Follow the money - when the NHS and local authorities use the private sector for health and care where does the money go?
Over the past decade the Centre for Health and the Public Interest (CHPI) has attempted to identify and explain where public money spent on private sector companies delivering health and social care in England has gone.
In our view, a key test of whether the use of private companies to deliver public services is value for money is how much profit is made by the companies and how much of taxpayers money which is meant to go to care for patients and users of social care leaks out to shareholders, lenders, landlords and investors.
Ensuring that as much of the money paid to private companies to deliver health and social care is critical given the huge strains on public spending and the growing health and care needs of the population.
Money paid to private companies which goes on profit and interest on debt repayment is also money which could be spent on staff, providing better terms and conditions and increasing the number of staff employed.
Understanding where public money spent on private companies ends up is very difficult due to limitations on the profit data which private companies are required to produce.
This task is made more difficult because the companies providing public services and their owners are not required to be tax registered in the UK.
Whilst government and Parliament have agreed that private companies are able to make a profit out of providing health and social care, until very recently they have not been concerned about how much profit has been made or where money ends up.
This has changed recently with the legislation to cap the profits of children’s social care providers.
We have consistently argued that a profit cap across all health and social care services is in the public interest along with much greater transparency about how private companies spend public money and a requirement for all companies delivering health and social care services to be tax registered in the UK.
Our work in this area.
In addition to the NHS profit map which we have created we have undertaken a number of studies looking at profit leakage in different aspects of health and social care:
The Private Finance Initiative
These reports look at how much profit has leaked out of the NHS through contracts with the private sector to build and maintain NHS hospitals under the Private Finance Initiative.
The Care Home Sector
This report looks at how much leaks out of the UK residential care sector for older people in the form of profit, interest payments on loans and rental payments to landlords. It also looks at the complex company structures of some of the providers of this form of care.
The outsourcing of NHS Eye care services
This report looks at the very large increase in the number of NHS cataract operations which are delivered on a for-profit basis. It looks at the 5 companies which have generated very large profits from the NHS as well as the amount of their income which has gone on interest on their high cost loans.
