Why is Calderdale Clinical Commissioning Group buying NHS care from tax avoiders Care UK and Spire Healthcare?

An example of the increasingly intimate merger of government and corporate interests, former New Labour Health Secretary Alan Milburn recently joined Price Waterhouse Coopers to head up a board overseeing the consultancy and accountancy giant’s private health care business, which is moving in on the NHS now that the Health and Social Care Act is in place.

Milburn is also chairman of the European Advisory Board of Bridgepoint Capital, the vulture fund investors behind Care UK, which runs the Todmorden and Halifax walk in health centres and also provides diagnostic services for Calderdale NHS.

Todmorden Health Centre, base for Care UK’s walk in centre

Care UK and Spire Healthcare, which are both contracted to provide NHS care in Calderdale, are practicing tax avoidance to the tune of millions of pounds a year. Care UK avoids paying around £4m tax a year as a result of a financial scheme set up in the Channel Islands Stock Exchange, while Spire Healthcare channels £65/year through a Luxembourg subsidiary of Cinven, its private equity owner. This almost wipes out its taxable UK earnings.

Further, Care UK is paying £41m/year to its private equity owner, Bridgepoint Capital, banks and financiers. Since Bridgepoint Capital acquired it, Care UK has slipped from profit to loss. Bridgepoint Capital and Care UK are taking money out of the NHS that could be reinvested in the NHS if the services were provided by the NHS rather than Care UK. It also means that Care UK, carrying a massive debt load from Bridgepoint Capital, is in danger of becoming another Southern Cross,  the care home company that was effectively asset stripped by Blackstone, another vulture fund company. As a result Southern Cross  ran out of money and was forced to rely on the government to step in and guarantee the safety and care of the 30,000 residents in its homes.

According to Corporate Watch, Care UK is:

  • Loaded with debt by Bridgepoint Capital vulture fund investors – when Bridgepoint Capital bought Care UK, it raised the dosh by issuing a £250m bond secured against Care UK’s assets. The interest on this debt is 9.75%/year,  costing Care UK  £25m/year which goes straight to banks and financiers
  • Avoiding taxes – when Bridgepoint Capital took over Care UK, Care UK “issued £130 million of loan notes on the Channel Islands stock exchange. It is paying £8 million a year in interest on these loans. The Inland Revenue decided £4 million of this interest could be tax-deductible, helping Care UK wipe out its taxable profits (see here for more details).”
  • Profiteering for Bridgepoint Capital- Care UK is paying another £8 million a year straight to Bridgepoint Capital as dividends on £126 million of “cumulative preference shares” in the company. These guarantee its owners a return, whether or not the company is profitable. Altogether, £41 million is leaving Care UK every year and going straight to Bridgepoint, banks and financiers.
  • Guilty of providing poor quality care – Corporate Watch lists a number of examples of mistakes and negligence by Care UK, including  failing to turn up to care for an 85 year old bedridden woman for three days, failing to  process x-ray records of 6,000 patients, failing to treat 51% of the number of patients it was contracted and paid to treat at a mobile clinic, failing in duty of care to a woman in a care home, and losing its contract with Hertfordshire NHS as the result of an outrageous failure to care for an 89 year old woman left without care for 24 hours despite suffering from dementia and double incontinence.

In 2010, Care UK paid £21,000 to Andrew Lansley’s private office when he was the Tory opposition spokesperson for Health, leading to a conflict of interest charge against Andrew Lansley since Care UK made 96% of its money through the NHS.

Andrew Lansley went on to become Health Secretary in the ConDem government, overseeing the Health and Social Care Bill that came into effect on April 1 2013 and has effectively opened up the NHS to stealth privatisation. Other private health care companies that lobbied Lansley have gone on to set up tax avoidance schemes like the ones Care UK and Spire Healthcare use to siphon public money into the pockets of its vulture fund owners,  banks and financiers.

As well as buying health services from Care UK, Calderdale CCG has contracted Spire Healthcare to provide a range of services, including General Surgery, Urology, Upper Gastrointestinal Surgery, Trauma and Orthopaedics, ENT, Oral Surgery, Plastic Surgery and Gynaecology.  Calderdale SOS has further information on why people in Calderdale should be worried by Calderdale CCG’s contracts with Spire healthcare and other private health companies.

I have asked Dr Matt Walsh, Chief Officer of Calderdale Clinical Commissioning Group (CCG), if he would comment on why Calderdale CCG sees fit to commission NHS care from these private companies, given their record of tax avoidance, and Care UK’s dubious financial position. But he has only just returned from holiday so probably has a zillion emails to work through.

Do people in Calderdale really want Care UK and Spire Healthcare to provide any of our NHS services?

You can answer this question by Clicking here to take survey . Please, only for Calderdale residents.

To date, 100 per cent of survey respondents have said no, they don’t want Care UK and Spire Healthcare to provide any Calderdale NHS Services.

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