The three-month agreement sees private healthcare staff and facilities put on standby to support the NHS should Covid cause unsustainable levels of hospital admissions or staff absences.
When the deal was announced on Monday, health officials did not disclose the sum to be paid to the independent sector.
But it has since emerged that the private hospitals will earn a minimum of between £75 million and £90 million per month, which they will receive upfront.
It is a minimum income guarantee of between £75 and £90 million a month, which will double if its actually used. Why is it such an emergency now? Surely this sort of planning could have happened ahead of time.
This could reach up to £175 million per month, depending on the level of services used.
A letter from NHS England boss Amanda Pritchard to Health Secretary Sajid Javid states that the deal comes with a “minimum income guarantee”.
“We estimate that value based on current information at between £75-90 million a month,” the letter states.
“However, in the event that any system requires surge arrangements to be put in place, the cost recovery arrangements then applicable will be significantly more expensive at around £175 million a month.”
✳ The letter from @NHSEngland Chief Exec to @DHSCgovuk @sajidjavid on buying #private sector #healthcare capacity - for #elective care inc #backlog #waitlist while our #NHS is fully occupied with #Covid19 - discussed in the hearing today can be found here https://t.co/I56rVlP2BZ
— Public Accounts Committee (@CommonsPAC) January 12, 2022
Ms Pritchard points out that this is, on a per bed basis, “significantly more expensive than the equivalent cost of an NHS site with much less certainty on the potential staffed capacity.”
“It is proposing in order for the independent private sector providers to be ready to stand up at a moment’s notice – seven days – that the cost would be between £75 to £90 million pounds a month based on current information.”
Ms Hillier, chair of the Committee, asked: “Are you content with this very large expense taxpayers being exposed to?”
Sir Chris Wormald, permanent Secretary to the Department of Health and Social Care, said that he was “content the decisions had been made properly”.
Ms Hillier continued: “There is a very big liability there for the taxpayer. Nightingale hospitals were stood down and a not all of the private sector capacity was used last time.”
She added: “The key thing is this is a ministerial direction on an issue we have now been dealing with for two years… it is a minimum income guarantee of between £75 and £90 million a month, which will double if its actually used.
“Why is it such an emergency now? Surely this sort of planning could have happened ahead of time.”
Sir Chris referred to the new Omicron variant but Ms Hillier interrupted him adding: “But we knew from the beginning of the pandemic, variants were talked about right back in March 2020.
“The question is, why wasn’t there a better plan in place that avoids having to pay a minimum income guarantee of that level to the private sector whether or not they deliver?
“Surely by now we’d have got into a better place of negotiation to make sure that we can deliver that extra surge capacity at a lower costs to the tax payer and not do it as an emergency?”
Sir Chris replied: “We have in this case a surge that has the risk of having very severe consequences for the NHS and this is one of the mitigations.”