Sun 5 December 2021

A report shows the NHS paid private hospitals £1.69 billion for bed capacity during the pandemic, even though they accounted for less than 1% of COVID-19 bed occupancy

Earlier this month the Good Law Project and the Guardian revealed how eight private healthcare providers received £1.69 billion in order to increase bed capacity and relieve pressure from the NHS.  The providers were paid for capacity, not activity, raising concerns about value for money. The eight firms that received the money were Circle Health, Spire Healthcare Limited, Ramsay Health, Nuffield Health, HCA Healthcare UK, Care UK, Aspen Healthcare and Practice Plus. 

Some, as has been reported by Byline Times, have Conservative Party links.

The Government appears to be relying more and more on private healthcare providers through its National Increasing Capacity Network. The initiative, which came into force in April 2021, has awarded a £2.5 billion contract across four years to numerous private providers, including those included in the £1.69 billion contracts for supporting the NHS during the pandemic. 

The spending represents a significant increase on the £1.5 billion that NHS Trusts were previously spending on the private sector in recent years.  

However, data on bed occupancy and the behaviour of private providers during the first year of the pandemic has raised questions about public health money being spent on private capacity.

Despite the contract being designed to meet rising patient demand during the pandemic, data gathered by the Centre for Health and the Public Interest (CHPI) found that on 39% of days between March 2020 and March 2021, no private bed was occupied by a Covid-19 patient. Further, on 20% more days, only one bed was occupied by a Coronavirus patient. 

This lack of capacity usage is a result, in part, of the lack of intensive care beds in private hospitals. On average, 7,000 patients are transferred from private to NHS hospitals every year in order to access this kind of care, at an estimated cost of £85 million. 

Help When it was Needed?

The initial contract from March 2020 meant the NHS block-buying all private hospital bed. The contract was adjusted later in the year, in August 2020, with the NHS paying for no less than 75% of private bed facilities. At this point, various providers exited the contract, including HCA Healthcare UK. 

One of the objectives of the contracts awarded to private hospitals was diagnostic capacity. These procedures are not distinguished from general ‘attendances’, however reporting by the Health Services Journal indicated that between June and September 2020, only between 13% and 41% of diagnostic capacity in the private hospitals was being utilised.

Between April and July 2020, when all the private hospitals’ resources were available to the NHS, there was a 73% reduction in total NHS-funded healthcare activity. This amounted to a decrease from 1.2 million to 336,000 electives, non-electives and outpatient appointments.

The reduction was in part due to staffing pressures and the prioritising of Coronavirus patients. But as the CHPI report authors explain, “unlike the NHS, private hospitals were not treating significant numbers of Covid-19 patients, [so] we would expect their normal service provision to have been less impacted by the pandemic. The NHS appears to have coped far better, with total activity in NHS hospitals falling by 21.5% compared to the year before the pandemic, while the equivalent NHS-funded activity in the contracted hospitals fell by 42.8%.”

Between August and December, the contract was changed so the NHS was paying for no less than 75% of private beds. In January 2021, this was revised a second time, switching from making a defined proportion of private hospital capacity available, to a set amount of healthcare activity. This meant that, to the remaining companies in the programme, payments were made no longer ‘at cost’, but a fixed sum based on a guaranteed minimum level of activity. 

As a result, the NHS had less access to backup capacity during the intensive second wave of the pandemic. 

CHPI points out how the change in contracts reduced the cost to the Government but decreased the capacity of the NHS in favour of private healthcare companies. Indeed, in January, Manchester University Foundation Trust reported to its board that local private hospitals were “pushing back” against requests to take more NHS patients. 

The decision in favour of private healthcare companies is critical at a time when those same businesses were looking for a pandemic “bounce”. This included carrying out non-urgent, non-elective procedures during the height of the crisis, something which NHS directors said made them feel “profoundly uncomfortable.”


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A letter from five NHS Trust medical directors, and the chairs of five Clinical Commissioning Groups (CCGs) to all Acute Trust medical directors asked colleagues to “think very carefully about the appropriateness of this, and would like colleagues not to support the delivery of such work” until pressure on the NHS had eased.

Now, private companies hope for a “bounce” resulting from long NHS waiting lists pushing individuals who could afford it to switch to private providers, as well as the NHS paying those same companies to carry out procedures and reduce waiting list pressures. 

The Independent Healthcare Providers Network responded to CHPI’s report, saying it was “the right decision to secure all additional capacity to make sure that the UK could avoid the experience of other countries which had seen their health services completely overwhelmed by Covid-19. As it was, that catastrophe was averted thanks to the success of lockdown measures and the health system was able to provide care to all the Covid-19 patients who needed it. This meant that relatively few Covid-19 patients were treated in the independent sector. Instead, since the early weeks of the pandemic the ask from the NHS was for the independent sector to create Covid-free ‘green’ pathways and sites so that urgent treatment for cancer and other conditions could continue while NHS Trusts cared for the majority of Covid-19 patients.”

“The capacity of independent sector providers was crucial to helping the NHS cope with the Covid-19 crisis,” the statement added.


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