Following the announcement of the UK Labour Party’s near-landslide victory on 5 July, healthcare workers and life science investors have been tentatively awaiting the first moves and measures of a party that has left the door open to expanding the role of private entities in the UK’s National Health Service (NHS).
Now, some of those moves are beginning to take shape that Prime Minister Keir Starmer has appointed his ministers with industry groups that have been anxious about previous propositions made by the newly appointed health minister, Wes Streeting, on expanding the private involvement across multiple layers of the NHS amid hopes that a Labour government might expand public funding for the beleaguered body.
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Meanwhile, Streeting is faced with repairing the worn reputation of the publicly funded UK health system, wrestling with one of the highest waiting list backlogs in Europe amid a scene of continuous strikes by consultants and formerly junior doctors, now known as resident doctors. Tackling the backlog while recruiting enough staff to manage additional appointments at the same time as managing the encroaching and politically controversial private sector within the NHS is set to be a tightrope Streeting will walk.
At the same time, investors and venture capitalists have tentatively embraced plans by the newest Chancellor of the Exchequer, Rachel Reeves, proposing the creation of a ‘National Wealth Fund’. A £7.3bn initiative aimed at generating £3 private investment for every £1 of public investment.
While the Labour Party, in the general zeitgeist of the British public, is often not tipped as the investor’s favourite party to take over British politics, the uncertainty and instability of the past 14 years under the Conservative Party have left investors hoping for any sense of certainty or stability within the UK market. To that end, Hospital Management is examining what could be ahead for the UK’s life sciences sector as Keir Starmer’s Labour government takes hold for the first time.
Private or not
One of the industry controversies in the initial selection of Wes Streeting as health minister stems from what appears to be his outlook that the private sector will need to have a greater place within the NHS. In April of this year, Streeting told the UK tabloid The Sun that the NHS would receive no additional funding unless it underwent some major reforms, arguing that spare capacity within the private sector should be used to cut the waiting list.
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By GlobalDataThe issue of privatisation within the UK is a sensitive subject, and politically unmanageable. As such the topic of implementing the private sector in any capacity within the NHS is sure to draw a lot of ire from the public. The Green Party responded to Streeting’s comments saying: “The public agrees. They don’t want endless reforms; neither do they share the Conservative or Labour appetite for creeping privatisation. They want the current model to work and to see the NHS available to everyone free of charge and primarily funded through taxes.”
At the same time, Streeting floated the measure of committing the Labour Party to the introduction of more evening and weekend staff and appointments as a criteria for further investment, not as a result of investment, an idea that the UK medical body, the British Medical Association (BMA) described as needing “a dose of reality”.
Now, following his appointment to the Department for Health and Social Care (DHSC), Streeting has been expected to put some of his plans into action over the coming weeks. Speaking at a live 9 July event explaining his department plans for the coming term at the appropriately named Tony Blair Institute, the health minister doubled down on plans to drive life science investment into the NHS but went to some efforts to avoid using the term ‘privatisation.’
Streeting said: “I want to end the begging bowl culture, where the Health Secretary only ever goes to the Treasury to ask for more money. I want to deliver the Treasury billions of pounds of economic growth. This government’s agenda for health and social care can help drag our economy out of the sluggish productivity and poor growth of recent years.
“By cutting waiting lists, we can get Britain back to health and back to work, and by taking bold action on public health we can build the healthy society needed for a healthy economy. We will make Britain a powerhouse for life sciences and medical technology. If we can combine the care of the NHS and the genius of our country’s leading scientific minds, we can develop modern treatments for patients and help get Britain’s economy booming.
“The NHS and social care are the biggest employers in most parts of our country. They should be engines of economic growth, giving opportunities in training and work to local people, as well as providing public services.”
Streeting iterated throughout the 30-minute panel that the Labour Party would treat the NHS as the large-scale employer it is, being the seventh largest employer of staff in the world, to drive economic growth by treating NHS sites as what he called “anchor institutions” that would grow areas economically via efficiently caring for the well-being of its users.
This coupling of the NHS as a means of driving economic growth, whilst by no means a new idea, is not what is usually expected out of a left-leaning political party. Even still, the measure has been embraced by industry trade groups specifically, the Association of British HealthTech Industries (ABHI) who praised Streeting’s words at the Blair Institute as “welcome”.
Responding to the remarks, ABHI’s Peter Ellingworth said: “The commitment to ensure that the DHSC is not just a health department, but also one that is focused on economic growth, is a welcome one. As the largest employer in the Life Sciences sector, and in partnership with the health and care system, HealthTech can be a major driver of growth, while continuing to support the delivery of high-quality, cost-effective care for millions of NHS patients every day.
“However, to be able to lead a revolution in healthtech, and ensure the UK remains a favourable destination for the sector, urgent steps are required.”
Investor wishes
The ABHI are not the only industry representative group lining up to call on the new Labour government to adopt a series of measures and proposals aimed at expanding the life sciences investment scene that previous governments were seemingly either unable or unwilling to pursue. For its part, the ABHI calls on Streeting to accelerate the delivery of international recognition for product approvals the NHS is fully resourced to maximise the adoption and spread of new medical devices.
Across the healthcare aisle, the Association of British Pharmaceutical Industries (ABPI) has similarly released its wish list of objectives under the new Labour government, calling on Streeting to accelerate long-standing proposals in parliament to alter legislation on clinical trials to allow investors better access to patients and facilities across the UK. The group is also asking for the urgent appointment of a new chair and chief executive to the Medicines and Healthcare Products Regulatory Agency (MHRA).
Commenting on what investors might be hoping to see under the Labour administration, David Dowling, life sciences counsel for private equity firm Ropes and Grey, detailed how one of Labour’s pledges aimed at building a new regulatory environment for life science firms has tipped some favour towards the party.
Dowling said: “One of the things that Labour’s promised is they’re going to bring in a new regulatory innovation office, which is to identify kind of barriers to investment and barriers to innovation. I think the combination of that flexibility through the MHRA and this new Regulatory Innovation Office and the fact that Wes Streeting has made comments about opening up the NHS to clinical trials and commercial partners, will create an environment where it could be easier and quicker to do clinical trials.
“I think what we may see are opportunities, whether it’s about datasets or incubators, for the NHS to be a vehicle for innovation that may sit within commercial entities. But ultimately, it will result in driving direct medical benefits for the NHS. Those would be things such as spin-outs from universities. So that ecosystem is regularly working together, and the goal is to encourage more of that. One of the advantages we have in the UK as opposed to anywhere in the world are things like the UK BioBank, where we have these very large data sets and I think many investors are very interested in what those data sets could mean.”
