Private companies providing services to the NHS have generated profits of £1.6 billion over the past two financial years, according to a comprehensive analysis of health service contracts in England. The findings, described as exposing “scandalous” profiteering, have prompted urgent calls for the government to impose a strict cap on the earnings firms can make from taxpayer-funded work.
The research, conducted by the Centre for Health and the Public Interest (CHPI), examined NHS contracts worth a total of £12 billion awarded to 760 private firms for the 2023-24 and 2024-25 periods. These contracts cover a wide range of services, from diagnostic tests like CT scans and elective surgeries such as hip and knee replacements, to treatments for skin and mental health conditions, and consultancy work.
The scale and impact of profits
The CHPI’s calculation of the £1.6 billion profit figure is based on an analysis of company-wide financial data from firms holding NHS contracts. To illustrate the scale, the thinktank states this sum would have been sufficient to fund the salaries of approximately 9,178 doctors or 19,428 nurses over the same two-year period. David Rowland, the CHPI’s director, emphasised that the government already caps profits for drug and defence firms on public contracts, arguing a similar system for the NHS is both viable and necessary.
The analysis also reveals how significant portions of the £12 billion in contract value flowed out of the NHS system. It found that £2 billion went to firms with owners based outside the UK, with £533 million of that going specifically to companies owned by individuals in tax havens such as Jersey and the Cayman Islands. Furthermore, £353 million of the NHS income received by these firms—particularly those owned by private equity outfits—was used to pay interest on debts.
Major players and offshore structures
While the CHPI did not name all 760 companies, its separate research identifies 28 firms that each earn over £5 million a year from the NHS, achieve profit margins of at least 17%, and have collectively received £4.1 billion in the last two years. This group includes large private hospital providers like Spire Healthcare and Circle Health Group, as well as consultancy firms such as PricewaterhouseCoopers and PA Consulting.
Spire Healthcare, formed through a buy-out of BUPA hospitals by private equity firm Cinven in 2007, derives up to 30% of its revenue from the NHS, treating nearly 200,000 NHS patients in 2024. Circle Health Group, the UK’s largest private hospital provider, was acquired in 2023 by PureHealth, an Abu Dhabi-based holding company. The research briefing notes that private equity firms are increasingly targeting UK healthcare, with models that can involve extracting profits through dividends and debt repayments, often channelling funds offshore.
Specific contracts highlighted include a £97.8 million, eight-year deal for Community Diagnostics Services in North East London awarded to InHealth, a major provider of mobile diagnostic scanning. In the consultancy sphere, PA Consulting was part of a consortium awarded a contract worth up to £40 million to advise NHS England on strategy and productivity, having already received £60 million from the health service between 2019 and 2023.
Calls for reform and sector defence
The revelations have sparked sharp political criticism. Liberal Democrat health spokesperson Helen Morgan stated, “Private companies making super-profits from our NHS is an unacceptable waste… I’m afraid it looks like our health service is being taken for a ride.” Labour MP Stella Creasy called the situation “frankly scandalous,” adding, “We need an urgent cap on this rent-seeking and profiteering, and total transparency on where this money ends up.”
The CHPI has urged ministers to introduce a profit cap modelled on the 8% limit the government is legislating to impose on children’s social care providers. David Rowland pointed to this as a clear precedent for action.
The Independent Healthcare Providers Network, which represents non-NHS healthcare operators, challenged the CHPI’s conclusions. A spokesperson argued the “headline figures risk oversimplifying a complex picture,” using a “crude approach” that combines diverse companies and does not distinguish between their NHS and private work. They contended that any surplus reflects productivity and efficiency, enabling further investment in staff and facilities for patients.
The Department of Health and Social Care defended the use of private firms, stating they play a role in tackling waiting lists. A spokesperson said, “We will neither tolerate ‘gaming’ the national payment tariff… nor any quality shortcomings. Any care commissioned from independent sector providers must meet NHS standards.” The government has an agreement with the independent sector to increase capacity, aiming for 92% of patients to wait no longer than 18 weeks by spring 2029.
Historical context also shadows the debate. The legacy of the Private Finance Initiative (PFI), introduced in 1992 and now discontinued, saw private companies building and operating hospitals through long-term contracts, a system criticised for high costs and links to offshore tax structures. Reports suggest some PFI firms used tax havens to avoid millions in UK tax.
Further concerns have been raised beyond finances. A BBC Panorama investigation in April 2024 highlighted safety worries regarding NHS patients treated in Spire hospitals, noting surgery was taking place in facilities without intensive care units. Meanwhile, the trade union Unite has criticised the level of NHS spending on management consultants, arguing such funds could have paid for thousands of nurses.
