Leading Article: Your life in their hods

The prospect of McAlpine's pitching with its partners to build and operate health care facilities of the kind usually supplied by the NHS conjures up the more ludicrous sort of fantasy. How long before we hear the orthopaedic surgeon cheerfully slapping on "a bit of sand and cement?" Only a matter of time before the stores department lays in breeze blocks rather than beta blockers.

As we revealed on page one yesterday, ministers want the private sector to move beyond supplying peripheral services to the NHS, and to invest in every aspect of health service activity. Under the Treasury's "private finance initiative", commercial firms will be invited to tender not only to build facilities, but also to run clinical services. Guidance to this end has been sent out to NHS trusts with virtually no public discussion and no parliamentary debate. Over the past few weeks, construction companies such as McAlpine and Tarmac have been linking up with healthcare companies to break into the new business, said to be worth £1.5bn.

We are thus witnessing what could potentially be an important stage in denationalisating the NHS. Funding of the service remains true to its founding principle: free to all at the point of delivery. But the nationalisation of Britain's hospitals undertaken in 1948 by Aneurin Bevan is gradually but purposefully being reversed. What beckons is private hospitals built and run by private firms but serving NHS patients. Does this matter? If so, why does it matter in the health service, but not in, say, the provision of nursery places or the contract to clean the public library?

In principle, the co-existence of privately run facilities alongside public ones should not matter at all. So long as the private sector provides cheaper and better services, then patients can only benefit from healthy competition.

There are, however, caveats of the kind which apply to all contracting out arrangements. The tendering process - requiring lawyers, financiers and management consultants - is costly. The private sector also faces higher borrowing costs than the NHS and will want to make a profit. So if McAlpine's and its physician partners win contracts against competition from the NHS - generally acknowledged as providing the cheapest decent health service in the industrialised world - suspicion will arise that victory has been won at the expense of poorer patient care.

But the most important point is particular to the health service. The fact that the service is free at the point of delivery generates an ethos which to a significant degree means that in matters of healthcare the poor can expect treatment as prompt and effective as that available to the better off. If the process of privatising health service facilities goes too far, it will only be a matter of time before the language of commerce and the market would start to taint the ethos of a service which relies upon a strong vocational commitment from its staff.

That does not make this latest manifestation of the private sector finance initiative wrong. But it does mean it should be pursued with caution.

If ministers want to carry the health service into a further period of upheaval, they must explain themselves more effectively than they have yet chosen to do.