Health service we need

James Linney looks at who benefits from privatisation

This year will see the 70th anniversary of the national health service, but anyone who values the principle of healthcare provision, free of the influences of profit, can surely feel little desire to throw a party. In fact its 70th year has possibly been the most difficult since its creation in 1948.

Yet, as the suffering of those people who use the NHS, or are employed by it, has multiplied during this winter, there are noticeably a few who will be celebrating; because for them the suffering is simply a by-product of a growing opportunity to open it up to greater privatisation. Over the past 10 years, private healthcare providers have been allowed an ever greater piece of the NHS brand and, like a shark with a taste for the blood of its prey, they have a genius for exploiting weakness.

In this article I am going to look in more detail at one of the biggest ‘sharks’ in the pond: Virgin Care. I will use this as a case study to help illuminate how private healthcare providers have been allowed more and more access to the NHS and how, if this is allowed to continue, we could see the fall of the NHS in the near future.

According to its own website, Virgin Care operates “more than 400 health and care services throughout the country” and have “treated more than six million people”.1 Before examining its role in more detail, let us reminding ourselves briefly of how Virgin itself came to be. It was, of course, created by Richard Branson - British capitalism’s favourite pin-up boy. However, his fame, and indeed his fortune, owes more to his genius at self-promotion and PR than anything else.


Branson learnt an important lesson early in his career, when in 1971, after being caught for tax evasion he spent a short time in prison: namely, that tax avoidance is best done legally and for that you first need money (and a big team of lawyers and accountants). So when, a few years later, by luck, he made the first part of his fortune by releasing Mike Oldfield’s Tubular bells, he was quick to establish his very own tax-avoiding paradise, when he bought Necker, part of the British Virgin Islands. Here he established his family trust fund and to this day it remains the registered headquarters of Virgin Group (the parent company to all the other Virgin offshoots).

Of course, living on a remote, uninhabited island and limiting his time in the UK to less than 90 days is not about denying the exchequer of taxes. As Branson himself stated, “I have not left Britain for tax reasons, but for my love of the beautiful British Virgin Islands … a place where my family and I are able to truly relax.” Fortunately for Branson, he has not been too focused on relaxing. He was still able to set up a complex web of innumerable subsidiaries, the status of whose parent company ensures they pay very little in tax.

Fast-forward to 2008 and Virgin’s first attempts to profit from the NHS, which got off to a bit of a false start. It planned to open 50 large-scale health centres around the country, the idea being that patients would attend their NHS general practitioner, who would then - for a fee - refer them for treatment directly to the onsite Virgin-branded pharmacies, physiotherapists and gyms. The idea was abandoned, however, partly because the General Medical Council raised the point that paying GPs to refer patients to Virgin raised just a little bit of a “conflict of interest”.

At that time, as Virgin discovered, the NHS was not organised in a way that allowed large profits to be made out of GPs and community services. However, then came the most significant reorganisation in the NHS’s history, with the introduction of the Tories’ Health and Social Care Act in 2012. This introduced clinical commissioning groups - supposedly led by GPs, but in reality headed by bureaucrats and management firms who are now responsible for contracting services; no longer from other NHS providers, but from ‘any qualified providers’ (AQPs).

Thus, the Tories, always ideologically opposed to the principle of free healthcare, had set up a pincer movement to trap the NHS. On one flank the NHS was devastated by cuts in funding, the results of which have been evident this winter: a demoralised and dangerously overstretched workforce, operation cancellations and corridors full of patients waiting for a bed in jammed-full wards. On the other flank was the acceleration of privatisation - something that has always been present in the NHS to some extent. But this was privatisation on steroids: the AQP process now allowed private health firms to cherry-pick the most lucrative services. Initially this meant winning contracts for radiology, physiotherapy, phlebotomy, elective operations and so on. But the ability to throw huge sums of money and teams of contractors into the tendering process meant these transnational firms could easily win the service contracts that were previously provided by NHS teams.

Virgin was determined not to miss out and in 2010 it bought out Assura Medical - Virgin Care was born. In 2011-12 its first major contract went live: a Teesside sexual health clinic. On the outside was the familiar NHS logo; on the inside, slightly less visible, was the Virgin Care branding. This was just the start and since then Virgin has expanded its role in NHS provision faster than any other private firm. 2012 saw it win a contract for providing community care in Surrey and children services in Devon - the first contacts of their kind for a private company. Soon to follow were others covering community services, including ones in West Lancashire, Essex, North Kent, Wiltshire and Luton. Last year Virgin was awarded a £700 million contract to run Bath and North East Somerset council’s community care and health services2 and another for £108 million to provide children’s health services in Lancashire. In 2016-17 alone, Virgin won £1 billion worth of NHS contracts,3 out of the £3.1 billion (representing 43% of all NHS contracts) paid to all private health firms.


The next step - or huge leap more accurately - in the privatisation of the NHS will be the creation of Accountable Care Organisations (ACOs) - health secretary Jeremy Hunt’s scheme to allow AQPs (ie, health, finance or insurance companies) to be responsible for all health and social care for a particular region. This idea has been transplanted directly from the US and is a stepping stone towards a fully insurance-based, private health service. A group of doctors and NHS activists (and Stephen Hawking) have just been granted a full judicial review to test the lawfulness of the proposals,4 which may delay the process temporarily, but, of course, the medium-term threat remains.

No doubt Virgin Care will be one of the major players in the setting up of ACOs, the consequences of which we have only seen hints of so far. For example, the company reportedly asked staff not to report safety concerns to the health watchdog in Bath,5 while in Teesside it missed targets for chlamydia screening and so sent a memo to get staff to carry out the screening on family members, and in Wiltshire it was reported to have cut care packages for seriously ill children.6 After failing to secure a contract to provide children’s health services across Surrey, worth £82 million, Virgin also decided to sue the local clinical commissioning groups - the NHS settled out of court for an undisclosed amount said to be in the millions of pounds.

Suing an already crisis-ridden NHS is bad enough, but this is nothing compared to the potential harm that would result from a health company like Virgin pulling out of an ACO if it was deemed no longer profitable or if the company collapsed. Despite his talent for accumulating vast sums of money for himself, Richard Branson has left plenty of failed business ventures in his wake: Virgin Cola, Virgin Clothes, Virgin Vie at Home and Virgin Cars, to name a few.

The case of Virgin is just one amongst several transnational companies who have already been profiting at the expense of the NHS and who are queuing up to be part of the next phase of privatisation. The extent to which these companies are already embedded within the health service demonstrates how the NHS crisis is about more than just ‘lack of funding’. The many thousands marching on February 3 in opposition to all these attacks are demonstrating that the working class in particular is not prepared to let the NHS be demolished without a fight.

But a successful fight needs an effective strategy and this means an organisation able to express the will of the working class. In the short term Jeremy Corbyn’s Labour Party is promising a respite and in the next general election the NHS will be the major issue that could well see Corbyn become prime minister. But Labour’s pledge to modestly increase funding and promise to renationalise the NHS is grossly insufficient.

There is no better example of how illogical and damaging a system capitalism is than that provided by healthcare. Ultimately the issue is not really that people like Branson are greedy tax-avoiders (which they are), but the fact that capitalism has at its core the continuous accumulation of capital for the benefit of a tiny minority. Capitalism creates the miserable conditions that is the cause of a good many ailments and conditions - and then profits from the treatment these demand.

This cycle of misery will not end until capitalism itself is replaced by a system that has at its core democracy at all levels - a system that can only be attained through the will and organisation of the working class.


1. www.virgincare.co.uk/about-us.

2. www.independent.co.uk/news/uk/politics/virgin-care-contract-approved-social-care-nhs-privatisation-a7411386.html.

3. www.theguardian.com/society/2017/dec/29/richard-branson-virgin-scoops-1bn-pounds-of-nhs-contracts.

4. www.independent.co.uk/news/health/jeremy-hunt-judicial-review-stephen-hawking-accountable-care-organisations-back-door-privatisation-a8184161.html.

5. www.bathchronicle.co.uk/news/bath-news/virgin-care-asks-bath-staff-581823.

6. www.nhsforsale.info/private-providers/virgin.html.