It doesn’t work in the long-term. Attracting private capital to the UK health system is nothing but a temporary fix. When the New Labour government entered into Private Finance Initiatives (PFI’s), they gambled on a risky way of funding new hospitals, schools, prisons, and roads. PFI hospital contracts became nothing more than sure-win betting slips that were traded on, yielding profits for investors averaging 66%, and the public purse being robbed accordingly by these latter-day Fagins.

It really doesn’t work in the long-term. As reported by Reuters (April 2014) – ‘Private equity firms have slashed new investment in public service provision in Sweden after successive scandals led to calls for more state control, raising questions over who will meet the growing cost of supporting an ageing population. Media reports that a resident of a privately-run home for the elderly was denied medical care after a fall, and the bankruptcy of an education provider that left 11,000 pupils without a school, have left many Swedes uneasy with the idea of private companies providing vital public services’.

It truly doesn’t work in the long-term. Private equity firms exist primarily to benefit limited partners, the individuals and institutions that invest in their funds. As Terra Firma, the private equity firm  that owns Four Seasons nursing homes, explained: ‘We create value for our stakeholders by acquiring, transforming and selling asset-backed businesses in essential industries’.

Private equity firms maximise value to themselves in the short-term, then sell their shares at the height of the market, using some profit to repay debt to their ‘stakeholders’ – banks, insurance companies, and rich individuals. Everything about private equity culture is set up to maximize income for the partners inside the firm, and their external financiers. A private equity firm may charge up to 20% per anum as a management fee, and give its investors a guaranteed 10% annual return, out of monies received from the public purse for providing care services. This money is extracted before any profit or loss consideration, and leaves far less money to spend on patients.


The party is winding down. It has been winding down for some time. Mischa Gaus and Mark Brenner (, December 25, 2011), reported: ‘Nurses sang sour carols today to the private equity firm they say is starving Massachusetts hospitals and pitting workers against each other. Massachusetts nurses came to the headquarters of Cerberus Capital in Manhattan because Cerberus is the money behind Steward Health Systems, which took over the troubled Catholic hospital system Caritas last year and now is squeezing patients and workers for ultra-profits. “Their whole pitch was to keep the community hospitals alive”, said Linda Tasker, a telemetry nurse at Merrimack Valley Hospital. “But they’re robbing Peter to pay Paul, and picking out the hospitals that will make the most money”.


The party is over. ‘Chief Executive Steve Melton said: “This combination of factors (funding cuts and increased A&E useage), means we have now reluctantly concluded that, in its existing form, Circle’s involvement in Hinchingbrooke is unsustainable”. Jana Simmons (The Wall Street Journal, January 8, 2015), commented: ‘In a fresh sign of the deepening problems in the U.K.’s state health system, health-care provider Circle Holdings PLC announced on Friday that it was in talks to withdraw from its contract to operate the U.K.’s first privately run National Health Service hospital. The news is a blow for the government of Prime Minister David Cameron just four months before the general elections’.


It is not the fault of private equity firms that successive UK governments gave them carte blanche to extract as much money out of the public purse as possible, that is the remit of such firms. If you herd deer toward hungry wolves, the deer will be devoured, but you can not blame wolves for their nature.  You can blame  politicians who sold to the gullible a fundamentally flawed plan of financing health care,  enabling bankers and their business friends to gorge themselves on short-term profits.


The party is truly over. Yet, UK politicians, so wed to the principle of State assets being franchised to capitalists, continue with the plan, as idiots continuing to take poison.


Those who would protect the NHS and other care services must be ideologically opposed to this idiocy.



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  1. On the ICO website are several thousand Decisions in respect of the Freedom of Information Act 2000.

    Mr Graham Information Commissioner has highlighted 5 specific cases to commemorate the 10th Anniversary of FOI Requests.

    FOI only relates to Public authorities. A few are shown here below which I have picked out the word “GMC” in the search engine and then present these links below as examples of what the ICO has determined:

    If the Welfare State becomes privatised, then Freedom of Information Requests will not be able to be made because they only pertain to Public Bodies.

    At present the NHS is a public institution but with the expansion of privatised medical care how much longer will this continue?


    “Vexatious requests” are those where the request itself is considered to be “vexatious” but NOT the requester. This is in the Freedom of Information Act 2000.

    But there is no such thing as “vexatious request” under the Data Protection Act 1998 where a person can make a request for personal data from a data controller. You cannot make a subject access request for your own personal data under the Freedom of Information Act 2000: this is forbidden.

  3. Pingback: Private Care Home Profit Made Simple | NURSE BLOG INTERNATIONAL

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