Hospitals, operating theatres, GP practices � they were once the heart of the welfare state. But no longer. As private companies move in, they are now a battleground.

A STATE-of-the-art hospital to provide some of the best facilities in Europe for patients. Mobile operating theatres which can be sent to areas with long waiting lists to carry out much-needed operations. A new unit where thousands of people waiting on operations such as hip replacements can be treated: on the face of it, these developments in the NHS in Scotland seem like good news for patients. Yet they have provoked a storm of criticism.

The common factor is the involvement of the private sector - either to build new facilities or to provide the services to treat the patients. However, the deep division over private investment in the NHS among both health workers and the public could make the issue a major battleground in the run-up to next year's Holyrood elections.

The debate has been fuelled by developments in recent weeks which have raised concerns that the health service north of the Border is following the lead of England and increasingly being opened up to private companies.

In November, a deal was struck paving the way for Scotland's first private treatment centre for NHS patients. The unit, based at Stracathro in Angus, is funded by the Scottish Executive and run by one of the world's largest private hospital operators, and will carry out procedures such as orthopaedic and minor plastic surgery from January.

This month, it emerged that private firm Serco, which runs Kilmarnock Prison, is bidding for a contract to take over a vacant GP practice in Harthill, North Lanarkshire. If successful, this would be the first GP surgery in Scotland not to be run by doctors.

A group of 16 senior doctors and health campaigners has been so alarmed by the moves it has called for a moratorium on private investment in the Scottish health service to allow a public debate on the matter. The group, which included leading public health expert Professor Phil Hanlon, of Glasgow University, stated last week: "There appears to be little democratic oversight of these dramatic changes to the NHS."

According to the Scottish Executive, around £30 million a year is currently being spent by the NHS on projects involving private finance. Should this money be invested directly in the health service instead of lining the pockets of businesses, as critics have argued? Or is ideology standing in the way of the replacement of crumbling hospital buildings and shorter waits for operations?

The paths taken by the NHS in Scotland and England have diverged since Tony Blair introduced privatisation to the health service in the south. But there is increasing concern that Scotland is following its neighbouring health department. Alex Nunns, spokesman for the English campaign group Keep Our NHS Public, said there were "worrying signs" the Executive was moving towards English-style market reform.

"The English NHS is in chaos, there are headlines daily about deficits, cuts and closures and people losing jobs," he says. "Not all of that is down to the private sector, but a lot of it is down to the way the government has reorganised the health services.

"It basically operates as a market, which has forced accounting systems on the NHS. This means trusts are getting to this position where they can't pay back their debts, and nobody is going to bail them out. That is where service cuts and job losses come in."

Private-sector involvement in the NHS comes in a variety of guises, some more controversial than others. One high-profile examples in Scotland has been private finance initiatives (PFI) - known in New Labour-speak as public-private partnerships or PPP - used to fund new hospitals and non-clinical services, such as cleaning and maintenance.

A PPP arrangement was used to build the £184m Royal Infirmary in Edinburgh, billed as a Scotland's flagship hospital when it opened in 2002. It has been beset by problems such as overheating and high car-parking charges and a report in 2005 uncovered a series of failures in its planning and development.

New hospitals at Hairmyres and Wishaw, both in Lanarkshire, were also financed this way. Critics believe this influenced the recent decision to downgrade the accident and emergency department at Monklands Hospital, in nearby Airdrie, pointing out that contractors would still have to be paid at the other PFI hospitals, even if floors were empty.

Yet, according to analysts, by far the biggest headache health board bosses will face over PFI is a financial one. A recent study from researchers at the Centre for International Public Health at Edinburgh University estimated the bill for the contracts to the NHS would rise from £107m to £510m annually over the next five years.

Lead author of the report Mark Hellowell claims funding is already being diverted from services to pay "rent" to the private sector, a problem which will only get worse in future.

"Scotland is about to undergo a fairly considerable expansion of PFI," he says. "We're already seeing large health boards such as Lothian and Lanarkshire struggling to meet financial targets."

The involvement of private companies to provide treatment for patients is also raising eyebrows. Initiatives have included the use of mobile operating theatres to cut waiting lists in Lothian and Aberdeen. But the most contentious proposals have been the treatment centre at Stracathro and the possibility that a GP surgery in Lanarkshire could be run by a private firm.

Shona Robison, health spokeswoman for the SNP, acknowledges that using the private sector in the short term is a means of cutting waiting lists, but argues it is not a long-term solution.

"What I do have a problem with is investing much-needed NHS pounds in the private sector when that needs to be used to build NHS capacity," she says.

Robison also warns of public opposition to the running of GP surgeries by private firms, citing the example of Derbyshire, where residents won a High Court injunction to stop a company being awarded such a contract.

"The Derbyshire experience shows that people want their GPs to be local and responsible, and accountable to local people through structures within the health service," she says. That view is backed by Dr Dean Marshall, chairman of the BMA's Scottish GP committee. "Why would a private company want to provide a general medical practice in Harthill?" he says. "Is it likely it will want to give the continuity of care, often lifelong care, that GPs do?"

Marshall is also concerned that if private firm Serco does win the Harthill contract, it will pave the way for others. "Many of us think it will almost be a loss leader, for these companies to get a foothold in Scotland and to try to take over some lucrative practices," he adds.

Yet not everyone believes that private-sector involvement in the NHS is problematic. Dr Nanette Milne, health spokeswoman for the Conservatives, backs the use of private treatment units, such as the one based at Stracathro.

"It is down to getting the best deal for patients," she says. "We have a pretty stretched capacity in the NHS and the important thing is to get patients the treatment they need, when they need it.

"If you need a hip replacement, you need a hip, and whether that is done in a private or NHS setting, I don't really have a problem with that."

Unsurprisingly, Netcare, the company behind Stracathro, is also keen to point out the benefits of the unit.

Among operations to be carried out are orthopaedic surgery, general surgery, endoscopy, minor plastic surgery and ear, nose and throat procedures. These will be performed in existing NHS operating theatres at evenings and weekends, when not in use by the NHS.

One long-running concern about private-sector involvement in the health service is the possibility that already scarce NHS staff will be "poached". According to Netcare, strict rules mean it cannot employ staff who have worked for local NHS health boards in the previous three months, although local health service staff will be allowed to work on a "bank" basis outside their contracted NHS hours.

A spokesman for Netcare claims that satisfaction in their existing operations is "consistently above 98%".

He adds: "For as long as the NHS has existed, the independent sector has played an important role in delivering care - including primary care, dentistry, mental health and social care.

"By adding extra capacity and offering real value for money, we enable limited NHS resources to be freed up for other frontline services."

Health minister Andy Kerr insists there is "no privatisation agenda" in Scotland and says the projects are about providing what is best for patients. Among the benefits of PPP, he points out, has been an "unprecedented building programme, replacing crumbling 19th-century hospitals with 21st-century hospitals, which will save many more lives."

"The results speak for themselves - waiting times have fallen steadily over the past 18 months and are now at their lowest-ever levels," he says.

These reassurances are unlikely to quell critics, with the coming months set to bring even more debate about privatisation of the NHS in Scotland. In Lanarkshire, a decision about whether Serco's bid to run the Harthill surgery will be made next month, with two local GP practices also submitting bids.

In addition, plans are being drawn up by the Executive for the Hub initiative, to encourage private firms to pay for buildings in partnership with public bodies, to house a range of health services such as GP surgeries. Next year could also herald the unveiling of the biggest private finance project of its kind in the country.

Health bosses are considering whether a £300m hospital, to replace Falkirk and Stirling Royal infirmaries, should be funded from the public or private purse. NHS Forth Valley health board is due to make a decision on the new hospital, to be based in Larbert, at the end of January.

For opponents of private-sector involvement in the NHS, the health service in Scotland is at a worrying crossroads. SNP MSP Robison accuses the health minister of "playing fast and loose with the NHS".

"Once you build a permanent private sector within the NHS, it is very hard to turn back," she says. "If it doesn't go well, you are left for decades to come with millstones round your neck."