NHS Providers rejects subsidiary claims

Following a freedom of information request, Unison said trusts in England are spending millions of pounds to set up the arm’s length bodies. It said 15 trusts had spent an aggregate of more than £3.2m. The money was going to consultants, advising on setting up the subsidiaries to which staff are transferred.

At its health conference in Brighton, delegates warned that the subsidiaries were ‘back-door privatisation’ that would put at risk the pay and conditions of thousands of staff. The union is threatening industrial action against trusts in Yorkshire and Humberside that are considering creating subsidiaries.

NHS Providers’ chief executive, Chris Hopson, said that the claims were ‘inaccurate and misleading’. He acknowledged that there may be some tax advantages, but guidance prevented trusts from using subsidiaries solely for VAT gains.

He continued: ‘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.’

The HFMA has published a draft briefing on the financial considerations when establishing subsidiary companies or joint arrangements. The briefing covers a number of areas, including accounting, VAT, ledger arrangements and submissions to Companies House. Members have been asked to comment on the draft document by 14 June.