Virgin Care Services: no corporation tax paid as profits from NHS contracts rise to £8m on £200m turnover Richard Branson’s Virgin Care Services Ltd earned more than £200m from the NHS last year – a rise of more […]

Richard Branson’s Virgin Care Services Ltd earned more than £200m from the NHS last year – a rise of more than 50 per cent on the previous 12 months – as it continues to expand into the health service.

It ended the last financial year with a £8.16m profit from a turnover of £204m, up on the £7.28m profit it made in 2016 on a turnover of £134m. The company did not pay any corporation tax for the second year running despite making a £15m profit over the last two years, according to its end of financial year accounts. This is because Virgin Care Services Ltd is a subsidiary of Virgin Care Ltd, which provides NHS services across England and which made an overall loss for the year of £19.3m on a turnover of £42m.

Virgin Care Services Ltd’s rapid growth is largely due to three new contracts that started in 2017: a five year contract with NHS and local authority in Wiltshire worth £64m, a seven year contract with NHS East Staffordshire Clinical Commissioning Group (CCG) worth £270m, and another seven year contract with NHS Dartford, Gravesham and Swanley CCG and NHS Swale CCG, worth £126m.

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Staff numbers have ballooned as a result with the number of employees rising from 218 in 2016 to 1,190 last year. Its directors, Dr Vivienne Mcvey, a former London-based GP, and Edward Johnson, expect the company to continue to grow, Virgin Care Services Ltd’s latest end of year accounts state.

New contracts include a 10-year £500m contract in Bath and North East Somerset to deliver health and care services, a £250m contract in Essex delivering public health services over the next seven years and a £65m contract in West Lancashire delivering urgent and community care for adults.

Parent company

Virgin Care Ltd reported a turnover for the period of £42m with a loss of £19.3m meaning no corporation tax was paid. Its latest accounts states that the group “aspires to be the provider if choice for commissioners who are seeking the highest calibre NHS and related social care services”, adding that it has “invested significantly to make the business capable of adapting quickly to meet these needs”.

The accounts highlight Virgin Care Ltd’s £40m per year contract providing children’s services in Devon, now in its fifth year with discussions ongoing regarding a sixth year.

Virgin Care Services Ltd, meanwhile, operates as part of the Virgin Care group, whose financial make-up is complex. Active companies include Virgin Care Services Ltd, Virgin Care Ltd, Virgin Care Provider Services, Virgin Care Corporate Services Ltd and several limited liability partnerships (LLPs), each of whom are responsible for various NHS contracts.

Each limited company and LLP reports its finances individually, however they are all subsidiaries of Virgin Care Ltd, which in turn is a subsidiary of the holding company Virgin Healthcare Holdings Ltd. It reported a loss of £1.7m last year. This company’s parent is Virgin UK Holdings Ltd, which is a subsidiary of Virgin Group Holdings Ltd, based in the British Virgin Islands, a tax haven, and whose sole shareholder is Sir Richard Branson.

The Virgin Care group now holds over 400 separate NHS contracts with more than 40 public commissioning authorities – treating one million people annually – across a range of services including community nursing, therapy services, adult social care, health visiting and primary care. It employs some 7,000 people in total.

According to its end of year report, 94 per cent of Virgin Care patients rating the group’s services in 2016-17 said they would be likely to recommend them to friends and colleagues. The company said it made more than 1,000 changes to services as a direct result of feedback under the “You Said, We Did” programme.

Virgin Care won a record £1bn of NHS contracts last year, as £3.1bn of health services were privatised despite a government pledge to reduce the proportion of care provided by private companies. Health Secretary Jeremy Hunt has repeatedly assured campaigners fearful of NHS creeping privatisation that for-profit companies such as Virgin Care play only a marginal role in the health service as a whole.

Overall, private firms won 267 – almost 70 per cent – of the 386 clinical contracts that were put out to tender in England during 2016-17. The total value of £3.1bn is an increase on the previous year’s £2.4bn. They included the seven highest value contracts, worth £2.43bn between them, and 13 of the 20 most lucrative tenders.

Legal action

Virgin Care faced fury last November when the company sued six clinical commissioning groups (CCGs) in Surrey, NHS England and Surrey county council last year after losing an £82m contract for children’s services to a rival bid involving a local NHS trust and two social enterprises. A settlement of the action appears to have involved the six CCGs paying Virgin an undisclosed sum. Virgin said it had been so concerned over “serious flaws in the procurement process” that it had no choice but to launch the proceedings.

A spokesman for Virgin Care said: “We have not yet reached a state of profitability overall, and our shareholders are still investing in the growth of the business. Virgin Care is incorporated and resident in the UK for tax purposes and so, as and when we reach profitability, we will meet our obligations just as we do today. We’re focused on delivering the improvements we have been commissioned to deliver, providing high quality joined-up services to the communities we serve.”