DoH looks to privatise NHS Professionals by finding preferred investor

Government is moving to privatise NHS in-house recruitment agency NHS Professionals, and is looking for an investor to take a majority stake.

Mon, 21 Nov 2016

Government is moving to privatise NHS in-house recruitment agency NHS Professionals, and is looking for an investor to take a majority stake.

A tendering process to find what is being called “the right partner” is being launched through an advert in the Official Journal of the European Union (OJEU). No set period has been established for determining an outcome, a Department of Health press officer told Recruiter.

“We are aiming for the appointment of a preferred bidder next summer,” the spokesperson said, but added that the department’s engagement with potential investors would inform the outcome and final timescales for the process’s completion.

In a statement released last week, minister of state for health Philip Dunne confirmed in a written Ministerial Statement that over the past year the Department of Health had been exploring a range of potential options for the agency, which was set up as a limited company fully owned by the secretary of state for health in 2010. In February Recruiter reported about claims that government was considering selling all or part of NHS Professionals.

In the statement, Dunne said NHS Professionals requires significant investment to enable it to expand, so it can deliver improved services to more NHS trusts and cut their reliance on agency staff. Following a market analysis, the Department has now decided its preferred option is to create a joint venture partnership and will seek a partner to take a majority shareholding, so that the agency is run and controlled by this new partner who will carry the majority of the finance and operating risks of the business.

Contractual measures will be taken to ensure the agency continues to deliver on its objectives of meeting the needs of people using the NHS, while delivering savings and a high quality of service, Dunne said, adding government plans to retain a minority shareholding in the business to ensure there are no significant changes to these objectives, while it retains the right to take back ownership of the agency in the event of any serious breach of these objectives.

Dunne added there will be no immediate impact on the roughly 600 corporate staff employed by NHS Professionals, while its bank workers will also continue to book and work shifts for NHS trusts as usual.

But commenting on government’s move, Dean Kelly, co-founder and owner of investment vehicle and incubator Gardean Human Capital, told Recruiter while he anticipates interest from some parties, most likely a private equity company, any deal will be challenging. Kelly says this is because any buyer will face having to run the organisation with the same infrastructure and the same employees, while still trying to make a profit and facing restrictions on the level of profit they can make.

While NHS Professionals is the largest single supplier of flexible staffing to the National Health Service, with a bank of over 90,000 workers providing more than 2m shifts every year, it currently only works with around one in four NHS trusts.

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