• Tar Tumber
  • 5 September 2018

Trust the NHS… or stand in Unison against it?

It’s no great shock that at a time when the NHS continues to face huge financial pressures, it has been looking at creative ways to manage the service and reduce costs.  One idea that several NHS trusts have embraced is the concept of creating ‘wholly owned subsidiaries’ (WOS) to deliver some of their services, including facilities and estate management.  The key benefits are publicised as increased staff flexibility and cost savings.

This concept has been ‘trending’ over the past year or so with the trusts claiming that creating internal service providers, who sit as a separate organisation but are still owned by the trust, saves money through VAT and tax efficiencies, as they can exploit HMRC loopholes.  The same trusts also insist that by creating these subsidiaries, they can ‘sell’ their services to other NHS organisations and plough the money back into themselves. Unfortunately, the evidence for the latter is very limited so far.

Whilst there are a number of approaches that can be taken to managing the subsidiaries, most trusts taking this route have chosen to transfer the staff who currently work directly for the trust into the WOS.  Under employment legislation, the employment terms of the transferring staff are protected, but new staff can be recruited onto lesser terms and conditions – a sure fire way of saving money!  Specifically, new recruits would not have access to the nationally agreed pay and benefits, or NHS pension. The reason being cited for the latter is that the NHS pension regulations do not allow wholly owned subsidiaries to offer access to the pension scheme; although it is suggested that no subsidiary has actually applied to access the NHS pension, and that if they did, their application would be considered in a positive manner. 

The Department of Health has stated that 39 wholly owned subsidiaries have been established by NHS Trust in England, with several others currently consulting with staff about establishing a WOS and a number considering a WOS at the present time.

Unison has openly opposed wholly owned subsidiaries and called for this form of ‘backdoor privatisation’ to be stopped.  It fears there are direct consequences for healthcare employees and the NHS service overall, and has been lobbying MPs for support to halt the trend.  Most recently, Unison has raised concerns against the new WOS formation planned by the Tess, Esk and Wear Valley NHS Trust.  The plans affect over 600 staff, including maintenance, housekeepers, porters and caterers, the majority of whom have raised their concerns at the proposed transfer.  Unison has launched a petition urging the Trust not to go ahead with the WOS, and is gathering much support from staff, local people and MPs.  With the next meeting due late September, the hope is that public and staff outcry will halt the plans indefinitely.

Elsewhere, 650 support staff employed by a WOS set up by the Bolton NHS Foundation Trust, are in the process of voting for strike action as they are not receiving the nationally agreed pay increase that their counterparts are getting – these counterparts are employed directed by neighbouring hospitals. The average loss of income is reported to be circa £2,000 per year – because they are employed by a separate company, which is owned by the NHS trust.

We will find out if Unison’s tactics work in a few weeks time, but what of the staff involved?  The trusts have to protect the employment terms of the transferring staff, some of whom have 20 plus years direct service with the NHS.  However, over the long term, they could be at risk – of employment changes; of termination; of different treatment.  With the new staff on different terms and conditions, there is also the real risk of a two-tier workforce, which harbours its own issues in terms of culture and workforce engagement.  All this will undoubtedly influence how the staff work and impact on the service patients receive.  I just hope we find some pain relief before it becomes an open wound.


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