Independent Sector Treatment Centres

1 October 2003

In a speech to the Social Market Foundation on 3 February 2003, Chancellor of the Exchequer Gordon Brown had emphasised that the private sector could play a valuable role in supporting the NHS:

'Where the private sector can add to, not undermine, NHS capacity and challenge current practices by introducing innovative working methods, it has a proper role to play - as it always has - in the National Health Service…This is why the areas into which the Health Secretary is introducing a greater role for the private sector are ... those areas where the private sector can contract with the NHS for routine procedures, where we can write clear accountable contracts to deliver NHS clinical standards, where private capacity does not simply replace NHS capacity and where we ensure that patients are given treatment solely on clinical need.'

The Birkdale Clinic in Daventry opened in October 2003 and was the first independent sector treatment centre (ISTC).

Treatment centres were developed to provide fast, pre-booked surgery and diagnostic tests for patients by separating scheduled treatment from emergency care. They were run both by the NHS and the independent sector. Independent sector involvement was intended to provide additional capacity to deliver high-quality care to NHS patients.


ISTCs did not always deliver their objectives, as not all centres achieved the expected levels of referrals and initially ISTCs did not have the same obligations regarding education and training or reporting requirements as NHS organisations.

ISTCs were also criticised for high guaranteed contract prices, regardless of the volume of activity they actually carried out. The second phase of the ISTC programme was launched in March 2005. Unlike the first wave of ISTCs, second wave sites were required to contribute to staff training and NHS staff were able to work in ISTCs.

Health Select Committee report on Independent Sector Treatment Centres

The Health Select Committee published its report on ISTCs on 13 July 2006.

In its report, the committee concluded that there were major benefits to separating elective and emergency care in treatment centres where there was local agreement and need. However, the committee was not convinced that ISTCs provided better value for money over alternatives such as NHS treatment centres, partnership arrangements or greater use of NHS facilities out of hours.

It was suggested that ISTC providers were paid on average 11.2% more than the NHS equivalent cost. However, ISTCs did play a role in reducing the price paid for 'spot purchases' with private providers.

The committee felt that ISTCs had increased patient choice, but that patients did not have sufficient information to make informed decisions. It also concluded that the threat of competition from the ISTCs may have had a significant effect on the NHS (albeit based on largely anecdotal evidence).

The committee criticised the government for not commissioning a formal evaluation of the effect of competition from ISTCs on the NHS.


Department of Health.
Departmental Report 2005.
HMSO; 2005.

Allen P, Jones L.
Diversity of healthcare providers.
In: Mays N, Dixon A, Jones L (eds.)
Understanding New Labour’s market reforms of the English NHS.
The King's Fund; 2011.

Brown G.
A modern agenda for prosperity and social reform.
Speech presented at The Social Market Foundation.
2003 Feb 3; Cass Business School, London.

House of Commons Health Committee.
Independent sector treatment centres. Fourth report of session 2005-06, volume 1.
HMSO; 2011.