After months of hesitation, there are signs that health unions facing wholesale job losses, service cuts and galloping privatisation in the NHS are beginning to move towards the necessary fightback.

There are indications that as soon as unions vote to take action at just one or two NHS Trusts, others will easily be encouraged to follow suit. Strike action spread like wildfire in this way in the battle over nurses’ pay back in 1988: now there are already 12,000 jobs at stake, with more cuts and closures to come.

And those contemplating action and mass campaigning to defend local services will be encouraged by evidence that the Blairite machinery driving through the market-based reforms is beginning to fracture and is losing momentum.

Many were amazed when Health Secretary Patricia Hewitt, who had got the bum’s rush and faced a headline-grabbing humiliation from both UNISON’s health conference and the Royal College of Nursing, survived Blair’s ministerial reshuffle despite months of damaging media headlines on the developing crisis in the NHS.

But Health Minister Jane Kennedy has become the first serving minister to stand down and go public with criticisms of the government’s imposition of a new system of “payment by results” which is set to destabilise NHS hospital trusts across the country.

Unlike former health Secretary Frank Dobson, who has for some time been prominent critic of a variety of New Labour policies, Kennedy had been seen as a Blair supporter, and her departure immediately after the body-blow to New Labour in the local elections has undermined Blair’s attempt to relaunch the government with his ministerial reshuffle.

The elections served to highlight the damage that is being done to New Labour’s support by the chaos they have created in the NHS.

The most dramatic result was the runaway victory of Huddersfield GP Jacky Grunsell, a Socialist Party member running on a ‘Save Our NHS’ platform, who romped to victory with over 2,100 votes, reminding many New Labour MPs of the nightmare prospect that if local services are axed some of them, too, could be swept away by an electoral revolt like that which lost Labour the Wyre Forest seat in 2001 in the backlash over the closure of Kidderminster Hospital. Interestingly the Health Concern candidates also gained another council seat in Wyre Forest.

In several areas New Labour setbacks were clearly made worse by local hospital cuts, most notably in Barking & Dagenham, where the BNP won 11 seats. Delighted fascists were able to exploit the decision of the local Barking Havering & Redbridge Trust to axe 650 jobs and close 190 beds just days before polling day in their struggle to tackle a £24m deficit.

In Stoke on Trent local activists blamed the announcement of 1,000 job losses in the local hospital Trust as a factor behind the BNP gaining three seats on May 4.

With thousands more jobs at risk and ministers pressing NHS chiefs to take “tough decisions” that will axe popular local hospitals and services, it is clear that the political cost to New Labour is set to rise, eroding the party’s core support.

The anger of health workers at the process of “creative destruction” unleashed by Blairite reforms is also showing signs of beginning to boil over into action.

UNISON’s Health conference in Gateshead at the end of April adopted two emergency motions which set out a much more active and militant response.

Union leaders were driven along by the angry mood of a decisive section of conference delegates.

A few days later a militant 5,000-strong joint trade union demonstration – the biggest since the 1984 Miners’ strike – marched through Stoke on Trent, opposing job losses. The rally was told by a UNISON official that the union would ballot for action anywhere compulsory redundancies are proposed in the West Midlands.

UNISON has also changed tack to support a joint lobby of Parliament on May 11 with the RCN and Amicus.

Indeed even the normally docile RCN has threatened to resort to a form of industrial action, urging its members to stop working unpaid overtime – a policy that could have a big impact on busy wards.

Revelations fuel anger over Blair’s “reforms”

There are problems inside the NHS too, as policies begin to unravel, past failures hit the headlines, and a disgruntled former top manager has become the first to speak out on the regime within the Department of Health.

Former DoH workforce director Andrew Foster recently revealed to the Health Service Journal what previously could only have been guessed by outsiders: the turmoil created within the NHS by Blairite policies.

After the initial honeymoon period of consensus around the increase in funding and the NHS Plan in 2000, major policy documents driving the NHS towards a competitive market system were “just sprung on an unsuspecting NHS”.

The most controversial of all, last July’s circular from then NHS chief executive Nigel Crisp, was produced “by a very small group of very senior people”, and came as “a huge surprise” even to many top managers.

Some of the policies rammed through in this way are now running into crisis.

Hewitt’s plans for a £3 billion second wave of “Independent Sector Treatment Centres” to treat waiting lists cases diverted from NHS units, which was to have been announced this summer have been put on the back burner, as local health chiefs have complained that the new private units would duplicate existing NHS facilities and represent a waste of money.

Seven schemes have already been scrapped, and there have been no bids received for three schemes: decisions on another 14 have been deferred for another year.

Meanwhile Hewitt has also been obliged to launch a “clinical audit” of the quality of the surgical work carried out in the 21 treatment centres already operational, after MPs, doctors and others expressed concern at low standards.

More damaging revelations have centred on New Labour’s ideological fixation with using private sector cash to fund new NHS hospital developments through the Private Finance Initiative (PFI).

The Commons Public Accounts Committee has just published a damning report exposing the massive £95m windfall profits pocketed by the Octagon consortium in the aftermath of building the £158m Norfolk & Norwich Hospital by “refinancing” the initial loans they had raised – over an extended 39 year period, dumping additional costs and liabilities on to the NHS Trust.

And while the private sector grabbed its bonus up front, the £34m graciously handed to the NHS from the total windfall payment of £129m takes the form of a reduction in payments over the entire period of the contract!

The bonus for shareholders amounts to almost 60 per cent of the cost of the building, and comes on top of guaranteed index-linked profits from leasing the building to the NHS and supplying support services. Meanwhile the £22m cash crunch faced by the Trust has forced the announcement of 700 redundancies.

Research from NHS pressure group Health Emergency suggests that the private companies behind current and planned PFI projects in the NHS stand to make similar windfall profits of up to £3.3 billion – while the inflated monthly payments for PFI hospitals will be stripped straight out of patient care budgets.

While re-financing bonuses at the level achieved at the Norfolk & Norwich will be difficult to achieve now, a 20% windfall return could still be achieved on many schemes. With current NHS PFI schemes worth £4.6 billion this would add up to £920 million. But the three most recently approved PFI schemes (Barts, Birmingham and St Helens) are worth £2.2 billion adding a potential windfall profit of £440 million.

And with a further £10 billion worth of NHS PFI’s in the pipeline, there could be another whacking £2 billion worth of bonus payouts up for grabs.

When Tony Blair talks about modernising the NHS what he means is more PFI and bigger and fatter profits for the shareholders of the private companies involved, and all at taxpayers’ expense.

To stop more beds being closed and more nurses sacked, join the campaign to Keep Our NHS Public – at www.keepournhspublic.com