NHS Myths and the Realities of Global Britain

Ed DeVane | 02 November 2021

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Executive Summary

• There was never a moment when the National Health Service (NHS) was a pure and unadulterated creature of the state. From its inception, areas like infrastructure provision were wrapped up in a network of private contracts.
• There was a global dimension to hospital building which fully enmeshed the NHS in colonial and Commonwealth development agendas and efforts to reinvigorate the British economy.
• Successes in the development sphere risked stoking resentment at home, with a profit motive creating problems of short-termism and corruption.  
• The history of global hospital development challenges some of the organising myths of the NHS, whilst providing a perspective on the effects of unbounded marketisation.   
• If the NHS is to be used as an expansive form of ‘Global Britain’s’ soft power, more adequate safeguards and transparent avenues of public scrutiny need to be in place to ensure exports prioritise mutual healthcare improvement over revenue raising.

Introduction

There is a double standard in British political and economic discourse around global trade, foreign aid and the NHS: while the health services are often described as “off the table” in terms of the import of products and services, Labour, Conservative and Coalition governments have long considered NHS hospitals “on the table” for export. Parliamentary debates triggered by Britain’s departure from the European Union and the opening of bi-lateral trade negotiations have preserved a mythical image of the NHS as a pure and unadulterated creature of the state. Policymakers often focus on promoting a benevolent image of Britain’s health services abroad, and have discussed their potential to act as a vehicle for ‘Global Britain’s’ soft power. Models might be seen in public services like the BBC, which merged its ‘Worldwide’ and commercial ‘Studios’ subsidies in 2018 to generate greater profits from the sale of brands and programmes overseas. An asymmetric and more self-interested view of healthcare diplomacy could be further encouraged by the 2020 closure of the Department for International Development (originally conceived to lower the amount of aid tied to the sale of British goods and services) and the 2021 reduction in foreign aid spending to 0.5% of national income. With British participation in multi-lateral primary care programmes being scaled back, pressure to develop overseas hospital markets may increase.

Both export advocates and those arguing for protections against marketisation present the NHS’s engagement with the world as something new. In 2010, Labour Health Secretary Andy Burnham began consulting on the creation of a proposed non-executive government body named ‘NHS Global’, to: “not only mak[e] effective use of our knowledge and skills at home, but also mak[e] money abroad that can be reinvested back into the NHS.” The idea was revived in 2012, after the election of the Coalition government and further expanded upon by subsequent Conservative administrations. The quango now known as Healthcare UK claims to have generated over £1.3 billion in NHS-backed contracts since 2016, and the government values life sciences as one of the country’s leading exports at over £30 billion. Members of the pharmaceutical, digital health and medical device industries argue health service collaboration could increase production and add to an existing surplus with countries like the United States. NHS activists suspect that a broader growth in the life sciences sector will come at the price of accepting foreign companies advancing extractive forms of privatisation. In this view, international trade represents a final undermining of the working class welfare settlement achieved after the election of Clement Attlee’s Labour government in 1945. Such perspectives fail to appreciate that post-war governments were keen to work more closely than ever before with industry, and actively deployed nationalised resources to generate global profit and influence.

This article recovers the history of colonial and Commonwealth hospital planning to challenge the notion of the NHS as a wholly domestic and statist institution. It then moves to consider what happens when only the most profitable forms of overseas development are prioritised. The latent manner in which Britain advanced a global hospital market and the shielding of these building arrangements from public view partly explains the ahistorical nature of political and economic discourse today. A record of short-termism and corruption builds a case for rejecting NHS myths in favour of a more critical history. Such an account points to the need for policymakers to implement more adequate safeguards and transparent avenues of public scrutiny, ensuring that when exports do take place, mutual healthcare improvement is placed before revenue raising.

Colonial and Commonwealth Hospital Development

NHS expansion has long been tied to the fortunes of private capital and global development agendas. After the Second World War, the NHS came into being against a background of a weak economy with heavily restricted state investment. In power, the Attlee government focused on defence and a national export drive as part of a broader programme of nationalisation and industrial development. Although Health Minister Aneurin Bevan had ‘universalised the best’ by making primary, secondary and community health services free at the point of use for British citizens, capital investment in NHS hospitals remained minimal until the end of the 1950s. The decline of imperialism was far from a forgone conclusion. As levels of trade within the empire and the Commonwealth reached new heights, social welfare reforms provided a new basis for Bevan to claim ‘British moral leadership in the world’. Post-war Labour and Conservative governments expected that increased productivity reaped from investment in overseas infrastructure would finance the expansion of social services in Britain.

For Westminster governments, overseas health service development promised to increase exports without adding to Britain’s recurrent expenditure. In the post-war period, the largest and most complex British-built hospitals were not completed in England, Wales, Scotland, or Northern Ireland but countries like Barbados, Hong Kong and Uganda. Local colonial administrators understood that the use of bi-lateral British aid could bring political stability where demands for self-determination had gained strength. The Colonial Development and Welfare Act established grants for infrastructure. Between 1946 and 1957, half of this finance was invested in social services; £19 million (roughly twenty percent) went towards the expansion of healthcare. Building schemes provided employment for a range of British technocrats, while modern facilities brought more opportunities for medical R&D and to sell British-manufactured goods. As much as one-third of the total cost of a modern hospital could be spent on equipment at this time. Both the Ministry of Health and the Department of Health and Social Security maintained Industries and Exports branches which sponsored international trade fairs, model ‘shop window’ NHS hospitals to exhibit equipment, and sent NHS staff on trade missions. Educating and training overseas medical students in Britain provided understaffed hospitals with a supply of nurses and doctors. Accordingly, planning and design was a collaborative endeavour of the Board of Trade, Colonial Office, and the Ministries of Health, Labour and National Service.

Applications for foreign aid were an entry point for British businesses. One illustration is provided by the redevelopment of the 500-bed Queen Elizabeth Hospital in Bridgetown, Barbados. Detailed planning had begun in 1956, being undertaken by the local administration’s Department of Public Works in an attempt to save costs. Partial funding was then sought through a Colonial Development and Welfare grant. Officials stressed the economic significance of the project to the Colonial Office in grant applications by claiming as many as 90% of patients would be employed in the sugar industry. Activities of the Colonial Office were formally uncoordinated with the Ministry of Health. Nevertheless, the accumulation of resources and experience under the NHS gave the Ministry an increasingly important stake in negotiations. With the approval of aid, civil servants began pressuring the Barbadian Governor Robert Arundell to appoint a British firm of consultant architects with experience in NHS hospital design. Private architectural firms such as Devereux & Davies (who had recently completed a well-publicised extension for the Balham Hospital in London) conducted tours of the West Indian governments, promising a reduction in fees proportionate to the amount of government work obtained. Devereux & Davies were successful in taking over the Barbados Hospital’s design and were subsequently able to establish a monopoly in the West Indies, completing contracts for maternity units and mental hospitals in British Guiana, Jamaica, St Kitts, and Trinidad and Tobago.

While the NHS remained starved of capital expenditure, the comparative advances made in British overseas hospital building contributed to political tension. With construction beginning in 1958, the 1,300 bed Queen Elizabeth Hospital in Kowloon, Hong Kong was the largest scheme undertaken in the Commonwealth and was designed by a partnership of British architects Easton, Robertson, Cusdin, Preston and Smith. As a dependant territory, Hong Kong was ineligible for World Health Organisation secondments, meaning British medical schools provided student training. Such arrangements later became a more permanent basis for the NHS to extract skilled medical staff. Not all patients and hospitals welcomed an overseas staffing contribution. Racism experienced by non-white nurses and doctors was common enough to be acknowledged in the popular press. Already by 1955, voices within Britain were calling for a complete end to government sponsored overseas hospital development. That year, during the second reading of a Colonial Development and Welfare extension Bill, Swindon Labour MP Thomas Reid compared the £610 million he claimed had been spent on bi-lateral foreign aid since 1917 with the Ministry of Health’s rejection of capital finance for a new NHS hospital in his own constituency:

Are the people of this country to go without hospitals and other things to support th[is] sort of propagation of humanity to which I have referred? They will not do it. It will be best for the people in the colonies if they refuse to do it, because then the people in the colonies will have to take responsibility and act themselves.

More local perspectives demonstrate that the domination of hospital planning and design by private British firms generated alarm amongst aid recipients as well. Most controversial were buildings like the General Hospital at Pointe-a-Pierre, constructed in Trinidad for the use of oilfield refinery workers. Part financed by Colonial Development and Welfare grants, such hospitals were presented by the Westminster government as a benefit brought by the increasing presence of British-owned private enterprise. However, just before Trinidad and Tobago concluded independence negotiations in 1962, Peter Farquhar MP raised the influence of British architects in the island’s House of Representatives, claiming too many ‘horrors’ had been built throughout the West Indies:    

If every job is given to Devereux & Davies, how are we ever in this country to develop experts in our own field? Does the government intend Devereux & Davies to have a permanent monopoly over the construction of hospitals in this country … This is a country which is supposed to be moving into independence … in every field this government finds it necessary to seek foreign technical help, when it is obvious to anybody that foreigners really do not give a damn of what is going on in Trinidad and Tobago … the type of buildings we have in this country means something to the people who live here.  

Despite critiques that British-led overseas hospital building endangered wider processes of decolonisation, hospital building continued. Expenditure on bi-lateral foreign aid – which remained one of the main sources of overseas hospital finance at this time – was around 1.5% of national income. The Colonial Development and Welfare Act was extended in 1959 and 1963, just as the 1962 Hospital Plan proposed to dramatically increase NHS capital expenditure to £500 million over a ten year period. Yet, there was also a marked shift towards the development of new markets beyond empire and the Commonwealth. Increasingly, states eligible for British aid appeared wary of undertaking complex hospital projects owing to reports of their high subsequent running costs. Buildings like the 900-bed Mulago Hospital in Kampala, Uganda completed in 1962 and partly financed from Colonial Development and Welfare grants, cost as much as 60% of the country’s annual health budget to run by 1968. While organisations like US-AID and the WHO continued to support programmes of social service expansion in Africa that were largely urban and hospital-focused, major lenders like the World Bank and International Monetary Fund tended to favour smaller primary care facilities which could be built more widely. Driven by these changes attempts to export the NHS took on a new form.

A Global Hospital Market

Britain’s pursuit of hospital markets abroad created problems of corruption and short-termism for the NHS. The colonial and Commonwealth development experience was now accompanied by a radical increase in domestic infrastructure investment and a consolidation of British manufacturing. As the 1962 Hospital Plan approached the end of its initially projected ten-year duration, civil servants looked to sell NHS-developed methods of industrialised construction to the world. The coming of the 1973 oil crisis prompted a more concerted turn towards hospital programmes in countries rich in natural resources. To overcome intensifying competition from North America and Western Europe, state and industry worked together on a progressively more co-ordinated basis to secure larger contracts in Africa and the Middle East. Later attempts to export hospital development in this manner involved a closer association with arms trading, the employment of foreign officials, and saw practices like staff extraction re-imported and imposed on Britain’s own health services for profit.

During the 1962 Hospital Plan, capacity issues within Britain’s construction industry encouraged NHS Regional Hospital Boards to develop new methods to speed building. The Oxford Method was one example, which outlined ways to use standard components and floor plans and was supported by computer aided design programmes like OXSYS. By 1974, with over 40 Oxford Method projects under construction across Britain, the Oxford Regional Board approached the Board of Trade for support in securing more international contracts. It was hoped that extensive use of low-rise modular units, materials like uPVC cladding, and factory-made components would achieve cheaper hospitals for the NHS, if production could be adequately scaled up. Internal suggestions within the Health Department for a free international exchange of industrialised building methods had already been swiftly rejected. One official commented on the proposal as an: ‘an altruistic but not particularly business-like object’.

More standardised designs were supported by a drive towards ‘turn-key’ (full service package) agreements. Estimating hospitals took on average 12 years to complete, the Ministry of Health called upon British industry to consolidate into consortiums of architects, engineers and contractors capable of undertaking all aspects of hospital planning and design seamlessly. Groups of trade associations and manufacturers began to form new organisations like the British Hospital Export Council (BHEC). Dividing up work between companies from the same country promised to allow a pooling of resources. Competition had increased with the re-internationalisation of German businesses who, freer from colonial associations, formed highly successful conglomerates such as Hospitalia International GmbH (owned by Phillips and Siemens). Aware that hospital contracts were sometimes put out for tender only as a formality, the BHEC began to directly employ foreign officials to gain early market intelligence. Other instances occurred such as in Iran, where British government ministers agreed protocols guaranteeing the awarding of contracts but needed to divide up building work. Attempting to more closely co-ordinate global hospital development thus exposed the state to public and private conflicts of interest with later allegations of corrupt practice.

Already benefitting from state investment and existing relationships with foreign officials, British arms manufacturers like Vickers Ltd were some of the first to follow the Ministry of Health’s suggestion of diversifying into hospital development on a turn-key basis. In the late-1960s, Vickers signed hospital development contracts in Iran, Saudi Arabia, and Malta. However, it soon became clear that the secretive way in which these agreements had been made, and their close connection to the sale of weapons, had prevented adequate scrutiny. In 1971, citing a lack of experience and limited capacity in its Medical Engineering division, Vickers attempted pull out of an agreement to design, construct, and staff the King Faisal Hospital in Riyadh. King Faisal bin Abdulaziz Al Saud, who the building was named after and whose palace adjoined the hospital site, took personal offence. The sense of diplomatic crisis created by the possible abandonment of the scheme was reflected in one letter by British ambassador Willie Morris:

I cannot imagine a worse project over which to run into difficulty: and I can imagine its place beside Aden in the shorter catalogue of British sins. Should the project go really sour, there is a serious risk that British firms will be excluded from competing for major contracts in Saudi Arabia and we cannot rule out the possibility of an investigation into present contracts.

 The potential collapse of the Riyadh hospital deal was thought to endanger pending Saudi orders of tanks and British bids for naval base construction. The threat was such that Foreign Secretary Alec Douglas-Home intervened to source another contractor. After similar instances in Iran and Malta involving an association with disgraced British architect John Poulson, Vickers began to face corruption allegations. Under investigation by the Maltese government for payments made to public officials, Vickers dissolved its Medical Engineering division at considerable financial loss.

Harmonious co-operation between state and industry was far from assured. The Board of Trade began to suspect industry had overstated the size of the hospital market, and with it the potential of healthcare development as a means of soft power influence. British Steel, then licensor of the Oxford Method, had argued the government needed to provide more support to capture a share of global hospital capital expenditure which it estimated to be £4 billion per annum. Yet, upon investigating this figure, the Board of Trade could only identify a total of around £2.5 billion in building contracts between 1970 and 1975. Elsewhere, private architectural consultants refused to promote standardised NHS hospital designs for a fear their wider application might cause a reduction in professional fees. Searching for customers, NHS trade missions were increasingly drawn into potential areas of controversy such as projects to develop a programme of new segregated hospitals in apartheid South Africa.

 In 1978, 134 countries adopted the WHO’s Alma-Ata declaration, which identified comprehensive primary care as the critical route to health for all. The declaration recommended that the planning and design of hospitals be ‘technologically appropriate’, and be prepared to support a wider service function less focused on disease and the seriously ill. Globally, a case made almost twenty years earlier by decolonising nations had finally gained momentum: one which prioritised low cost facilities, manufactured and capable of being maintained locally with indigenous sources of energy and materials. However, the vision of Alma-Ata faltered in implementation, lacking financial support and leadership. The declaration encountered technical criticisms from United States-based institutions including the World Bank and International Monetary Fund, who promoted more selective primary care interventions like breastfeeding and immunization. Throughout the 1980s, bi-lateral aid and a high technology hospital-focused approach continued to underpin Britain’s overseas development agenda.

As hopes of exporting model NHS hospital designs fell by the wayside, new opportunities opened for health service management and recruitment services. The International Hospitals Group and Allied Medical Group had formed as private companies, and began assisting Gulf states in attempts to raise loans worth tens of millions of pounds from British banks. After 1978, the British state’s National Enterprise Board became a majority shareholder the two companies. Lobbying by Prime Minister Margaret Thatcher and Defence Secretary John Nott, saw both businesses win contracts in Saudi Arabia worth upwards of £600 million. Not all were satisfied with these agreements. With Britain’s advancing of a global hospital market, trade unions began to protest that state-owned companies were now creating NHS labour shortages by extracting highly qualified staff to work in the Middle East. A practice previously deployed by NHS hospitals in recruiting from South Asia and the West Indies had effectively been re-imported. Consequently, as relations with the medical profession deteriorated, the Department for Health found its ability to offer places for undergraduate and postgraduate medical education to overseas students limited. Yet, widespread press criticism only came in 1981, when the National Enterprise Board sold its shares in the International Hospitals Group and United Medical Enterprises and the presence of foreign shareholders increased. Since state co-ordinated contracting had been largely shielded from public view, ahistorical fears of marketisation emerged that were narrowly linked to ideas of company nationality.  

Perhaps more significantly, businesses like the International Hospital Group continued to call upon the Thatcher government for the introduction of an internal NHS market. From 1988, these British-founded companies were some of the first to bid to for the management of District Health Authorities on the basis of experience gained abroad. What this shows us is that practices of marketisation are not new or foreign to the NHS, but are instead products of historic patterns of healthcare diplomacy which often placed profits before mutual healthcare improvement.

Conclusions

A history of colonial and Commonwealth development and Britain’s advancing of a global hospital market provides several lessons for policymakers, with the following points serving as a basis for a more transparent healthcare diplomacy:   

• We need to reject myths of the NHS as a wholly domestic and statist institution; the threat of foreign interests to the health services seems an overplayed and politically corrosive idea when we consider some of leading agitators for healthcare marketisation originated not from abroad but within Britain.
• Financial assistance should be administered in a way which focuses on maximising benefits for recipient nations; bi-lateral aid excessively tailored towards increasing sales of British goods and services can lead to inappropriate healthcare interventions.
• Where possible, planning should be a participatory process which consults a broad range of publics and practitioners on the ground, maximises the use of local resources, and selects contractors based on wide-ranging criteria which are open to scrutiny. 
• Global development should concentrate on mutually beneficial exchanges of training and expertise, rather than building up social services in an asymmetric manner. If Britain allows medical schools and hospitals to pursue labour extraction, it must be prepared to see businesses adopt similar policies towards NHS staff.
• Multi-lateral aid programmes now looking to support countries to transition from comprehensive primary care to universal health coverage remain under-resourced and in need of leadership. Here the experience and resources of the NHS can play a positive role.
• We should also be mindful that the way in which ‘Global Britain’ chooses to deploy NHS soft power influence abroad can have far reaching consequences for domestic politics. Promoting the shared benefits of international co-operation could encourage greater popular support.   

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About the author

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Ed DeVane is a final year PhD student in the Centre for the History of Medicine at the University of Warwick. His project ‘Building the NHS: planning, publics and Britain's new state healthcare facilities, 1945 – 1974’ is supervised by Professor Mathew Thomson and Professor Roberta Bivins and is supported by the Wellcome Trust. He is on Twitter @EdwardDeVane

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