This article is more than 5 years old

This article is more than 5 years old

Private health firms are on course to win more than £9bn of NHS contracts to look after patients as a result of the coalition’s ramping up of competition in the health service, research shows.

Analysis by the NHS Support Federation, an independent campaign group, reveals that profit-driven companies such as Bupa, Virgin Care and Care UK have so far won a total of 131 contracts worth a combined £2.6bn to provide NHS services since the Health and Social Care Act came into force in April 2013.

They have won two out of three of the 195 contracts awarded by NHS bodies in England in the 19 months since that legislation dramatically extended the enforced tendering of services in the NHS. Those 131 contracts represent about half the value of the 195 deals that have been agreed.

Researchers tracking the awarding of NHS contracts say that, if the private sector continues its 50% win rate by value, it will earn a potential £6.6bn more of the £13bn of other contracts which have been advertised but not yet awarded.

That would result in private firms earning £9.2bn as a direct result of the changes ushered in by then health secretary Andrew Lansley’s restructuring of the NHS, which a cabinet minister recently described as the coalition’s biggest mistake.

The £18.3bn of services tendered include more than £1bn worth of contracts for elective surgery, diagnostics (£1.2bn), community care services (£1.9bn), musculo-skeletal care (£785m), ambulance and patient transport services (£583m) and pharmacy (£558m).

The Department of Health said the figures were misleading and only a small proportion of the NHS’s overall spending was in the private sector.

But Dr Mark Porter, chair of council at the British Medical Association, said the deepening privatisation exposed by the figures proved that ministers had not told the truth when they denied that Lansley’s shakeup would produce more of it in the NHS.

“These figures show the extent of privatisation in the NHS following the pushing through of the Health and Social Care Act. An act that the government denied loud and long would lead to privatisation, has done exactly that”, said Porter.

Privatisation was damaging the NHS and wasting money, he claimed. “Enforcing competition has not only fragmented services and compromised the delivery of high-quality care, but it is also diverting vital funding away from frontline services to costly, complicated tendering processes, highlighting just how counterproductive the reorganisation has been,” said Porter, a senior hospital doctor.

The new figures underlining the rapidly increasing scale of NHS privatisation come just after it emerged that G4S and the arms manufacturer Lockheed Martin have shown an interest in bidding for a £1bn, 10-year NHS England contract to provide support services to local GP-led clinical commissioning groups.

It represents one of the biggest value contracts ever offered by the NHS, which is going through an unprecedented financial squeeze. Lockheed Martin, which makes fighters for the RAF and Merlin helicopters for the Royal Navy, attended a recent meeting hosted by NHS England for firms interested in the contract, the Health Service Journal reported.

The biggest winner from the 195 contracts awarded so far has been Circle Healthcare, which is the only private firm which currently runs an NHS hospital – Hinchingbrooke in Cambridgeshire.

It has won two contracts together worth £285.9m. Virgin Care has gained two other contracts valued at £182.5m, while Diaverum – a Swedish-owned firm which specialises in providing mobile kidney dialysis services – has been awarded three contracts worth at least £150m.

Bupa has co-won the single highest-value contract – a £235m deal to provide musculoskeletal services in West Sussex in tandem with CSH, a social enterprise – and won two other contracts, taking its total earnings over the 19 months to £132.1m.

Care UK, whose senior figures have previously donated money to the Conservatives, also won three contracts worth £104m.

Since April 2013 private firms bidding alone or with another similar firm have won 117 of the 195 contracts, as well as 10 as part of a consortium alongside a charity and an NHS provider, and a further four while partnering with a charity.Over 80 types of services are included in the 865 contracts, including dermatology, double the number that were being tendered in 2012. The commonest ones being advertised include diagnostics (133 contracts), mental health (64), GP services and out of hours care and NHS 111 services (59), pharmacy (51) and community care (39).

“These figures show that, under David Cameron, all parts of the NHS are being parcelled up and put out for sale on the open market,” said Andy Burnham, the shadow health secretary.

“The public NHS is disappearing before our eyes and people need to join the fight for it before it is too late.

“Ministers have run down the NHS and left it in a highly vulnerable position. While hospitals are struggling with a growing A&E crisis, other lucrative services are being hived off”, Burnham added.

On Friday the House of Commons will give a second reading to Labour MP Clive Efford’s private member’s bill seeking to repeal the competition elements of the 2012 Act.Paul Evans, director of the NHS Support Federation, said: “There has been a clear expansion of NHS contracts being put before the market since the Health and Social Care Act was passed. Private companies have consistently won the lions share of awards.

“This is proof of a consistent process of NHS privatisation in action. We cannot allow our health service to become dominated by the market and private sector provision. We urgently need to protect our NHS services and allow them to plan properly, not pitch them into a constant bidding war for patients”, he added.

A Department of Health spokeswoman said: “The figures quoted in this sample are highly misleading. Use of the private sector amounts to only six pence in every pound the NHS spends, an increase of just one penny since May 2010.

“Charities, social enterprises and other providers of healthcare play an important role in the NHS, as they have done for many years – the only difference being that it is now local doctors who make decisions on who provides services in the interests of their patients.”

The winners

The private companies that have earned the most from winning NHS contracts since April 2013:

Circle Healthcare 285.9m (two contracts)

Virgin Care £182.5m (two contracts)

Diaverum UK Limited £150m (three contracts)

Bupa £132.1m (three contracts)

Care UK £104m (three contracts)

The five biggest contracts by value given to private firms since April 2013:

£235m Bupa together with CSH, a social enterprise, for musculo-skeletal services in West Sussex

£225.8m Pathology First LLP and Facilities First LLP, for providing pathology services to Basildon and Thurrock University Hospitals NHS Foundation Trust

£150m Diaverum UK Limited, for providing kidney dialysis services to University Hospitals Birmingham NHS Foundation Trust

£141.1m Care UK with St George’s Healthcare NHS Trust, for offender healthcare (with NHS England)

£131m Virgin Care, for paediatric services on behalf of NHS NorthernEastern and Western Decon clinical commissioning group