Government quietly privatises the NHS's in-house agency staff provider

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The Government is to privatise the NHS’s in-house, publicly-owned provider of agency staff, ministers have announced.

NHS Professionals, the health service’s main staffing agency, provides 90,000 health workers to around a quarter of NHS trusts, covering two million shifts a year.

In a written statement issued on Thursday as most MPs headed back to their constituencies, the Government announced it would sell off a majority stake in the orgnaisation to the private sector with the aim of “creating a profitable business model”.

Labour says the sell-off amounts to further privatisation of a key part of the health service, while the Government claims the private sector will help provide new investment.

It is understood that the Government could invest public funds in the organisation directly through the Treasury but has chosen to use the private sector instead.

“Following market analysis and a thorough appraisal of a business case, the Department’s preferred option is to create a joint venture partnership to bring in the necessary investment and expertise to the business and give the Company greater operational autonomy,” health minister Philip Dunne said in the statement.

“The Department will sell a majority shareholding so that the Company is run and controlled by the new partner, which will carry the majority of the finance and operating risks of the business.

“Contractual mechanisms will be used to ensure that the dual aims of creating a profitable business model whilst meeting the needs of NHS customers - delivering savings and a high quality service - are correctly aligned and fully agreed upon.”

The minister said that the Government would retain a non-majority shareholding in the organisation to stop it from deviating from its original purpose.

Agency staff costs have soared in the NHS in recent years, with a £600 million increase in spending on them in the most recent financial year despite attempts to control costs.

A report by the Public Accounts Committee earlier this year said around 50,000 frontline NHS jobs were vacant – positions that usually need to be filled by agency staff.

In August hospital chiefs warned that the situation was unsustainable. The privatisation of NHS Professionals now means the organisation will be seeking to profit from the situation.

Justin Madders, Labour’s shadow health minister, said the decision to privatise the staff provider “beggars belief”.

“At a time when the NHS is struggling to cope with excessive sums being spent on agency staff it beggars belief that Jeremy Hunt is going to give the keys to the NHS's own staffing agency to a private company,” he said.

“Once again the Tory answer to the challenges facing the NHS is more privatisation.

“If NHS staff had a Secretary of State who they felt respected and valued them there might not be such a need to rely on agency staff in the first place.”

The row over the privatisation comes after ministers were criticised for not ruling out introducing new NHS charges. Tory MP Sir Edward Leigh on Tuesday said Britain needed to have an “honest debate” on charges for NHS services.

The Minister Mr Dunne did not directly address the suggestion in his response and was forced to later issue a statement distancing himself from the proposal.