Unison investigation shows NHS trusts are spending millions on setting up outsourcing firms

More than £3.2 million has been spent on subsidiary companies that will lead to pay and pension cuts

NHS trusts are spending hundreds of millions of pounds outsourcing staff to new arms-length private companies, research has revealed.

A Freedom of Information (FOI) request by trade union Unison shows that trusts in England are spending more than £3.2 million on consultants. Companies are advising trusts on the setting up of wholly-owned subsidiaries, to which staff are then outsourced, said the union.

Unison said the new companies appeal to NHS trusts because they can reduce their VAT payments and cut the pay and pensions for any new staff. Health workers being transferred tend to be the lowest paid, such as porters and cleaners, said Unison.

High spenders

Only 21 out of 31 NHS trusts approached by Unison complied with the FOI request but the amount spent by 15 of them is already more than £3.2 million.

Topping the list of high spenders is Clatterbridge Cancer Centre in Birkenhead, which spent more than £661,000 establishing a wholly-owned subsidiary.

The Royal Free London NHS Foundation Trust and Gloucestershire Hospitals Foundation Trust have both already spent a minimum of £400,000 setting up subsidiaries. 

Airedale NHS Foundation Trust in Yorkshire spent an estimated £343,000 outsourcing staff, said Unison.

Two-tier workforce

Unison head of health Sara Gorton said: '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 huge squeeze on resources.

This transfer of staff to effectively private companies amounts to a back-door privatisation and creates a two-tier workforce with fair pay and conditions undermined

Jonathan Ashworth

'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. There is also no evidence that these new companies improve efficiency or productivity.’

She added: ’Porters, cleaners and other staff chose to be part of the NHS team, not to be contracted out and treated like second-class employees.'

No sense

The research was published at Unison's annual health conference in Brighton.

Shadow health secretary Jonathan Ashworth said: 'It makes no sense whatsoever that NHS trusts are spending so much money transferring their own staff out of the public sector.

'This transfer of staff to effectively private companies amounts to a back-door privatisation and creates a two-tier workforce with fair pay and conditions undermined. Ministers should block this process now.'

Earlier this year, nurses were among staff that protested outside Gloucestershire Royal Hospital over the trust's plans to create a subsidiary company.

At the time, a trust spokesperson said it had given written assurances to staff that their existing terms and conditions, including pay and pension rights, would be protected under the changes.

The issue of subsidiary companies is to be debated at RCN congress next month.

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