NHS trusts trans­fer staff to sub­sidiary com­pa­nies to cut tax bills

The Guardian - - NATIONAL - Ha­roon Sid­dique

Nine­teen trusts have trans­ferred non-clin­i­cal NHS staff into sub­sidiary com­pa­nies, via a process pre­vi­ously de­scribed as akin to “back­door pri­vati­sa­tion”, and an­other 16 have plans to do so, an in­ves­ti­ga­tion has found.

The Health Ser­vice Jour­nal re­search, pub­lished yes­ter­day, sug­gests al­most 3,000 es­tates and fa­cil­i­ties staff are al­ready em­ployed by eight trust-owned sub­sidiaries, with the ma­jor­ity hav­ing trans­ferred from the par­ent trust.

Of those in the pipe­line that pro­vided fig­ures, the av­er­age num­ber of staff be­ing trans­ferred is about 530, which if matched at all 16 trusts would equate to more than 8,000 staff.

Staff mem­bers whose em­ploy­ment is trans­ferred to the new com­pa­nies will no longer be NHS em­ploy­ees. New staff em­ployed by the sub­sidiary com­pa­nies may not be em­ployed on NHS terms and con­di­tions, and may no longer be guar­an­teed NHS pen­sions.

One of the ben­e­fits to trusts is a re­duc­tion in their VAT bills. But Labour and trade unions said the moves risked driv­ing down wages, pen­sions and con­di­tions of thou­sands of NHS staff – and there­fore ser­vice stan­dards.

Philip Hunt, Labour’s health spokesman in the Lords, has pre­vi­ously de­scribed the move as a “back­door to pri­vati­sa­tion”. He cast doubt on the ben­e­fits to the NHS of what he said was a ques­tion­able process.

He told the HSJ: “Apart from the ethics of a pub­lic body using con­sid­er­able time and re­sources to re­duce their VAT pay­ments, with no ben­e­fit at all to over­all NHS bud­gets, more wor­ry­ing is the likely im­pact on staff … Long term, this is a bla­tant at­tempt to un­der­mine na­tional pay bar­gain­ing.”

The HSJ in­ves­ti­ga­tion found that out of 19 providers that have es­tab­lished an ac­tive sub­sidiary com­pany, nine em­ploy 100 staff or more. A fur­ther 16 trusts said they are con­sid­er­ing – or are in the process of cre­at­ing – a sub­sidiary.

Northum­bria Health­care NHS foun­da­tion trust, which has one of the more es­tab­lished sub­sidiaries, told the HSJ it had re­ceived sig­nif­i­cant VAT ben­e­fits on cap­i­tal projects via its com­pany.

York teach­ing hospi­tal foun­da­tion trust, among 10 trusts at an early stage of con­sid­er­ing the move, said the new struc­ture could cre­ate £12m of VAT sav­ings on cap­i­tal projects over five years, plus re­cur­rent rev­enue sav­ings of £5.7m.

The Depart­ment of Health and So­cial Care said: “While we are clear that the NHS will re­main free at the point of use both now and in the future, it is right that NHS trusts have the free­dom to or­gan­ise their own ad­min­is­tra­tive func­tions to best meet lo­cal needs.

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