Ministers urged to reveal details of £2bn Covid deals with private health firms

The government has been urged to publish details of up to £2bn in Covid-19 contracts awarded to private healthcare companies, including some that have helped fund the Conservative party.

Rob Davies 

Contracts to provide extra capacity during the pandemic have been handed to 17 firms since March 2020.

The NHS has said enlisting independent hospitals helped add 6,500 beds, freeing space to treat Covid-19 patients and allowing elective procedures to continue.

But the Good Law Project, which has repeatedly raised concerns about cronyism and opacity in public procurement, said a lack of transparency about the terms of the contracts was concerning.

The government has not published full details about the contracts, while data on how much the NHS has spent on them is also yet to be released.

The first of two groups of contracts, running from March to December 2020, had 26 firms initially enlisted to provide extra capacity, to a value of £1.6bn.

The government said it did not pay for beds and staff that were not needed, adding that in the end only 17 firms provided services, at cost price.

Accounts for Practice Plus Group, which won £76.3m of work under the contract, raise questions about this assertion. They state that it worked on a “cost plus” basis, using a “cost plus pricing formula”.

The company declined to comment, and referred queries to its trade association, the Independent Healthcare Provider Network.

Accounts for Ramsay Health Care, which won work worth up to £271.1m from March to December 2020, say it worked at cost price plus an extra 8.6% in infrastructure costs. The company said it did not profit from the contract and had made losses during the pandemic.

A second set of contracts for January to March 2021, as peaking case numbers placed huge strain on the NHS, was worth up to £474m. Unlike the first set of contracts, these included minimum payments for making capacity available, as well as for services that were actually used.

Jo Maugham, the director of the Good Law Project, said: “Billions of pounds of public money has been handed to private healthcare firms with hardly any transparency – many of which happen to have links to the Conservative party.

“No one would fault government for doing what was necessary to increase capacity to ensure people could still get the care they needed at the height of the pandemic, so what it is that government has got to lose from publishing these contract details?”

While there is no suggestion of wrongdoing on the part of the companies, Maugham stressed the importance of transparency, particularly given that many of them, or their directors, had either donated money to the Conservatives in the past or worked in the government.

One Healthcare, recipient of work worth up to £17.7m, is owned by the asset manager Octopus Investments, which gave the Tories £12,500 in 2018.

Ramsay Health Care, which operates 34 UK hospitals and treatment centres, won contracts worth up to £380m. Its general counsel previously worked for the Department of Health and Social Care between 2008 and 2013.

Ramsay said he was not involved in negotiating the contracts but did work on their coordination and legal drafting.

Practice Plus Group is owned by the private equity group Bridgepoint, whose advisory board includes the Conservative life peer Stuart Rose and Alan Milburn, the former Labour health secretary.

An NHS spokesperson said: “When NHS hospitals were first under significant pressure from high Covid-19 infection rates, the NHS worked with independent sector hospital providers to secure access to additional hospital capacity, staff and equipment and these providers have delivered almost 3m treatments and services since the start of the pandemic.”

The NHS is understood to be preparing to publish data on how much has been spent on the contracts.

The Independent Healthcare Provider Network said its members provided services at cost and were audited to ensure taxpayers’ value for money.

A spokesperson said: “Over the last year, independent providers helped to keep vital services such as cancer care going throughout the pandemic, delivering over 3.2m procedures for NHS patients under these unprecedented arrangements, including over 160,000 cancer and cardiology treatments.”

The Treasury last year blocked the health secretary, Matt Hancock’s plan to spend £5bn with private hospitals to clear the NHS backlog, on the grounds that it did not offer value for money.

The government has since drawn up a third group of contracts, under a framework agreement, which could lead to suppliers from a list of 90 approved private companies awarded £10bn of work over four years.