Even though a key point in the establishment of the NHS was the nationalisation of hospitals, ‘retail investor’ Assura makes 80% of its income from renting buildings to the NHS. With that in mind, it’s obvious why they rejected a fourth bid from US private equity company KKR, which valued the NHS landlord at £1.56bn.
The dismantling of the NHS
Neoliberals have found many ways to cream profits from public healthcare budgets over the years. But it’s not just the use of dodgy private finance initiatives (PFIs) to fund hospitals (these see the public purse charged billions more in interest than the actual value of the buildings). It’s not just private provision of NHS services (where private companies take profits from NHS budgets).
Assura are literally investing and then renting hospitals to the NHS at a 95% profit margin when you consider that they own and can sell the buildings themselves (unlike once PFI is paid off). For the 2023/24 year, its passing rent roll was £150.6m and it’s net profit was £143.3m.
Andrew Saunders, a property analyst at Shore Capital, said:
The income attractions to any bidder are clear and rents are also growing
Assura: raking it in from the public purse
Assura was established in 2003 and owns over 600 healthcare buildings, the majority of which it leases to the NHS.
Yet it makes no sense for the NHS to rent hospitals from the private sector. When the NHS previously built new hospitals like the expansion to district general hospitals in the 1960s, the government funded the buildings. There were no dodgy PFI contracts nor rent-extraction from companies like Assura.
There are 7.46 million cases on the NHS waiting list. But Matthew Taylor, the chief executive of the NHS Confederation, has said the NHS needs an extra £6.7bn per year just to maintain its estate. Labour has claimed it’s providing an “additional” £13.6bn in capital funding, but that’s actually a £3.1bn increase on the 2023-24 capital budget.
So the NHS doesn’t even have enough to maintain itself, yet alone expand its capacities. With Assura a sought after corporation, does Keir Starmer plan to rent more hospitals from private companies or engage in more profit heist PFI contracts?
In one case, Tonbridge & Malling Borough Council in Kent sold land to Assura at a discounted rate. Assura then owned the site and rented it back to the NHS.
What a scam.
Featured image via the Canary
