NHS privatisation threat

Unite is continuing its campaign against NHS privatisation – most recently by raising a warning flag over proposals to transfer 1,000 staff at Frimley Health NHS Foundation Trust to a wholly owned subsidiary designed to avoid paying tax.

The Trust’s management are now considering hiving off services such as housekeeping, estates management, equipment maintenance, catering, procurement and security to the subsidiary, which the union believes could lead to job losses and the salami slicing of service provision.

The move could be especially disastrous given that Frimley trust provides hospital services for nearly a million people across Berkshire, Hampshire, Surrey and south Buckinghamshire.

Unite said it is awaiting a business report on the subsidiary which is set to be unveiled on Friday (June 14), when it will be shown at the next meeting of the trust’s board.

Commenting on the development, Unite regional officer Jesika Parmar said the the union was “strongly against” the formation of wholly owned subsidiaries because they “could lead to a Pandora’s Box of Carillion-type meltdowns – with the adverse knock-on effects on patient services and jobs”.

“Our members consider that the identity of their employer is a condition of their contract of employment and do not wish that being changed unilaterally,” she added.

“They have a strong desire to remain employed by the Frimley Health NHS Foundation Trust and not to be employed by this subsidiary.”

Parmar highlighted a point Unite has previously made about wholly owned subsidiaries – that trusts form the entities so that they can register for VAT exemption and compete on a level playing field with commercial competitors, who are able to secure VAT exemptions while NHS trusts themselves cannot.

The latest wholly owned subsidiary threat comes after the Department of Health and Social Care announced last year a consultation on subsidiaries which ended in November.

The outcome of the consultation was tighter requirements on trusts before they can set up wholly owned subsidiaries. Trusts are also now required to consult with staff and the wider community but there is no explicit criteria for such consultations.

Unite has waged an ongoing campaign against wholly owned subsidiaries. It was an issue raised at last year’s Labour conference, when Unite member Simon O’Keefe, who has worked in the NHS for 16 years, highlighted their dangers.

Addressing conference, he said, “Up and down the country NHS Trusts have been outsourcing staff into new private companies – dubbed as wholly owned subsidiaries – in order to exploit a tax loophole and attack staff terms and pay.

“We are told that this is not privatisation because they are still owned by the NHS,” he added. “That is simply not true. These companies are transferring hard working NHS staff and assets out of the public sector, out of national bargaining, and out of the NHS. Like Carillon there is no protection from failure and no accountability.”

Last year, a number of trusts abandoned plans to set up a wholly owned subsidiary, including University Hospitals of Leicester NHS Trust and Wrightington, Wigan and Leigh NHS Foundation Trust, which scrapped their proposals after protests and strikes from Unite members. Bristol Trust likewise dropped plans to set up a subsidiary after pressure from Unite and other health unions.