Something for nothing- private health and North Staffs Health economy
There is much talk in the media nowadays about ” something for nothing” society and “welfare dependency”. Usually these comments are directed at someone who has been on benefit for a long time and is deemed as putting nothing in to the community. And barely a day goes by that the newspaper exposes someone for fraud.
There is another form of dependency, which costs the taxpayer far more than those felons reported on in the pages of the Sentinel.
The campaigning group Corporate watch recently on the tax avoiding practices of the largest private health care companies who are using tax havens and tax avoidance schemes which are depriving the exchequer of much needed revenue
Spire Health Care for instance is channelling £65m a year through a Luxembourg based subsidiary of the private equity company Cinven that owe Spire. Spire which is one of the biggest health care providers in the UK. It was formed in 2007 after private equity firm Cinven bought 25 hospitals from BUPA for £1.4 billion. PCTs in North Staffordshire use Spire Regency Hospital in Macclesfield for a variety of procedures. The value of contracts given in a North Staffs PCT planning document is valued at £99K. The PCT is involved with 4 Nuffield Hospitals as well. Despite making an operating profit of £123 in 2010 through a complex loan arrangement with Cinven was able to declare a £53 million for the same period through the Luxembourg arrangement. It has only paid £3 million over three years to HMRC.
Care UK is one of the biggest providers of NHS treatments. It is the largest operator of independent sector treatment centres and also operates GP practices, NHS walk in centres and GP out of hours around the country. It also runs 85 residential homes and provides care for over 17,000 people.
Care UK runs learning disabilities service in North Staffordshire. Interestingly according to the Sentinel the present configuration of out of hours GP services is being put out to competitive tender and the present GP Co-operative based in Basford is under some threat. It would seem that it is a possibility that an organisation like Care UK would be interested. The private Equity Company Bridgeport Capital owns care UK. When it took over Care UK in 2010 Bridport restructured the company, increased its level of debt and introduced a tax avoidance scheme that sees interest payments on borrowing and dividends on shares channelling money out of the company.
Care UK did not make an operating profit in 2010 due to the costs of restructuring under Bridgport. However when it does the restructuring has ensured that while the owners enjoy health returns the public finances may not.
Circle Health operates NHS services including services in Burton. The ITC centre has contractual relationships with a number of local health commissioning authorities. In 2009- during a Labour Government- Staffordshire County Council carried out an investigation through its Scrutiny committee of the contractual arrangements. It concluded
It is clear that the PCTs were under considerable pressure to agree to the contract. The Review Panel found general agreement that the contract is of great legal sophistication and is complex and difficult to work with, requiring unusually high levels of commissioning expertise.
The contract is not well based in an understanding of the local health economy and health needs and is expensive, in terms of total cost to the tax payer, compared to other NHS contracts
Circle was reported on by the Bureau of Investigative Journal who found that Circle is not a social enterprise a majority share through Circle Holdings whose finances are routed through the Virgin Isles and do not pay tax on dividends. Companies registered there do not have to make their accounts public. Other parts of Circle are based in Jersey another tax haven.
General health Care group owns BMI Healthcare. BMI Health care has a network of 70 hospital and clinics which treat NHS patients through the Choose and Book system and is signing contracts with other hospitals BMI have good contacts with University Hospital N Staffs with a number of consultants employed by BMI Healthcare.
The parent company GHG is owned by a consortium of companies including the private equity firm Apax partners, London and Regional and Brocton. Every hospital owned by GHG has connections with companies based in the Virgin Isles, which precludes them paying them tax to Britain.
Ramsay Health Care brought Capio UK in 2007 acquiring 22 hospitals and ITC for NHS patients. It owns Rowley Hall in Stafford, which is contracted to carry out procedures for local patients. Ramsay routes its financial affairs through the Cayman Isles its accounts are not made public.
These health companies have been lobbying hard to open up the NHS to private health companies in the new NHS legislation. It also seems clear to me that the transparency of these arrangements are open to question as NHS and private companies often share staff and there is evidence that senior managers oft en take on constancy roles for private health care
If this evidence is correct then we are seeing large sections of the NHS are being handed over to a private sector that as far as its obligations to meet its tax bill wants ” something for nothing”.