HSE set to pay €3.5m to private equity-backed British investment fund

Since 2020, Valley Healthcare has held an operational lease on primary care centres in Ballincollig, Clonakilty, Fermoy, Listowel and Tralee, with plans to develop more centres in Bishopstown, Douglas, Glanmire, and Mayfield that will be leased to the HSE

Ballincollig Primary Care Centre: Valley Healthcare has held an operational lease on the centre since 2020.

A company linked to private equity-owned British investment fund John Laing is set to receive about €3.5m this year from HSE payments for the leasing of primary care centres across Cork and Kerry.

Valley Healthcare DAC, which forms part of the Infrastructure Investment Fund, is involved in four of the eight planned primary care centres across the county.

It will develop primary care centres in Bishopstown, Douglas, Glanmire, and Mayfield in Cork that will be leased to the HSE.

The Valley Healthcare fund was established in 2017 to acquire and develop social infrastructure assets. John Laing, one of its key backers, is owned by private equity giant KKR.

Since 2020, Valley Healthcare has held an operational lease on primary care centres in Ballincollig, Clonakilty, Fermoy, Listowel, and Tralee.

It says it leases assets to the HSE under long-term inflation-linked lease arrangements, while other tenancies comprise GP centres and pharmacies. 

Leases for the primary care centres typically run for 25 years, with an option to extend the contract for a further five.

Opposition politicians have raised alarm at what they view as a creeping privatisation of the health sector.

Sinn Féin TD for Cork North Central Thomas Gould said the spend on Valley Healthcare’s properties raised serious questions about the use of public money. 

“Millions will be paid out to just one company — they are set to make €75m over the next 25 years on their existing buildings, with more in the pipeline," he said.

“At the end of this, the HSE will have spent millions but won’t own a building. Communities don’t stop needing primary care centres after 25 years. Paying investment funds to rent buildings that the HSE maintains and staffs is not a good plan.” 

Construction of the Mayfield/Ballyvolane primary care centre is set for completion in the second quarter of 2028.

In response to parliamentary questions from Mr Gould, the HSE said the leases for primary care centres were the subject of “a robust internal review process” that determined value for money.

It said cost decisions were determined by the date of the lease, location and size of care centres and the number of services they could provide.

Cork South Central Social Democrat TD and chair of the Oireachtas health committee Pádraig Rice said Valley Healthcare's involvement in the sector stood in opposition to the purported aims of Sláintecare, the State's universal healthcare plan.

“The provision of primary care centres should not be largely left to the private market, as is currently the case,” Mr Rice said.

“Unless the State takes the lead, areas most in need of good primary care services will continue to be least likely to get such a centre.

“Given how central a strong network of primary care centres is to the full implementation of Sláintecare, delivery of these centres should be State-led and guided by the principle of healthcare equity.” 

Eight years ago, the Comptroller and Auditor General recommended a review of the cost-effectiveness of different delivery methods for primary care centres. The review has yet to be carried out, according to the public body.

The HSE was asked for comment.