And back to Circle.
You will recall that this company gained the right to run an NHS hosptial (Hinchinbroke) with much fanfare and a heavy emphasis on its structure. It was presented as a "John Lewis style" enterprise, though workers only owned 49% of it through a company called Circle Partnership Ltd, and the rest was held by an offshore outfit called Circle Holdings: essentially a hedge fund (see upthread). We were invited to believe that this was an exciting new development in health care where clinical excellence would be ensured through the incentives provided by employee participation in ownership and, presumably, management
It is interesting to find that this much vaunted arrangement is coming to an end, though curiously this has not been so widely reported. Odd that.
On 2/12/13 it was reported that Circle Partnership had signed an agreement to advise a chinese financial multi national called CITIC on how to duplicate its employee ownership model.
On 23/12/13 it was announced that Circle Holdings intended to acquire Circle Partnership: so it seems they are selling a failed model to the Chinese. Interesting.
This has now happened. The hedge fund majority owner, Circle Holdings, has "acquired" the 49% previously owned by the employees through the company Circle Partnership Ltd. According to Private Eye the stated reason for this change is that the mutual model was "overly complex and costly to administer".
It is presumably wholly unrelated to the fact that the company is still losing money (it has never made a profit nor even broken even) and is still incurring debt, from investors who may well be influenced by the fact that many NHS trusts are in financial trouble because of the PFI scandal. When an NHS facility cannot balance its books it is obvious that something has to be done. That something is very likely to be handing the facility over to a private company which cannot balance its books either. Makes sense to me: not!
Some of the employees were expected to be offered free shares in the larger company (which presumably means that they don't get any money for their existing shares) but no proportion was to be reserved for employees and of course their holdings will be a smaller proportion of the larger company than they were of Circle itself.
It seems to me that the model which was so widely touted was nothing more than spin to help soften public attitudes to NHS privatisation: it has served its purpose and now it is gone. Why am I not surprised?
ETA: handy outline of some of the information available about Circle here
http://nhsforsale.info/private-providers/p...2/circle-2.htmlEdited by FionaK - 29/1/2014, 17:00
