Comment by Richard Bourne

A January HSJ article has confirmed what trade union representatives and Labour MPs have repeatedly argued: that the creation of ‘wholly owned’ sub companies by NHS Trusts (and FTs) was in almost every case, a scam.

For over 5 years the trade unions aided by campaign groups have tried to stop these subcos being set up.  Pressure led to some being stopped, to debates in parliament and to changes in the rules.  

Ironically it is NHS England, which has long been suspected of forcing trusts down this route, that is supposed to approve the legitimacy of proposals for approval – a bizarre conflict of interest.  

The other disgraceful action was to block access to information. Time and again Trusts and NHS England refused to release information about why these proposals were going ahead – and refuse to consult on anything other than how the transfers of staff would take place.  

When the real documents finally emerged, and business cases revealed, the true picture was obvious; information was suppressed to prevent examination which would have shown the schemes were deeply flawed.

The HSJ investigation has now revealed that as suspected: “Some trusts are paying subco staff less than the lowest Agenda for Change rate.  They are also reducing uplift payments for unsocial hours as well as lower maternity and sick pay rates.  Staff are being denied access to the NHS pension and instead being offered schemes with significantly less generous.”

This is exactly what the trade unions said all along.  Talk of flexibility and being able to offer more pay to deal with recruitment problems was simply untrue.  

The trusts just wanted to cut terms and conditions for new staff, so they usually failed to talk to staff representatives about flexibilities and failed to examine what could already be done within Agenda for Change.  The HSJ now confirms that is what happened.

Almost all the schemes were in fact set up for tax avoidance, using a “loophole” in the rules around VAT.  But time and again trade union negotiators were told that moves to set up these subcos was not about tax at all, it was about staff flexibility and about ‘generating income’ by selling services to other organisation.  Totally untrue.

Sadly many low-paid and predominantly female staff, mostly in facilities management roles like catering, got moved out of NHS employment against their wishes into subcos.  There were many threats that if these subcos did not go ahead then the work would be ‘outsourced’: but the unions warned moving staff into a subco WAS outsourcing!

The appetite to form subcos waned after a series of victories by trade unions in major disputes such as at Bradford and Frimley Park.  Yet in the face of evidence both of tax evasion and staff exploitation it is being rumoured that the pressure is again being put on Trusts to form more tax dodging subcos.

The active role played by NHS England just adds to the growing feeling that this vast top down body is not fit for purpose.  It acts as a mouthpiece for government, and goes along with the pretence of recovery or the building of mythical hospitals, and tells staff to be more enthusiastic.  

We need a management team in NHS England that will speak up for the NHS and its staff, not connive in forcing them out of the NHS into worse terms and conditions.

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