Private Firms Providing NHS Services Made £1.6bn in Profits Over Two Years
Exclusive research has uncovered that private companies delivering services to the National Health Service, including healthcare and consultancy, generated £1.6bn in profits during the last two years. This staggering figure, based on contracts worth £12bn, has ignited fierce criticism from MPs who label the profit-making levels as "scandalous" and are urging ministers to impose a cap on the maximum profits private entities can extract from the NHS.
Profits Equivalent to Funding Thousands of Healthcare Staff
The £1.6bn in profits accrued in 2023-24 and 2024-25 would have been sufficient to pay for 9,178 doctors or 19,428 nurses over that period, according to the Centre for Health and the Public Interest (CHPI). This analysis focused on NHS contracts in England, involving 760 private firms offering a range of services such as diagnostic tests like CT scans, treatments for hip and knee replacements, and care for skin issues and mental health conditions.
The thinktank's findings reveal several concerning details:
- £2bn of the £12bn in contracts were awarded to firms with owners based outside the UK.
- £533m of that £2bn went to companies owned by individuals residing in tax havens, including Jersey and the Cayman Islands.
- Firms, particularly those owned by private equity groups, used £353m of their £12bn NHS income to service interest on debts.
Political Outcry and Calls for Reform
Helen Morgan, the Liberal Democrats' health spokesperson, condemned the situation, stating, "Private companies making super-profits from our NHS is an unacceptable waste. This money should be going on frontline services, not fattened profits for big corporations. The NHS should be able to benefit from economies of scale and use its power as a major buyer to drive down prices. I'm afraid it looks like our health service is being taken for a ride."
The CHPI's analysis examined contracts issued by the NHS's 42 integrated care boards and NHS England, which oversees the service and commissions specialist care where NHS capacity is insufficient. While the thinktank did not name the 760 companies, separate research identified 28 firms earning over £5m annually from the NHS, with profit margins of at least 17%, collectively receiving £4.1bn over the past two years.
These 28 firms include major private healthcare providers like Spire and Circle, consultancy firms such as PricewaterhouseCoopers and PA Consulting, five companies treating eyesight problems, diagnostic test provider InHealth, four technology and IT companies, and two electronic patient record specialists.
Demands for Transparency and Profit Caps
Labour MP Stella Creasy expressed outrage, saying, "It's frankly scandalous that while patients wait for operations, taxpayer money is leaking out to offshore tax havens and the pockets of private equity companies through these excessive profits. We need an urgent cap on this rent-seeking and profiteering, and total transparency on where this money ends up." She argued that the NHS is not receiving value for money due to the high profit margins on these contracts.
David Rowland, director of the CHPI, called for ministers to implement a profit cap for firms serving the NHS, modeled after the 8% limit being legislated for children's social care providers. He noted that similar caps already exist for drug and defence firms with public sector contracts, demonstrating the viability of such a system for NHS agreements.
Industry Response and Government Defence
The Independent Healthcare Providers Network, representing non-NHS healthcare operators, questioned the CHPI's conclusions. A spokesperson said, "Headline figures like this risk oversimplifying a complex picture. The analysis appears to combine a wide range of companies contracted by the NHS, not just those delivering patient care, and uses a very crude approach to estimating 'profit' based on company-wide figures that don't distinguish between NHS and private work. Independent healthcare providers play a vital role in delivering care to millions of NHS patients every year and are paid on the same basis. Any surplus reflects productivity and efficiency, enabling further investment in staff, facilities and services for the benefit of patients, as well as helping to reduce waiting times."
The Department of Health and Social Care defended the NHS's engagement with private firms. A spokesperson stated, "The independent sector has a role to play in tackling the waiting list backlog and building a more sustainable health system. However, in working with independent providers, we will neither tolerate 'gaming' the national payment tariff to cherrypick the simplest, most profitable cases, nor any quality shortcomings. Any care commissioned from independent sector providers must meet NHS standards."
