LIFT does encourage competition between publicsector bodies. Usually, a LIFT company is tied to several NHSprimary care trusts, each struggling to make its own projectsattractive to the LIFT company. Under PPP, corporations benefitfrom long-term contracts while the public sector experiencesinsecurity and competition. Given this clash with the marketrhetoric used to justify the process, it is no wonder that manypublic-sector interviewees claimed that they were the trueentrepreneurial innovators. PPP represents monopoly for the PPPindustry, and markets only for the less privileged.

    David Harvey () argues that neoliberalism does not attemptto impose a market utopia, but is instead about the restoration ofclass power. Of course, the capitalist class is not homogenous andindeed, as I have suggested, small capital is losing out under PPP.Financial capital is dominant under LIFT structures, with banksultimately making decisions on whether schemes proceed. Whileconstruction and services companies benefit from the scheme, they

    are not in charge of it to the same extent.

    3.4 Stifling innovation and risk-taking:The virtual bureaucracy

    Data portraying PPPs in practice injects caution into claims thatprivatisation releases innovation and flexibility that is stifled bypublic-sector bureaucracies, although this argument has becomeaccepted wisdom in elite policy circles. In (when plans for

    LIFT were being finalised), a Department of Health official toldthe Daily Telegraphthat the then health minister and Blairite, AlanMilburn, wants to get rid of the NHS monolith which suppresses

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    enterprise and innovation within the NHS (Cracknell, ). Theformer chief executive of Partnerships for Health, DavidGoldstone, told the Contract Journal() that the LIFT model wasa hybrid that took the best from traditional PFIs and PPPs and the

    existing primary care model. LIFT was something that would beresponsive to the changing clinical requirements and needs LIFT allows this flexibility because of the level of partnershipbetween the public and private sector.

    In the case study, the key local representative of this ideologywas a financier. He argued that corporate involvement in primaryhealthcare provision would bring enthusiasm and drive thatcould break down old bureaucratic boundaries, and complainedthat most people in the public sector, the way they do it, theyreused to separate organisations, arent they? And all of thoseorganisations tend to act in a very independent way, which actuallyis a bit mad. Similarly, a National Audit Office auditor explainedthe logic behind the Offices positive report on LIFT. He saidprivate-sector investors believed that LIFT moved on from PFI inallowing the private sector more freedom to create a much moreflexible business model.

    Yet private-sector practices developed to manage customerdemand, control labour, and rationalise production can hamperspeed and innovation. In Wellston, a call centre based outside theregion was replacing dedicated, on-site maintenance staff. In orderto access the repairs service, a member of staff now had to contactthe building manager, who would contact the call centre, whichwould contact an engineer. A one-step process (contacting a PCTmaintenance engineer) had been replaced by three steps. Thismore complex procedure may deter staff from calling on themaintenance service, and creates opportunities for requests tobecome lost in the system.

    More specifically, by giving a private contractor long-term

    monopoly pricing power, LIFT creates substantial blocks toflexibility of service provision (UNISON, ). As GPscommented, the monopoly stops staff from developing andrealising new ideas. Only a LIFT company can sanction andarrange even minor alterations, so that Wellston GPs in LIFTbuildings were not even allowed to pin up patient artwork. Theyhad to call in the LIFT company (which would delegate to itssubcontractors) to put up noticeboards or install socketsjobs thatmight previously have been done for free by clinicians with DIY

    skills, or which could have been offered to local craftspeople. Notonly is this likely to be expensive (as a LIFT GP testified to theHouse of Commons select committee on public accounts), but the

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    process impedes staff who might have ideas for changes orimprovements.

    Moreover, the financial criteria used to plan additional servicesresults in new ideas falling by the wayside. In LIFT buildings, non-

    NHS areas are rented out separately by the LIFT company asincome-generating retail units. Wellstons NHS managers hadwanted a community caf within their first LIFT centre, influencedby the groundbreaking success of a local healthy-living centre.However, in accordance with LIFTs prioritisation of profitability,the LIFT company had tendered the space commercially. Due tothe high rent sought, the space proved unviable for commercial andnon-profit caf operators, and so it remained empty while public-and private-sector managers tried (fruitlessly, during the fieldworkperiod) to find an acceptable compromise. This is an instance of acontradiction that I analyse elsewhere in more detail (Aldred,), in which privatised structures fail to enable the privatised(e.g. social entrepreneurial) subjectivities that might embed themin self-supporting local social networks (see Polanyi, 2002).

    Indeed, LIFT rents have marginalised the role of communityand voluntary-sector organisations within the new buildings,despite rhetoric about community involvement and communityownership. Such organisations cannot survive if treated as incomegenerators. Rather than producing networks and synergies, LIFTdisembeds organisations from existing networks, and risks leavingprivatised local health economies adrift in a sea of commodifiedrelationships. A shareholding logic relentlessly financialisesservices, downgrading outcomes that cannot be costed and charged.

    This has led to small pharmacies losing outa criticism thateven surfaces in the overwhelmingly positive National Audit Office() report on LIFT. The documentation surrounding LIFTrefers to chain pharmacies, and there are no guidelines forensuring the retention of community pharmacies in new buildings

    (Aldred, ). Wellstons first LIFT building contains acommunity pharmacy, but only as a temporary concession afterextended wrangling. Wellstons local pharmacy representativecriticised the corporate pharmacies for only being concerned withprofit: They see their money. Theyre vertically integrated. Theypay less for the drugs which theyre dispensing, they can get a bigdiscount. So theyre making more profit. And thats really what theywant to be doing.

    Initially, LIFT companies were supposed to lease space directly

    to GPs on a short- to medium-term basis, allowing the NHS tobenefit from more flexible relationships with professionals(PricewaterhouseCoopers, ). But the private sector backed

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    away from the risk of units remaining unlet, and LIFT companiesnow lease premises to NHS organisations for periods of twenty-five years, which are then sub-let to GPs. This shields the privatesector from risk but exposes the NHS to it, and creates additional

    contractual layers. Even financial flexibility seems limited: thefinanciers involved in the scheme have not created the variety offinancing options originally envisaged by Partnerships for Health.Instead, the original PFI-based model remains the only choice.

    The LIFT structure, rigid and risk-averse (Aldred, ), can becharacterised as creating virtual bureaucracies (such as shell sub-companies, and boards that rarely meet). The shift from GP toLIFT company ownership of premises is a shift from rooted toplaceless capital, as well as a shift from small to large capital (seesection ., above). LIFT company structures have been designedso that shares and other financial instruments can be sold onsecondary markets through a plethora of holding companies,which own individual centres.

    In Wellston and in national LIFT forums, interviewees spoke ofLIFT companies as being virtual or shell companies, and theassociated strategic partnering board structures as not reallyexisting. Wellstones local public-sector managers found that theyhad to act for the LIFT company, which seemed financially but notsocially real. In two comparator areas, NHS managers agreed thatthey had had to largely control the LIFT process themselves; it hadnot become self-sustaining. Only in the other area, where openresistance had emerged, did the LIFT company seem to existindependently. In opposing it, protestors had helped to constructsomething tangible that could be opposed. By contrast, in otherareas there was little organised opposition, and the LIFT companyremained nebulous. One Wellston GP said, in frustration, I justdont know who they are. But this failure paradoxically helpedLIFT: it seemed hard to oppose something so slippery.

    3.5 Problems of effectiveness and legitimacy

    In Wellston, it soon became apparent that LIFT was not workingsmoothly; and in two of the three boroughs involved, that it hadreached the level of being a crisis of effectiveness. This producedan internal crisis of legitimacy among local NHS managers who,in general, did not seem to be ideologically opposed to NHSprivatisation. Most had become disillusioned at LIFTs failure to

    live up to the extravagant promises of pro-privatisationdiscourses. However, they contained their frustrations within thelocal NHS and within the walls of board meetings. While

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    problems remained unspoken in public forums, an impasse hadbeen reached. Several years into the local LIFT programme, mostof Wellstons NHS organisations had few concrete achievementsto show for their money.

    This was not how it was meant to be. LIFTs planners seemed togenuinely believe that radically deepening private-sector controlover welfare would solve the problems already experienced withPFI. One key part of this was the idea that LIFT would make NHSmanagers think more entrepreneurially, and see themselves aspart of their LIFT company. Unlike PFI, LIFT creates a public-sector shareholding; per cent of the local LIFT companysshares are held by local NHS organisations, which nominate apublic-sector representative to sit on the LIFT-company board.Thus the LIFT structure has been designed not only to bring theprivate sector into NHS service planning, but also to embedshareholding logic within NHS managers decision-making.

    However, principles of partnership and entrepreneurialismherald renewed conflicts between accumulation and legitimacy.LIFT contracts place their holders in an extraordinarily favourableposition, not merely concerning one building or group of buildingsbut giving LIFT companies exclusive rights to develop any newprimary-care buildings in their area over twenty years. The modelcreates a new, high-level strategic partnering board to plan futureservice organisations in each LIFT area, dominated by seniorprivate- and public-sector managers but excluding clinicians andpatient representatives.8 The planners believed that this top-downstructure would allow projects to proceed without delayforexample, they mistakenly thought that involving local authoritiesin LIFT would make the planning process a mere formality(Aldred, ).

    In national LIFT seminars, participants repeatedly referred toproblems that had occurred when local people had objected to

    projects at the planning stage. As a LIFT-supporting consultantbased in Wellston told me, the exclusion of local communitiesfrom LIFT structures was a false economy which often meant thata local residents group would put in a planning objection and thatwould have a financial impact on your scheme. It may delay it foreighteen months and nothing will happen at all. If you dont getlocal goodwill, then youre not going to be able to develop thescheme perhaps at all.

    In Wellston, LIFTs legitimacy had been dented among the

    NHS managers who were supposed to identify themselves with it.Most expressed concern over the slow pace of developments andthe additional work and costs involved. For example, NHS staff

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    had been seconded to LIFT although the NHS continued to pay atleast some of their salaries, and one trust was providing LIFT withapparently free office accommodation. Only one local NHSmanager interviewed (out of ten) did not criticise LIFT during the

    interview. This was the chief executive of the lead PCT, who hadinitially served on the LIFT-company board.Structures had been designed by high-level elites without any

    input from the people who would have to implement and managethem (i.e. the managers), let alone from staff and service users. Noone in Wellston seemed to feel that the governing strategicpartnering board was doing its job. As a consortium of largecompanies based outside the area, the LIFT company seemed tolack the local knowledge necessary to find sites for development.Indeed, one GPs surgery had been waiting three years for theLIFT company to identify a suitable new site.

    This was corroborated by the comparator area in which LIFTappeared to be running most smoothly, although still not entirelywithout problems. A non-executive director there, generallycritical of the LIFT concept from the viewpoint of a smallbusinessman, felt that his areas choice of a local firm had beencrucial. He said:

    Weve built up connections. And theyre nice people, and theygenuinely want to do it in the right way for us, and to enhancetheir own reputation locally in doing that. But there are someLIFT companies elsewhere in the country where that doesntapply at all. Were very grateful we havent got one of thenational names that as youre recording this I wont mention.

    However, his LIFT area was extremely unusual in havingchosen a local firm, and he claimed that national policy-makersdiscouraged this, preferring local managers to choose national

    names (see ., above). This reliance on large firms strainedrelationships with local social enterprises and small businesses inWellston. Representatives of these organisations felt that they hadnot been included in the LIFT model and that short-term financialgain was being prioritised over community regeneration. WhileLIFT enshrines the local in its title, local involvement is limited.Instead, as Harvey (: ) suggests, risk absorption is localised asprivate capital and the national state attempt to devolveresponsibility for service failure.

    Thus, while LIFT had been designed to foregroundaccumulation and make the NHS and its local managers moregeared to profitability, the strategy had run into problems. It

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    generated legitimation problems due to the policys perceivedsecrecy and impermeability to outsiders, with even local NHSmanagers tending to see themselves as outsiders. The processbecame bogged down and led to further delays and disengagement

    by all sides. To NHS managers, the private sector appeared lessinterested in entrepreneurialising the local health economy thanin securing long-term, guaranteed revenue streams.

    Thus steering problems (Habermas, ) are likely to intensify.The long-term, complex contracts being negotiated by publicauthorities create unforeseen difficulties in their ability to respondto new demands from firms, service users, employees andgovernment. GPs and NHS managers will need to rely on complexprocedures that they do not control, governed by contractualdocumentation and a powerful monopoly supplier. So while thepublic sector is exhorted to marketise itself and services are re-conceptualised as commodities, a new monolith is being created,supported by complex and exclusive elite networks.

    Yet popular legitimacy for this regime is far from assured. Insteadof providing the promised personalised services, large companiesand consortia seem more likely to favour simplicity andstandardisation, which guarantee them a smooth and reliableincome stream. This squeezes out small companies, voluntaryinitiatives and professionals, frustrating their hopes of autonomyand/or profit and threatening to deny privatisation initiatives thesocial support they need to function. The different rules andprivileges applying to favoured corporate partners create aparticular image problem for the neoliberal welfare state, and oneat odds with entrepreneurial rhetoric.

    But resistance is often patchy, localised and defensive. InWellston, local trade unionists felt exhausted by constant pressurefrom local management and government policies. One branch wona temporary victory: faced with the imminent privatisation of aprimary-care-trust maintenance department, the local union hadproduced a dossier on the company to which employees would beoutsourced. The firm has been the subject of allegations of racismin its management of prisons and detention centres. Faced with thethreat of negative publicity, the primary-care trust backed down;

    but as new LIFT centres are built, their maintenance will shift tothe company in question, and employees will eventually betransferred to it piecemeal.

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    4. Resisting LIFT

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    There are tensions and ambiguities within professional attitudesto LIFT. Some Wellston GPs categorised themselves as politicallyprogressive, and thus were critical of the running of GP surgeriesas small businesses (even though they might be doing this

    themselves). These GPs tended to support the development ofone-stop shops partly because oftheir perceived de-professionalisingeffect. At the same time, because GPs are organised as smallbusinesses, they lacked the resources to effectively counter LIFTand were left fighting a rearguard action, surgery by surgery. Indeed,during the fieldwork year in question in this paper, LIFT was notdiscussed as an agenda item at the national conference of localmedical committees. The left-wing Medical Practitioners Union(part of Amicus) did not take a clear position on LIFT; and neitherdid the mainstream British Medical Association. While GPs andpharmacists are being squeezed out by LIFTs corporatisation ofwelfare, their position tends to prevent them from taking a clearlead on resistance.

    The complexity of PPPs such as LIFT, and their often slowprogress, means that explaining the issues in clear, simple languageis essential, since people frequently feel confused anddisempowered. However, a positive side is the potential for tradeunions and service users to propose clear alternatives in alliancewith professionals, community organisations and small businesses.Many of the latter are being excluded by the corporate realignmentof welfare, and thus support (or can be persuaded to support)principles of public service constructed in opposition to corporateprofit. There is particularly strong potential for resistance to NHSreforms. Many service users believe that the NHS exemplifies analternative gift economy, expressing publicness as opposed to profit(Tudor Hart, ). This is double-sided, since as Doyal withPennell ( []) argue, the belief that the NHS exists in a worldof its own has silenced critique of ways in which it has reproduced

    dominant value systems. However, as the NHS is perceived to moveever further from an NHS ideal, critique in the name of this idealmay represent a potent source of resistance.

    Research into PFI and LIFT has indicated contradictionsinherent to this new ordering of welfare. PPP is expensive, puttingincreasing strain on the public purse. Far from acting as a seamlessnetwork of customers and entrepreneurs, PPPs often have to beheavily steered from the top, and this is certainly true in LIFTscase. Researchers can usefully make this visible, as well as the

    existence and actions of the often hidden double-hatters. This candemystify, expose, and critique fissures between the marketdiscourse justifying the policy and the experience of high costs,

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    bureaucracy and corporate collusion. Otherwise, future neoliberalwelfare is likely to mean a greater concentration of finance-ledcorporate power in alliance with the state, and the aggravation ofsystemic crises in service provision, which are likely to be blamed

    on their victims. PPP scarcely represents a new stable settlement inwhich free trade achieves unproblematic hegemony, but rather aconstant battle for power between capitals, labour forces and users(see Peck & Tickell, ).

    I would like to thank Jamie Gough, Jo McBride, the anonymousexternal reviewer and Fran Tonkiss for their comments on earlierdrafts of this paper.

    Aldred, R. () Governing local health economies: Neoliberalismand NHS LIFT, Ph.D. thesis, University of London.

    Aldred, R. () Closed policy networks, broken chains ofcommunication and the stories behind an entrepreneurial policy,

    Critical Social Policy, no. 27, pp. .Aldred, R. () Community governance or corporate governance?

    Two models for primary care provision in England, Social Theory and

    Health, vol., no. , November.Berger, J. & J. Mohr ()A Fortunate Man: The Story of a Country Doctor

    (Allen Lane).

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    2 In contrast, in the context of healthcare, the Welsh Assembly has

    redefined the clinical team to include support staff.

    3 In the NHS, primary care is now commissioned (and to some extent

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    Notes

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    for Health. This has since happened and Partnerships for Health has

    been renamed Community Health Partnerships.

    6 This may go further, particularly since fourth-wave LIFT schemes

    explicitly include clinical services. GP partnerships may be replaced

    by private companies employing salaried doctors.7 While NHS trusts are indeed minority shareholders in LIFT

    companies, LIFT is designed so that rents flow to holding companies

    within the LIFT structure rather than to the LIFT company itself.

    Indeed, many local managers interviewed saw little benefit from this

    shareholding.

    8 By contrast, existing primary-care-trust structures pay at least lip

    service to the principle of clinical governance, and include patient

    representatives.

    NHS LIFT and the new shape of neoliberal welfare