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Exclusive: Government to sell off struggling NHS Professionals

The National Health Service’s in-house recruitment agency, NHS Professionals, is to be sold within the next 12 months, HealthInvestor understands.
The government first said it would explore the privatisation of the agency in 2010, but never found a suitor. However, sources said the Department of Health (DH) was in talks with advisors and would pick a bank to run a sale process later this month
The agency is likely to be sold in the last quarter of this year or the first of next, they said.
NHS Professionals was established in 2000 to improve management of the NHS’s temporary workforce and lower the costs of recruitment for trusts. According to its website, it has 40,000 workers on its books and is understood to have bank nursing contracts with 65 trusts.
While its scope to win more contracts is a plus, sources claim its low profit margins could prove a turn-off to investors. The agency’s ebitda is thought to be just £7 million to £8 million despite revenues of £450 million.
“They make a tiny margin as most of the money goes to paying the staff,” said one source. “Their commission for placements is small.”
The sale has also attracted criticism from unions who believe a sell-off represents further privatisation of the NHS and will raise the cost of temporary staffing for trusts. A Nursing Standard survey in December showed that staffing agency costs across 100 NHS organisations rose by some 20% in 2011/12-2012/13 – up from £143 million to £175 million.
Unison’s head of health, Christina McAnea, told HealthInvestor: "It is absolutely scandalous that the government is selling yet another internal service of the NHS.
"NHS Professionals was set up because private agencies were ripping off hospitals by charging them outrageous fees for recruiting or finding staff for shifts.
"Selling off NHSP might inject short term cash, but cost NHS trusts vast amounts in the longer term and deliver worse results.”
It is unclear at this stage whether the DH will retain a stake in the business, as it did when it sold Plasma Resources UK to Bain Capital last July. The department still owns 20% of the blood products company, having sold the remainder for £200 million.
A DH spokesperson said: “NHS Professionals is a limited company which we own and as part of that ownership, we continue to consider a range of options to manage it in a smarter way and get value for money for the taxpayer.
“Delivery of safe and efficient care is our absolute priority, and we are always looking for opportunities to bring down the cost of flexible staffing for NHS organisations.”

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Posted on: 19/03/2014

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