Private companies working in the NHS have been told to hand over information on their profit margins to the House of Commons health select committee as part of its inquiry into the private sector's role in the health service.

The committee told the Business Services Association, which represents private contractors, to supply the information, after its director-general, Norman Rose, initially told the committee he could not supply such figures due to business confidentiality.

The committee was taking evidence from the association last week at one of a series of hearings looking at whether private sector involvement represents good value for the NHS.

In reply to a question about what profit margin the contractors aimed for in deals with the NHS, Mr Rose said he could not give exact figures: 'What I can say is, we would go in for a reasonable profit. We are there to make a modest return for the company.

We are not in it to become rich.

What I do know is, from the anecdotal evidence on outsourcing, the profit margin is between 1 and 2 per cent.We have to survive in a commercial world, so. . . we have to make a return the company believes is correct.'

Mr Rose said he was sure his member companies would welcome the opportunity to provide the information, to dismiss the myths about 'fat cats' in the NHS.

Although Mr Rose sought to defend the pay and conditions of staff employed by his member companies, committee members said their recent visits to private finance initiative hospitals had revealed that things such as overtime payments, sick payments and pensions were often worse for private company staff.

In addition to backing these findings, Unison national officer Stephen Weeks told the committee that jobs were being lost. He said: 'Our anecdotal information is that the number of staff has been cut very significantly.'