Unite the Union

Unite the Union

November 02, 2007 20:01 ET

Private companies must be made to reveal NHS profits say Unite

LONDON, UNITED KINGDOM--(Marketwire - Nov. 2, 2007) -

Issue date: Friday 2nd November 2007
Publication date: Saturday 3rd November 2007

Unite, the UK's largest trade union is calling for the profits that private companies are earning from NHS contracts to be made public.
On the day that thousands of NHS workers and patients march and rally in central London in support of a publicly run and publicly accountable NHS, Unite has demanded that full details of profits made by private contractors operating in the NHS should be disclosed.
Unite say that commercial confidentiality means that few details are available to evaluate if private companies are providing value for money in the NHS.

Unite say that the only government figures available on non-NHS provision of healthcare is GBP 4.1 billion for 2004-05 which accounts for 5.6% of total NHS spend for that period. This figure includes contracts let to the private sector, local authorities and not-for-profit. It does not include long standing arrangements relating to general medical, pharmaceutical and optical services and the purchasing of supplies. It also excludes the cost of GPs, pharmaceutical and supply contracts.

Derek Simpson, Joint General Secretary of Unite trade union, said: "There is a complete absence of evidence and rigorous evaluation of private contracts operating in the NHS and billions of pounds of public money is being spent and many more billions of pounds of profits earned. As well as undermining the public ethos of the NHS, this creeping privatisation is sucking the lifeblood out of public health care in Britain and depriving the NHS of vital funds.

"We want real and effective monitoring of NHS private contracts to establish whether or not they are providing value for money, delivering efficient services and offering the best in patient care. We also want to know exactly what profits private companies are earning from NHS contracts.

"Until these things are established no further private sector contracts should be awarded in the NHS and the plan to open up the commissioning of services to the private sector should certainly be halted."

Unite are opposed to privatisation of public services because of the lack of accountability and democratic oversight. The UK's largest trade union says that non of the NHS reforms involving privatisation have been through Parliament, despite the fact that many of the changes involve fundamental changes to the NHS.

Up to fourteen major companies and multinationals, some of them featured in Michael Moore's 'Sicko' on the US health system failures, have won contracts for running major NHS services, from diagnostics, GP services and running hospitals through to MRI Scans, Independent Treatment Centres and ambulance services.

Last year companies were invited to tender for the commissioning of primary care in the NHS which accounts for 80% of the National Health budget. Unite are unhappy with the weak criteria made available by the Department of Health for commissioning which they say can be bid for by the same companies, or offshoots of them, creating the potential for business carve ups and clear conflicts of interest.

It was reported in the financial press in 2004 that just one of the large firms involved, Tribal Group, which has a turnover of GBP 230m made 96% of its income from the taxpayer.

An estimated GBP 23 billion of profit has been earned by private companies over the length of their contracts from the building and delivery of services through Private Finance Initiatives.

Notes to editors

1. Unite has produced a new booklet, 'Patchwork Privatisation' with 'Keep NHS Public' for use by its' 100,000 NHS members http://www.amicustheunion.org/patchworkprivatisation

2. Contracts worth GBP 1 bn for diagnostic centres have been let.

3. Commercial providers have won 20% of the market revenue in out-of-hours GP contracts.

4. Alliance Medical won a contract worth GBP 95m to run MRI scans.

5. The private sector have also been providing treatment directly through the ISTC programme over the last couple of years with the justification that they was/is a need very quickly to expend health service capacity. Estimates place the cost of procedures carried out in ISTCs at approximately 11% more than equivalent NHS rates. The total ISTC programme will cost the taxpayer just over GBP 5 bn, providing about half a million procedures every year which is close to 10% of the total elective workload of the NHS. In July 2006 the Health Select Committee found that this "would clearly affect the viability of many existing NHS providers over the next five years and possibly beyond. ISTCs receive payment irrespective of the number of procedures they perform. There is no evidence they have helped to reduce waiting times.

6. In December 2006 New Forest Hospital in Lymington in the New Forest became the first hospital to not only be a PFI build but totally run by the private sector, although the hospital will continue being paid for by the NHS.

7. Last year companies were invited to tender for the commissioning function of PCTs, so taking on the function of all or part of the process of drawing up contracts and deciding how to award them to provide local health services. It has since been revealed that multinationals and large firms such as McKinsey, UnitedHealth, Bupa, Human, Discovery and Tribal Group have all concluded the first stage of the DoH bidding process.

8. The National Audit Office reported in December 2006 that spending on private consultants to provide advice to overspending PCTs had reached GBP 500 million.

Contact Information

  • Unite Press Office
    Catherine Bithell
    020 7 420 8909 or 07958 473 224