This article is more than 7 months old

This article is more than 7 months old

The brothers who own the high street bookmaker Betfred are making millions from a business that treats public sector staff for health problems including gambling addiction, the Guardian can disclose.

Betfred’s owners, the billionaire Tory party donors Fred and Peter Done, also own Health Assured, which holds dozens of government contracts to provide health and wellbeing programmes to staff.

Its taxpayer-funded clients include multiple NHS trusts that also treat gambling addicts, as well as MPs’ employees, some of whom campaign for tighter restrictions on gambling.

The Dones have taken £5.2m in dividends from the business in the past three years. They have donated £375,000 to the Conservative party since 2016.

Facebook Twitter Pinterest Fred Done (right) at an awards ceremony. Photograph: Simon Wilkinson/SWpix.com/REX/Shutterstock

MPs on both sides of the house voiced dismay at the “cynical” arrangement, while the shadow health secretary, Jon Ashworth, said the fact the Dones were profiting from betting and from gambling addiction treatment showed an “unacceptable conflict of interest”.

Claire Murdoch, the NHS mental health chief who wrote to gambling firms including Betfred this week urging them to improve their practices, said the Dones’ ownership of addiction services was “hypocrisy and tokenism”.

Health Assured runs Employee Assistance Programmes, which provide companies or public sector organisations with services that staff can access to address issues affecting their wellbeing.

Analysis reveals it holds at least £2.5m-worth of government contracts with public sector bodies, including the Houses of Parliament, local authorities and the Ministry of Defence. The true figure is likely to be much higher because some multimillion-pound contracts are awarded to multiple firms and are not itemised to show which company earned what.

The contracts mean that Health Assured’s services are potentially used by tens of thousands of government employees, particularly in the NHS.

Who are Fred and Peter Done, the brothers behind Betfred bookmakers? Read more

Murdoch said: “The example of gambling companies providing clinics to treat the very people they have stoked […] is I think hypocrisy and tokenism.” She urged problem gamblers to visit one of a raft of new NHS clinics set up to deal with the problem instead.

Her comments come the day after she wrote to gambling firms to say that the health service should not be left to pick up the pieces from tactics they use to retain customers with addiction issues.

In the letter, Murdoch said: “As the head of England’s mental health services and a nurse of more than 30 years’ experience, I have seen first hand the devastating impact on mental wellbeing of addiction and am concerned that the prevalence of gambling in our society is causing harm.”

She added that she was particularly concerned about the incentives offered to gamblers who are members of VIP schemes, the widespread use of which was revealed in the Guardian earlier this month.

According to Health Assured’s website, NHS staff can access counselling for issues such as “reckless behaviour”, including excessive drinking or gambling.

Ashworth said: “Addiction, whether from gambling, drinks or drugs, is a growing mental and public health emergency in society. Of course all NHS staff should have access to mental and wellbeing support, but this looks like an unacceptable conflict of interest. Corporate gambling interests should be nowhere near our health services like this.”

Iain Duncan Smith, who co-chairs a cross-party group on gambling, said: “The whole process strikes me as somewhat cynical. You create a problem and then you get paid to try and solve it.

“At every turn, the only thing that matters to gambling companies is to find more ways to make money off the same people.”

While some of Health Assured’s public sector clients have contracts directly with the company, others buy its services via organisations that manage procurement for multiple bodies. One of these, NHS Shared Business Services (NHS SBS), said it would consider whether it should take into account the business interests of its suppliers’ shareholders in the light of an inquiry from the Guardian.

“The 17 suppliers on our Workforce & Wellbeing Services Framework were subject to a robust quality evaluation – including a clinical assessment of services – in the form of a fully compliant OJEU [Official Journal of the European Union] tender process,” said a spokesperson. “As part of this, NHS SBS commissioned an industry-leading organisation to assess the financial viability of all potential suppliers in their entirety.

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“That process does not currently consider individual shareholders and their financial interests but we will be reviewing our processes going forwards.”

A government spokesperson said: “All public sector contracts have due diligence carried out before frameworks are issued, and even when a company is on a framework it does not mean they will receive a contract.

“The public authority awarding the contract should also carry out its own thorough due diligence, including looking for conflicts of interest.”

In one case, at the Christie hospital in Manchester, Health Assured – which more than doubled its profits last year, to £3.2m – took over the contract from Insight Healthcare, a not-for-profit organisation. The Christie hospital declined to comment.

Betfred is one of the UK’s largest bookmakers, with revenues of £728m last year. It has previously been criticised for its attitude to problem gambling and towards staff. It was censured by the gambling regulator in 2019 after the Guardian revealed it had introduced games that mimicked fixed-odds betting terminals (FOBTs). The innovation was described as an attempt to bypass a crackdown on the much-criticised machines.

In September, it was accused of underestimating staff holiday pay and then failing to tell employees that they might be owed money, even after it discovered the widespread payment problem.

While Health Assured and Betfred are run as entirely separate businesses, they are both ultimately majority-owned by the Done brothers and share other ties.

Health Assured said: “Due to the sensitive nature of the employee counselling service that Health Assured offer, we are unable to provide confidential details concerning clients.

“All public sector contracts we have been awarded have thorough due diligence carried out before they are issued, including looking for conflicts of interest.”

The Dones were asked whether or not they considered that ownership of both a gambling company and a provider of gambling addiction counselling services constituted a conflict of interest. They had not commented at time of publication.

• Free help and advice about problem gambling is available online at BeGambleAware.org or by calling the National Gambling Helpline on 0808 8020 133