Thursday 31 July 2014

Healthcare UK: A Conduit for Market expansion? Part one of a Two Part Report

Healthcare UK was set up in order to sell NHS expertise abroad, but following a series of Freedom of Information requests, Social Investigations can reveal that far from benefitting the NHS, 80 per cent of all contracts gained through Healthcare UK have ended up in private hands.

Memoranda of Understandings made between China and the UK show that in exchange for financial support for UK companies from Chinese investment, the government has promised to provide information on UK health ‘policy’ and offer China’s main financial investment arm access to ‘confidential’ information.

The vast majority of corporations involved in the international agreements are kept hidden through commercial confidentiality but enough evidence has emerged to show how Healthcare UK acts as a conduit for commercial companies in a bid to expand the ‘domestic market’ here in the UK as well as increasing the market abroad.

This is Healthcare UK, unlocking deals for UK companies, some of who are based in tax havens and whose investors have donated to the Conservative party. All in the name of the NHS.

“Good news for the NHS”
The original idea of exporting UK health expertise began under the Labour government, and took place towards the very end of their tenure. The intent behind this project according to then Health Secretary Andy Burnham, was to tap into the “exceptional knowledge and intelligence within the NHS” with “investment of taxpayers’ money and funds raised going straight back into (the) NHS.” In addition the Labour government wanted to generate ‘demand in international markets’ and broker ‘partnerships’ of an unspecified nature.

By the time Labour had lost the election, NHS Global as it was then known, had failed to gain any
contracts for the NHS or anyone else through the programme. This lack of interest didn’t deter the coalition, who continued the project with a similar message that selling the NHS abroad was “good news for patients” and the NHS.

In the coalition’s 2011 ‘Plan for Budget Growth’ the government provided a snippet of detail beyond the sound bites that had hitherto emerged (though not much), of what activity would take place abroad.

The Government’ it said, ‘will establish a proactive, entrepreneurial NHS Global to make the most of the NHS brand internationally and to offer support and advice to NHS trusts…act as a point of contact for NHS organisations’ to create ‘international customers’ and ‘international opportunities.’ Furthermore, the new NHS Global would ‘represent the interests of the NHS and allow the NHS to shape the final business model.’

The programme was eventually named Healthcare UK, a joint initiative between the Department of Health, the newly formed NHS England and UK Trade and Investment. Not long after its launch, Health Minister Anne Milton saidThis is good news for NHS patients, who will get better services at their local hospital as a result of the work the NHS is doing abroad and the extra investment that will generate”.
Yet despite these claims, a freedom of information request revealed that just 2 out of 21 contracts obtained through Healthcare UK have gone to ‘public’ organisations, with the vast bulk of 17 ending up in the hands of private companies worth over £281 million.

The beneficiaries
Records of individual contracts won through Healthcare UK, that resulted in an export or non-export deal are termed “business wins”. Information provided to Healthcare UK on these “business wins”, is considered by UK Trade and Investment of which Healthcare UK is a part, to be ‘commercially confidential’ and therefore hidden from pubic view.

According to a Department of Health spokesperson, there is no “such public interest in favour of disclosure…Any unauthorised disclosure of commercially confidential information would be detrimental to companies and would give rise to an actionable breach of confidence…there is a strong public interest in maintaining the confidence in order to secure successful outcomes for British businesses and the attendant economic improvements for the country.” In other words corporate success is more important than the public’s right to know.

Concern over what contracts are being gained and what commercial companies are benefitting is heightened by the fact that Serco, who are under investigation by the Serious Fraud Squad, sit on the Healthcare UK board.

This block on information also prevents us knowing who the two ‘public’ organisations are, listed as having won contracts worth £251,000. Are they NHS organisations or not?

Rather confusingly, a further information request directed at the Department for Business Innovation and Skills (DBIS), said NHS organisations have achieved “£45 million of business wins” through support from Healthcare UK. However, as the DBIS admitted, they do not keep records of revenue generated by NHS institutions through Healthcare UK, or whether those institutions were already exporting their expertise prior to the existence of Healthcare UK. It would appear; the Department of Health, Healthcare UK and UK Trade and Investment don’t know what one another are doing or saying.

One NHS organisation that has expanded abroad is The Leeds Teaching Hospitals, who signed a MOU with the King Hussein Cancer Centre of Jordan in 2013. Whether this agreement is part of the NHS "business wins" is not certain because Healthcare UK has blocked the information. In keeping with the general secrecy surrounding these deals, the Leeds Teaching Hospitals also cited “commercial interests” for refusing to answer what costs were involved in running the MOU with Jordan and or any revenue that may have been gained. In echoes of the response from the Department of Health, a spokesperson for the Teaching Hospitals said withholding of this information was more in the “public interest” than any “accountability, transparency, and financial probity”.

Those that we know
When Earl Howe was questioned on Healthcare UK in the House of Lords, he said, the new trade arm, which has an annual cost of £3 million to run, would not “just apply to a few elite organisations.”

Despite most companies preferring anonymity, a few companies have given permission for their names to be public and it would appear the elite are well and truly present.

One successful company in a Chinese deal, is accountancy giant KPMG, who have signed up as a business consultant for
a ‘high-end private hospital project’ in Beijing. They will work alongside multinational contractor Arup, who will design the building.

Another beneficiary of Healthcare’s global expansion is Circle Partnership, whose background and presence in the highest echelons of government, highlights exactly why those gaining contracts must be made public.

Circle are part-funded by Odey Management Ltd, who are
based in the low tax jurisdiction of the Cayman Islands. One of the main shareholders is Robin Odey who has given £251,000 to the Conservative party. Circle’s former employees Nick Seddon and Christina Robinson work in the No10 Health policy unit and as a special adviser to Jeremy Hunt respectively. It would appear that moving from a private health company into the power base of government is a natural career path these days.

Further parliamentary connections to Circle include Conservative peer
Baron Higgins of Worthing, who holds in excess of £50,000 worth of shares in Lansdowne UK Equity Fund, another investor in Circle. In case that isn’t concerning enough, Circle Holdings, the controlling body of Circle, is based in the low tax jurisdiction of Jersey; quite how that benefits the NHS and its patients is unclear.

Circle’s involvement?
Circle’s involvement in China is connected to CITIC Trust Co, part of China’s main investment group. In a government press release at the end of last year it said, Healthcare UK has “signed a Memorandum of Understanding with the CITIC Trust and Circle Partnership to unlock commercial deals for UK companies in areas such as primary care services, to provide integrated care and education and training.” In addition, according to their website, Circle will help developintegrated healthcare services for elderly patients’ and act as an adviser on ‘clinical’ matters.

Yet, despite the government trumpeting Circle Partnership’s involvement, Healthcare UK apparently has no idea what Circle is actually doing in China.

In response to a request on Circle’s involvement in Healthcare UK and what information they may be privy to, the government said, “We are not aware of any contract between CITIC and Circle to perform this function (of unlocking deals) and within the CITIC-Healthcare UK MOU no individual company is identified to carry out this function.”

What is known, is that Conservative MP Ken Clarke, who recently resigned from his post as the Minister without portfolio, met with Paolo Pieri, CFO and Tom Muir, the Director of Communications of Circle Partnership in June last year. According to the Cabinet Office, “They discussed the Healthcare UK priority markets of China, the Middle East and Brazil, with a focus on forthcoming events and trade missions…Circle outlined their overseas interests”. It sounds highly improbable that they do not know Circle’s role is in China.

Moreover, if so many contracts are landing in the hands of private companies, how can Healthcare UK claim to be for the benefit of the NHS? After all this was the justification given for selling the ‘NHS brand’ abroad and based on Circle’s role of unlocking ‘commercial deals for UK companies’, it would seem the NHS won’t get a look in.

If the NHS is not benefiting, then who is and in what way? 

Go to part two here.

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