Increased agency staff costs and reductions in the NHS tariff hit profits at a large private hospital group, its annual accounts reveal.

Ramsay Health Care’s accounts, published last week, said: “The UK trading environment remained challenging during [the financial year ending 30 June] and whilst volumes grew in total driven by NHS and self-pay growth, reductions were seen in private medical insurance volumes.”

Total operating profit before exceptional charges fell by 5.8 per cent year on year to £30.6m.

The £441m turnover organisation said 77.9 per cent of its total admissions were NHS funded, up from 77.3 per cent the previous year.

The report said: “NHS volumes have grown in the period but the rate of growth has been slower compared to previous years.”

The Australian owned group had signalled its commitment to the UK business with a total capital spend in-year of £37.5m, £18.9m of which went on expanding capacity, the report added. It currently operates from 31 facilities registered with the Care Quality Commission.

The company’s directors noted there was a risk to cash flow from slow payments by clinical commissioning groups.

The report also said: “The recruitment of certain groups of clinical staff remains competitive and is an issue faced by the whole sector. This resulted in higher use of agency staff at higher costs, which have impacted on operating profit.

“Ramsay is tackling these issues by additional investment in developing its own staff to fill these roles and also by recruiting from overseas including other parts of the wider Ramsay group.”

Ramsay Health Care UK chief executive Andy Jones said: ”There are an increasing number of people waiting for treatment in the UK and we see both short and longer term opportunities, working in local partnership with NHS commissioners and trusts, to deliver higher levels of elective care through new models of working.

”This includes adopting the model from our Australian operations of opening a series of dedicated day surgery units.”