Hospital trusts are spending millions of pounds setting up arm’s-length private companies, which health unions fear will turn staff transferred into them into “second-class employees”.
Fifteen trusts in England have already spent £3.2m between them creating wholly owned subsidiaries, figures released under the Freedom of Information Act show.
The Clatterbridge Cancer Centre trust on Merseyside, one of the NHS’s cancer hospitals, has spent the most – £661,335 – on setting up a firm called PropCare with the help of consultants Hill Dickinson and KPMG.
Gloucestershire Hospitals trust has spent £403,000 establishing Gloucestershire Managed Services, with a further £15,000 likely. The Royal Free trust in London has also used an estimated £400,000 of its budget, though its board has yet signed off the creation of the company involved.
Unison, which obtained the figures, said it was “a disgrace” that cash-strapped hospitals were using vital NHS resources to establish private firms that give staff inferior pay and pensions. While transferred staff retain their NHS terms and conditions, new joiners do not.
“The amount of public money being frittered away on transferring NHS staff to private companies is a disgrace, especially at a time when there’s such a squeeze on resources,” said Sara Gorton, Unison’s head of health.
“These wholly owned subsidiaries are creating a two-tier workforce where new staff are likely to be far worse off in terms of their pay and pensions. Porters, cleaners and other staff chose to be part of the NHS team, not to be contracted out and treated like second-class employees.”
Nineteen NHS trusts have already set up at least one wholly owned subsidiary, eight of which have had an estimated 3,000 staff – mainly cleaners, porters and maintenance workers – moved into them. At least 16 other trusts are considering doing the same with 5,000 more personnel. Such firms can bring tax and VAT benefits for trusts that set them up.
Labour’s shadow health secretary, Jonathan Ashworth, said: “This transfer of staff to effectively private companies amounts to a backdoor privatisation and creates a two-tier workforce with fair pay and conditions undermined. Ministers should block this process now.”
However, NHS Providers, which represents hospital trusts, denied that such firms constitutes privatisation and insisted they help avoid trust staff being outsourced.
“Unison’s claims are inaccurate and misleading. Wholly owned subsidiaries have been operating entirely without controversy in the NHS for many years,” said Chris Hopson, its chief executive.
“They are not private companies; they are wholly owned by the NHS trusts that set them up. They are not outsourcing; they are being set up in many cases to avoid outsourcing to the private sector.
“They are not being set up solely to avoid tax or cut staff pay. Unions are recognised and there is extensive consultation with staff.”
ends