Richard Branson’s Virgin Care won a record £1bn of NHS contracts last year, as £3.1bn of health services were privatised despite a government pledge to reduce the proportion of care provided by private companies. Virgin’s £1bn haul means it now has over 400 separate NHS contracts. . It pays no tax in the UK and its ultimate parent company, Virgin Group Holdings Ltd, is based in the British Virgin Islands, a tax haven.
Overall, private firms scooped 267 – almost 70% – of the 386 clinical contracts that were put out to tender in England during 2016-17, according to a new report. They included the seven highest value contracts, worth £2.43bn between them, and 13 of the 20 most lucrative tenders. The £3.1bn in contracts, a big rise on the previous year’s £2.4bn, prompted concern that profit-driven companies are increasingly involved in delivering care, in a development that undermines repeated assurances by the health secretary, Jeremy Hunt, that they play only a marginal role.
“These figures clearly show that privatisation has a strong momentum within the NHS,” said Paul Evans, the director of the NHS Support Federation, a campaign group which monitors the privatisation of NHS services and which produced the report. “The doors to private sector involvement in the NHS remain open despite promises to move away from market-based approaches by NHS leaders and politicians. Privateers continue to win huge new NHS contracts. Private health providers now have a strong foothold,” said Evans. “Billions of pounds-worth of opportunities to bid for NHS business are still being advertised, despite numerous failures and widespread criticism.” “Dysfunctional” NHS procurement rules mean that private firms could land another £10bn of contracts in the next three years, said Evans.
The private sector’s £3.1bn of wins last year represented more than two-fifths (43%) of the £7.2bn of contracts tendered by the NHS for services including babies’ health and out of hours GP care. That dwarfed the £2.55bn (35%) of tenders won by NHS trusts and £1.53bn (21%) by not-for-profit organisations, including charities. The private sector’s continued success is a long history of winning contracts, often by undercutting rival bids from NHS trusts, only to then hand back those that do not yield a profit or have them taken away because they have provided inadequate care. Dozens of examples of private firms taking over NHS services since 2012 but then abandoning them, either because they cost them too much to provide, or could not recruit enough staff, or went into administration – or, often, because of serious complaints about the quality of their service.
For example, in 2014 Circle pulled out of its 10-year contract to run Hinchingbrooke hospital in Cambridgeshire – the first NHS hospital to be run by a private firm – two years early after encountering financial problems and heavy criticism from the Care Quality Commission (CQC), which regulates NHS care standards.
In 2013, Serco ended its contract to provide out of hours GP care in Cornwall after staff falsified data about its performance.
In 2015, Coperforma’s £63.5m takeover of non-urgent patient transport to hospital in southern England was branded an “absolute shambles” by health unions after kidney patients awaiting dialysis and cancer patients undergoing chemotherapy missed vital appointments. It finally lost the contract in late 2016.
Care UK and Virgin Care have benefited by changing tactics to target often high-value contracts for community-based health services as the NHS in England increasingly moves care out of hospitals.