The Hidden Cost Of Public-Private Partnerships | The Apoplectic Politico Blog

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How Taxpayers Lose Out While Private Profits Soar

Public-private partnerships (PPPs) are often sold as efficient, innovative solutions to deliver essential public services. In practice, many of these deals in the UK have brought ballooning costs, poor outcomes, and handsome profits for private firms.

Worse, some of these companies have links to politicians and use offshore structures to avoid paying their fair share of tax. The result is a system where taxpayers foot the bill, services suffer, and accountability is all but absent.

This is not an isolated problem. It reflects a broader trend in UK governance where risks and the cost of failure are pushed onto ordinary people, while those with power and connections enjoy protection and profit. For an example of how this is being cemented in law, see my recent article on the new Fraud Bill, which exposes how the government is arming itself with sweeping new powers to target individuals without proper oversight.
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Agency Nursing in the NHS: Profits Before Patients

The NHS is facing a staffing crisis with over 40,000 nursing vacancies across England.
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Instead of investing in recruiting and retaining permanent staff, the NHS has become increasingly reliant on agency nurses. In just three years, NHS trusts in England spent about £3 billion on agency staff.
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Some agencies charge as much as £2,000 for a single specialist nurse shift.

Who owns these agencies? The biggest and most expensive, like Thornbury Nursing Services, are controlled by Independent Clinical Services (ICS), which is owned by Acacium, a company based in Jersey. Directors have received pay packages of up to £800,000, with millions more paid in dividends. Many of these companies are ultimately owned offshore, making it hard to track where the money ends up or how much tax is paid in the UK.
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Major agency providers, such as Nurse Plus, are backed by private equity investors like Sovereign Capital.
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Political Connections: Influence and Access

The links between private health companies and politicians are increasingly clear. For example, Health Secretary Wes Streeting has received over £300,000 in donations from companies and individuals with direct interests in NHS outsourcing and recruitment. Some of these donors control firms that have benefited from NHS contracts.

During the Covid-19 pandemic, companies like PPE Medpro were awarded contracts worth hundreds of millions through a so-called VIP lane after being referred by senior politicians. These firms made huge profits, often without delivering usable goods.
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Social Care and Supported Housing: Profiteering at the Expense of the Vulnerable

The privatisation of children’s care and supported housing has also led to scandalous outcomes. Over 80 percent of children’s homes are now run by private companies, many backed by private equity. Councils are spending hundreds of millions each year to place vulnerable children in substandard or even illegal accommodation, with some providers charging up to £1,600 per child per day.
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In supported housing, companies like Civitas have collected tens of millions in rent, often through opaque offshore structures. The result is high costs, poor standards, and little accountability. The government has launched a £20 million Supported Housing Improvement Programme to tackle poor quality and bad value for money, targeting unscrupulous landlords who exploit vulnerable residents by charging high rents for inadequate accommodation.
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NHS Property and Maintenance: Public Assets, Private Profits

NHS Property Services was created to manage NHS estates but inherited a chaotic legacy of undocumented tenancies and disputed bills. Many NHS buildings are now owned or managed by private equity-backed firms like Assura, which has been acquired by US investors attracted by the guaranteed income from NHS rents. This raises serious concerns about future rent hikes and the loss of public control over essential health infrastructure.

NHS Property Services, which manages a £3.8 billion estate, was described by Parliament as “set up to fail.” Seventy percent of its tenants do not have rental agreements, leading to £576 million in outstanding debt and £110 million written off in five years.
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The PPE Procurement Scandal: Waste on an Unprecedented Scale

Perhaps the most notorious PPP failure was the government’s handling of PPE procurement during the pandemic. Billions were spent on contracts awarded without competition, often to companies with political connections or no relevant experience. The government has admitted that at least £1.4 billion was wasted on unusable or undelivered PPE, with much of it now being incinerated. The National Audit Office and the Covid Inquiry have highlighted a lack of due diligence, widespread disputes over contract quality, and ongoing costs for storage and disposal.
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Shell Companies and Tax Avoidance: Hiding the Profits

Many beneficiaries of these PPPs use shell companies and offshore structures to hide profits and avoid paying UK tax. Care home operators like HC-One have shifted profits to the Cayman Islands while reporting losses in the UK and claiming public subsidies. Others, such as Care UK and the Priory Group, have used high-interest loans from offshore parent companies to create artificial losses and reduce their tax bills. Even NHS trusts have set up their own subsidiaries to exploit VAT loopholes.

HMRC estimates that tax evasion costs the UK at least £5.5 billion a year, with PPP-heavy sectors contributing significantly.
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The true scale of lost revenue is likely much higher, given the opacity of offshore structures and the lack of effective oversight.
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Conclusion: Reform is Urgent

Across healthcare staffing, social care, property management, and pandemic procurement, PPPs have too often meant vast sums of public money flowing into private pockets. Chronic underfunding, poor planning, and a lack of accountability have allowed profiteering to flourish while standards decline.

Worse, profits are often hidden through shell companies and offshore structures, depriving the UK of vital tax revenue.

It is time for a serious rethink. We need greater transparency, stricter oversight, and a renewed commitment to serving the public good over private profit. Without real reform, the cycle of waste, profiteering, and failing services will only deepen.

If you found this article informative, please share it and join the discussion on building a fairer, more accountable system for everyone.