Tuesday, 1 October 2013

About the Private Health Corporations Who are Interested

Five private health corporations have expressed an interest:

  • Circle
  • Serco
  • Interserve Developments
  • Capita
  • Care UK

Circle claim to have a co-operative type of structure like John Lewis. However, it is not quite as straightforward as that. Their corporate history is convoluted. Their financial record at Hinchinbrooke Hospital is not good.

Hinchingbrooke Hospital in Cambridgeshire was franchised to private company Circle in November 2011 for a period of 10 years. Circle promised unprecedented savings. Government ministers were clearly in a hurry to give privatisation of the NHS a kick-start. Yet a year on, MPs on the House of Commons Public Accounts Committee who investigated the deal described the savings plan as ‘over ambitious’ and ‘unachievable’. Despite promises to pay off Hinchingbrooke Hospital’s debts this is unlikely to happen. Indeed it emerged that the deal was structured to allow Circle to take a profit of £2m each year and not pay down the debt. Despite plans to break even in the first year, the Trust is currently forecasting a deficit of £3.7m. Circle also parted ways with its Chief Executive only 6 months into the project. From NS Unison website

The MPs commented that ‘franchising’ in the NHS is untested and were considered that others were considering going down the same road before the full outcomes of Hinchingbrooke can be tested.

The MPs on the PAC made a series of recommendations aimed at preventing a repeat of the clear mistakes made at Hinchingbrooke.

Circle are UK tax avoiders. "Circle Health, the self-styled “social enterprise” that became the first private company to take over the management of an NHS hospital, is owned by companies and investment funds registered in the British Virgin Islands, Jersey and the Cayman Islands. " Corporate Watch 

Serco is another private corporation that is interested in Weston. However, they are controversial, with problems with inhumanity abuse in one of their operations and failure in its pathology services. Highly relevant is the fact that the Irish Government has cancelled Serco's bid to take over one of its services because it is under investigation  for overcharging the tax payers by £50 Million. Which taxpayer? Us - the UK taxpayer.

So the Irish block Serco, but the British do not. It is up to us to press the Government not to deal with this company until the investigations are complete.

Interserve is interested.

Care UK is reducing its tax liability by routing £8m a year in interest payments on loan notes issued in the Channel Islands.

Capita is compromised because it has a consultant who is Chair of the Clinical Commissioning Group and the Stakeholder and Quality Assurance Group.
Here is some background on Capita Group:

Capita is a major company which does an extensive range of work in most areas of the public sector, and for many private companies. Its income from the public and private sectors is roughly equal.  Its half-year results for the six months to 30 June 2013 show a half-year revenue of £1.8 billion and half-year profits before tax of £205 million. In the same six-month period, it secured new contracts worth £2.0 billion.

Capita Symonds is the property and construction management subsidiary of Capita.

There is a health division, Capita Health and Wellbeing, which has clinics which provide occupational health services to employers.

At present Capita does not appear to run clinical treatment or care centres, but in early August 2013 Capita and Circle announced that they are forming a partnership to bid for a range of NHS contracts including those for hospitals, adult and social care and administrative systems. (Financial Times, 1 August 2013)

The company is one of the hundred largest listed on the London Stock Exchange. By far the biggest shareholder, with 22.4% of the shares, is Invesco Asset Management Limited, a fund and asset management company.

Local contracts
Capita Symonds worked for North Bristol Trust on the accommodation for its children’s service.

A flavour of those Capita activities which have generated controversy can be found in its Wikipedia entry from which the following examples are taken.
In March 2006 Executive Chairman Rod Aldridge resigned in the aftermath of claims that contracts awarded to the Group were influenced by his loan of £1 million to the Labour Party.  Aldridge resigned saying that he denied the claims, but to avoid any lingering doubts about it, he was leaving the company.  Aldridge is a lifelong Labour supporter, and had overseen the company's growth from a small company in 1987 to a FTSE 100 member in 2006.

Capita manages the Criminal Records Bureau for the Home Office. In 2002, when mandatory CRB-vetting of all workers with children was brought in, a large number of teachers were temporarily unable to work after Capita's systems had difficulty with the workload and were subsequently overwhelmed, meaning that the start of the academic year was delayed in some places.

In 2006 Capita Financial Administrators (CFA) was fined £300,000 by the Financial Services Authority for having poor anti-fraud controls.


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