Research indicates that private companies offering services to the NHS, encompassing healthcare and consultancy, have generated profits amounting to £1.6 billion over the past two years. This data, derived from contracts valued at £12 billion, has sparked allegations of “scandalous” profiteering and raised concerns that the health service is being exploited. Calls for government intervention, including the establishment of a profit cap, have intensified.
The reported £1.6 billion in profits for the years 2023-24 and 2024-25 could have funded the salaries of approximately 9,178 doctors or 19,428 nurses during that timeframe, according to the Centre for Health and the Public Interest (CHPI). Their analysis focused on NHS contracts in England, involving 760 private companies that provide various services, including diagnostic tests like CT scans and treatments for conditions such as hip and knee replacements, skin issues, and mental health disorders.
Of the total £12 billion in contracts, £2 billion was awarded to firms owned by individuals based outside the UK. Notably, £533 million of this amount went to companies registered in tax havens, including Jersey and the Cayman Islands. Additionally, private equity-owned firms allocated £353 million of their NHS revenue to cover interest on debts.
Helen Morgan, the health spokesperson for the Liberal Democrats, criticized the situation, stating, “It is unacceptable that private companies are profiting excessively from our NHS. These funds should be directed towards frontline services rather than enriching large corporations.” She emphasized that the NHS should leverage its purchasing power to reduce costs, expressing concern that the health service is being taken advantage of.
The CHPI’s report examined contracts issued by 42 integrated care boards and NHS England, which oversees the entire service and directly commissions some specialized care that the NHS cannot sufficiently provide. While the think tank did not disclose the names of the 760 companies, separate research revealed that 28 firms earn over £5 million annually from the NHS, achieving profit margins of at least 17% and collectively receiving £4.1 billion in the past two years. These firms include prominent private healthcare providers such as Spire and Circle, as well as consulting firms like PricewaterhouseCoopers and PA Consulting.
Labour MP Stella Creasy condemned the situation, remarking, “It is outrageous that while patients endure long waits for operations, taxpayer funds are flowing to offshore tax havens and private equity firms through excessive profits. We urgently require a cap on this rent-seeking behavior and demand full transparency regarding the destination of these funds.” She highlighted that the NHS is not receiving adequate value for money from the contracts analyzed by the CHPI, given the high profit margins being reported.
David Rowland, the director of CHPI, advocated for the introduction of a profit cap for firms providing services to the NHS, suggesting a model similar to the 8% limit being legislated for children’s social care providers in response to similar concerns. He pointed out that the government already imposes profit caps on pharmaceutical and defense companies that secure public sector contracts, indicating a feasible framework for similar regulations within NHS contracts.
The Independent Healthcare Providers Network, representing non-NHS healthcare operators, expressed skepticism regarding the CHPI’s findings. A spokesperson remarked, “Simplistic headline figures can obscure a complex reality. The analysis seems to amalgamate a broad spectrum of companies contracted by the NHS, not exclusively those delivering patient care, and employs a rudimentary method for estimating ‘profit’ without differentiating between NHS and private sector work. Independent healthcare providers are essential in serving millions of NHS patients annually and are compensated accordingly. Any surplus reflects efficiency and productivity, which facilitates further investment in staff, facilities, and services for patient benefit, as well as helps alleviate waiting times.”
The Department of Health and Social Care defended the use of private firms within the NHS. A spokesperson stated, “The independent sector plays a crucial role in addressing the backlog of waiting lists and in establishing a more sustainable health system. However, in engaging with independent providers, we will not allow any manipulation of the national payment tariff to select only the simplest and most profitable cases, nor will we tolerate any deficiencies in quality. All care commissioned from independent sector providers must adhere to NHS standards.”
