The private equity-owned company, HCRG Care, has been awarded a contract to lead all adult and community services across Bath and North East Somerset, Swindon and Wiltshire (BSW) Integrated Care System, which could be worth up to £1.3bn over nine years.
The ICS’s community services are currently split across separate contracts, including the NHS providers, Great Western Hospitals Foundation Trust, Oxford Health FT, and a partnership of three NHS trusts serving Wiltshire via a joint venture. HCRG Care Group also provides some community services under contract with the ICB.
BSW ICB is billing the award as a “new model of community-based care” with HCRG Care appointed “to lead an innovative new community-based care partnership with the NHS, local authorities and charities.”
From April 2025, current NHS employees in these services will be directly employed by HCRG Care and will deliver the core services directly. According to HSJ, as lead provider, HCRG could sub-contract the delivery of services to partner organisations, but arrangements for this have not been decided.
The NHS providers in the area put a bid together for the contract as the BSW Communities Together consortium, and said they were “disappointed” to have missed out on the contract.
This month, HCRG has also won a £300m contract to provide children’s community health services in Surrey and parts of North East Hampshire. Here the previous providers told the ICB that the money provided for the new contract was not sufficient to provide a safe service.
HCRG Care was formed when the private equity company Twenty20Capital took over Virgin Care in December 2021. It was at this point that commissioners in BSW decided not to extend the contract of HCRG Care Group due to “contractual and financial risks”. But the commissioners reversed this decision and it was extended until March 2025.
Twenty20Capital is a private equity company that has expanded rapidly in the UK healthcare sector over the past three years. As well as the Virgin Care acquisition, in December 2023 it bought Operose, with its chain of GP surgeries and other NHS contracts, from US company Centene. This latter acquisition led to a clash with a London ICB due to the company’s lack of communication and breaking of contract terms, which eventually led to the loss of contracts.
The company is a private equity company and as such its sole aim is to produce the largest financial return for investors possible. The normal timescale for private equity companies to hold an investment is 7-10 years and in this time as much profit is extracted from the holding as possible via any means, but this often involves asset stripping, reduction in trained staff, sell-offs, and mergers.
In the UK, private equity is heavily involved with the care home sector, education and children’s social care making vast profits, but at the expense of care standards. Private equity has been the subject of damming investigations by the Competition and Markets Authority, the Local Government Authorities (LGA) and the Observer.
According to a March 2022 report by the Competition and Markets Authority (CMA), the UK has “sleepwalked” into a dysfunctional market for children’s social care with local authorities forced to pay excessive fees for privately run services that often fail to meet the needs of vulnerable children.
For further information on private equity in the NHS see our page Private equity and the NHS: how does it work, and what could be the impact?. In the USA, where private equity has been an issue for many years, the Private Equity Stakeholder Project (PESP), an investigative blog tries “to bring transparency and accountability to the private equity industry and empower impacted communities”.
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