‘Profiting from pain’: Staffing agencies made millions from the NHS

Private firms supplying medical staff to NHS Scotland have made millions of pounds of profit and paid some directors up to £800,000 as the health service struggles, we can reveal.

An investigation by The Ferret also found some recruitment agencies are owned in tax havens and that millions of pounds have been paid out in dividends to shareholders.  

Due to staffing shortages nurses have reportedly been offered £2000 a shift by agencies supplying NHS Scotland. 

We Own It – a public ownership campaign group – said it was “disgraceful” that private firms are “profiting from pain” while Scottish Labour said The Ferret’s revelations were “deeply worrying”.

The Recruitment and Employment Confederation, which represents UK recruitment businesses, said agencies play a vital role and “help keep the heart of the NHS ticking by providing health workers around-the-clock to plug gaps”. 

The Scottish Government said “new controls” were introduced in April to “gradually reduce” the number of shifts being filled by agency nursing staff.

Staff shortages are a major problem facing the NHS, making it a battle to fill hospital rotas.

Vacant shifts are initially offered internally as overtime, before being offered to an internal “bank” of NHS workers able to work ad hoc. If there are no takers, the shift is offered to agency staff on capped rates and, failing that, advertised to uncapped agency workers.

Every penny of public money spent lining the pockets of overpaid private directors and shareholders is wasted.

Johnbosco Nwogbo, We Own It

The Ferret examined NHS boards’ expenditure disclosures between April 2021 and December 2022 to reveal the companies most frequently used to source nurses and locums, someone who temporarily fills a rota gap within a hospital, clinic or practice. 

Scotland’s health boards collectively spent £985m on agency workers between 2021 and 2023. NHS Scotland spending on agency workers includes medical and dental staff of all specialities working in hospitals and GP practices. We were able to account for £100m spent on agency staffing from the expenditure reports. Reports have to include all expenses over £25,000.

The top agencies providing medical staff in between 2021 and 2022 include Scottish Nursing Guild, which was paid £25.7m by NHS Scotland. It is part of Acacium Group, owned by the Canadian private equity firm, Onex. 

Acacium Group Holdings Limited is registered in Jersey and earned £748m in revenue from placing temporary staff in 2021. Its total revenue was £851m and the highest paid director received £609,000 that year. NHS Lanarkshire paid SNG £18.8m while NHS Greater Glasgow paid £7.3m. 

Locum People, owned by Cook Recruitment Group Ltd, earned nearly £4m from NHS Grampian. Cook Recruitment Group’s latest accounts, for the end of February 2021, show a turnover of £39.6m and an operating profit of £1.1m. Its three directors received £422,000 in salaries combined. Its accounts show £339,000 was paid out in dividends. 

ID Medical Group earned £4.3m from NHS Grampian. Its latest accounts for the year ended 31 March showed an operating profit of £2.3m and its highest paid director received £814,025. Dividends to shareholders amounted to £1.1m. The firm provides acute hospital doctors, GPs, community doctors, and psychiatrists, among other medical staff. 

Those concerned over the sums paid to private firms include Johnbosco Nwogbo, a campaigner with We Own It, who argued that the Scottish Government must commit to “reinstate our NHS as a fully public, properly funded service”. He claimed that “every penny of public money spent lining the pockets of overpaid private directors and shareholders is wasted”. 

“The truth is that investing in the NHS will always provide better value. Now more than ever we need to be directing money towards our NHS, not the private firms bleeding it dry,” Nwogo added. “This latest investigation by The Ferret goes to show that we can’t trust private companies anywhere near our health service. The Scottish Government told us in May that they are ‘absolutely committed’ to opposing the role of the private sector in our NHS. Now we need to see them put that into practice: nothing to that effect was said in Humza Yousaf’s recent programme for government.”

Scottish Labour MSP Jackie Baillie said that a “lack of a sustainable workforce plan and the volume of vacancies” means the SNP are taking a “sticking plaster approach that allows private companies to charge such obscene prices” for nurses.

“This highlights exactly why it is so vital that the staffing crisis in our NHS is tackled. The SNP must make this a priority and start by filling the 7,000 vacancies currently in our NHS,” Baillie added.

This highlights exactly why it is so vital that the staffing crisis in our NHS is tackled. The SNP must make this a priority.

Jackie Baillie MSP, Scottish Labour

Alex Cole-Hamilton, the Scottish Lib Dems’ health spokesperson, said the NHS should be “run for the benefit of its patients, not for the benefit of private equity firms out to make a profit”.

“There are huge numbers of vacancies in everything from mental health to general practice. Humza Yousaf failed to tackle this as health secretary. He must do a far better job as first minister,” he added.

However, Kate Shoesmith, deputy chief executive at the Recruitment and Employment Confederation, said agencies are vital to the NHS and that the “growth in demand” for temporary staff is down to “successive governments’ inability to come up with the right workforce plan” for the NHS. 

She argued that “many healthcare workers want a greater work/life balance, and so choose to work in a temporary way”. Shoesmith added: “There are caps and controls on agency margins in the NHS – and they haven’t been reviewed or increased in years. 

“Agency workers are still health workers, and the cost of their shifts is mainly made up of the worker’s salary because an agency fee on framework is capped at around 10 per cent of the hourly rate for a nurse. It is worth reflecting that much of the increase in temporary workforce spend since the pandemic is down to NHS staffing banks and off-framework providers who are not restricted by pay caps.”

Matt Fryer, managing director of Brookson Group, said his firm provides “compliance, payroll, and accounting services” to a wide range of industries. “Our services allow hirers to compliantly engage contract workers who play a vital role in the continuous delivery of their operations,” he added.

“We are not a recruitment agency, we do not source workers and we do not set the pay rates for contract workers. The sum quoted from NHS Tayside includes wages paid to locum doctors and other flexible workers, as well as any necessary fees for payroll processing, provision of vendor management software and compliance and legal advice.”

ID Medical Group told The Ferret it is “acutely aware of the challenges the NHS faces, and continually strives to provide support and services to alleviate the pressures experienced by trusts” throughout the UK. A spokesperson added: “Our solutions have saved NHS trusts millions of pounds. We fulfil immediate contingent staffing needs to support patient safety, whilst also recruiting permanent employees for long-term fill.

“And the provision of temporary staff is only one part of our service offering. our other offerings include permanent recruitment, clinical service provision, and workforce management. All of these services successfully assist NHS trusts in reducing their overall spend and reliance on agency staff.

A Scottish Government spokesperson claimed Scotland had “historically high levels of staff in our NHS and in March last year”, adding that ministers published the National Health and Social Care Workforce Strategy, which sets out a “long-term vision for achieving a sustainable health and social care workforce”.

The spokesperson continued: “We are delivering long-term, sustainable interventions on wellbeing, leadership and equalities, to support staff and improve staff retention and service recovery. The majority of temporary staffing come from staff banks; these are NHS staff, working on NHS terms and conditions. New controls were introduced by boards from 1 April in order to gradually reduce the number of shifts being filled by agency nursing staff and from 1 June boards are no longer using off-framework agencies such as SNG, unless in exceptional circumstances.”

All the above firms were asked to comment.

In March, The Ferret revealed that private health firms operating in Scotland were charging up to £250 for 15-minute GP appointments. The companies – which include subsidiaries of US corporations – run private hospitals and clinics.