NHS WORKERS GO PRIVATE TO SAVE VAT CASH Labour fears switch will hit jobs and pay
LABOUR is demanding an end to a VAT loophole used by NHS trusts which could put thousands of jobs at risk.
Eight trusts have set up private companies and transferred 3,000 support staff such as cleaners and porters into them.
A Health Service Journal report claims 16 more trusts are drawing up similar plans, affecting another 8,000 staff, to save on VAT bills. Shadow Health Secretary Jonathan Ashworth will write to Jeremy Hunt to tell him the move means an “unacceptable two-tier workforce”. He will accuse the Health Secretary of “back door privatisation” by taking staff off the NHS payroll. Mr Ashworth is worried the move might lead to poorer pay and conditions, and fears doctors and nurses could be included too. Gloucestershire Hospitals expects £3.5million a year of savings in pay and VAT by moving 900 staff to a wholly-owned subsidiary firm. And York Teaching Hospital estimates it could recover £4.9million.
The switch saves cash because healthcare is not VAT-rated so trusts cannot claim refunds, while firms can.
Trusts are offering the same NHS pay and pensions for transferred staff but not to newcomers.
Mr Ashworth will tell Mr Hunt: “Hospitals are reaching for ever more complicated schemes to save money.
“It’s yet another pernicious consequence of the desperate financial squeeze you have imposed.”