Regulator tells NHS trusts to stop setting up controversial subsidiaries

21 Sep 18

The regulator has told NHS trusts to stop setting up controversial wholly owned subsidiaries until further guidance is issued.

NHS Improvement has ordered trusts to “pause any current plans to create new subsidiaries or change existing subsidiaries” while it consults on a new regulatory approach in October, in a short statement on its website. 

Trusts have used wholly owned subsidiaries to employ staff such as cleaners and porters and people overseeing facilities management for several years.

They have said there are advantages, such as having flexibility with pay as subsidiary staff are not given wages according to the NHS Agenda for Change pay scales. 

But unions have campaigned to prevent trusts setting up these companies, which they claim are detrimental to workers and patients. 

Unions have said these companies are set up to save trusts money through a tax loophole, and doing so means staff are no longer employed on NHS-standard contracts. 

Colenzo Jarrett-Thorpe, Unite national officer for health, said: “We regard this as a significant victory in Unite’s long-running campaign to stop the creation of such subsidiaries - and then to reverse them. 

“We believe this is in the best interest of patient safety and our members who wish to remain employed by the NHS and not outsourced to an outfit where their pay and employment conditions could be seriously eroded.”

Unison’s head of health Sarah Gorton said: “This whole policy has been a damaging distraction. 

“Saving money has been the sole motive for outsourcing jobs to private companies. Cash-strapped trusts have seen it as an opportunity for solving their financial woes. 

“But they didn’t anticipate the outrage among staff who want to stay in the NHS.” 

Unite members in East Kent Hospitals University NHS foundation Trust and York Teaching Hospital NHS Foundation Trust will strike next week after both trusts chose to ignore NHS Improvement’s calls for a pause to plans. 

In July, Wrightington, Wigan and Leigh Foundation Trust reversed plans to transfer 900 workers to an NHS subsidiary after union members there went on strike. 

Did you enjoy this article?