‘A SIGNIFICANT victory’ for health workers is how Unite described the decision by NHS Improvement to ‘pause’ the setting up of wholly owned subsidiary companies. The plan was that NHS Trusts strip low-paid cleaners, security guards, catering staff, porters of their NHS contracts and dump them into these companies on worse pay and conditions.
However, after a string of strikes by Unite, GMB and Unison, NHS Improvements has been driven back. The news came as Unite members at East Kent Hospitals University NHS Foundation Trust, and York Teaching Hospital NHS Foundation Trust were gearing up to take strike action next week in separate disputes about being transferred to a subsidiary company.
Unite is concerned that trusts are forming these wholly owned subsidiary companies in England so that they can register for VAT exemption and compete on a level playing field with commercial competitors who register for VAT exemption for their work in the NHS, when NHS trusts can’t.
Unite is calling for HMRC to close the tax loophole, so NHS trusts are not forced to consider outsourcing NHS services to private limited companies in the form of wholly owned subsidiaries. Unite National Officer for Health, Colenzo Jarrett-Thorpe, has written to NHS Improvement chief executive Ian Dalton stating: ‘The increasing tendency of NHS trusts to create wholly owned subsidiaries in the form of private limited companies could lead to a flood of dozens of Carillion-type situations across England.
‘We believe any VAT tax saving could ultimately turn into fool’s gold, if the tax loophole is closed by HMRC.’ Unison head of health Sara Gorton commented: ‘This whole policy has been a damaging distraction. Valuable resources that could have gone on improving care have been wasted.
‘Saving money has been the sole motive for outsourcing jobs to private companies.
‘But they didn’t anticipate the outrage among staff including porters, cleaners and those in catering who want to stay in the NHS.’ Rehana Azam, GMB National Secretary said: ‘This is a significant step forward in our fight against plans to privatise the NHS by the back door.
‘It’s high time to put a permanent pause on the creation of these controversial shell companies that can dodge paying VAT, avoid transparency and opt out of the national agreements that safeguard us all. ‘NHS services must be kept in-house and staff pay, terms and conditions must be properly protected.’