Labour attempts to abolish private provision in the NHS

'The principle of a free health service'

Barbara Castle, who became Secretary of State for Health and Social Services in 1974, campaigned to abolish pay beds in the NHS, a Labour party manifesto commitment.

During a debate on the health and social security provisions of the Queen's Speech in 1975, Castle affirmed that the government was convinced that benefits would occur from the separation of private and NHS practice, suggesting that resources equivalent to four district general hospitals would be released. She stated that:

'The issue of pay beds is, above all, one internal to the health service. The existence of pay beds, with the opportunity it gives to a few senior doctors to make private gain and the opportunity it gives to patients with money to jump the queue, is seen as a bitter affront to those thousands of other staff who are dedicated to the principle of a free health service.'

Opposition from the medical profession

Her attempts to abolish private provision in the NHS met with considerable opposition from the medical profession, some of whom saw it as a threat to independence and private income. The proposals to abolish pay beds were pursued in parallel with consultant contract negotiations, which aimed to incentivise full-time working in the NHS (as opposed to part-time working supplemented by private practice).

In 1975, Harold Wilson, the Prime Minister, intervened to bring in Lord Goodman as a mediator between Castle and the medical profession, and set up a royal commission to explain the state of the NHS.

During Barbara Castle's time in office (1974–76), the NHS also faced considerable financial challenges, with economic instability and industrial disputes increasing the financial pressures on the NHS.

In response to these challenges, Barbara Castle oversaw the introduction of resource allocation, with the establishment of the Resource Allocation Working Party, which began to lessen the differences in health spending between the north and south of England.

Objectives achieved?

Barbara Castle's objectives to end private provision in the NHS were not achieved until after James Callaghan had removed her from her cabinet post in 1976 (her successor was David Ennals).

The National Health Service Act 1977 set out provisions which aimed to secure the separation of private and NHS facilities and the progressive withdrawal of accommodation and services at NHS hospitals for private patients. However, the provisions relating to pay beds were repealed by the Conservatives 3 years later in the Health Services Act 1980.