The new threat from SubCos
An NHS wholly-owned subsidiary company (SubCo) is a private company, set up by a NHS Foundation Trust (FT) or an NHS Trust to which they can transfer in-house support services and staff, as well as associated equipment and property, such as hospitals and land. Most trusts that have created SubCos have done so to cut costs in response to NHS underfunding.
The growth of SubCos declined around 2018/19, but are back in the news because the new transitional Chief Exec of NHS England (NHSE), Jim Mackey, has told all NHS trusts that they should normally transfer support services and staff to SubCos (or expand the scope of existing subsidiaries) to reduce costs .
SubCos have been seen as a backdoor way of privatising the NHS. They are also notorious for saving money through creating a two-tier workforce, with new staff put on worse pay, terms and conditions than staff transferred from the NHS. Jim Mackey says this is wrong and that other ways of cutting costs must be found, such by using a tax loophole that allows Trusts to claim VAT refunds (something that NHS Improvement described as akin to tax evasion). Mackey also seems unaware that the Treasury is likely to introduce new VAT arrangements that will leave Trusts with SubCos worse off. So is there a different motive than just cost cutting behind the new push for SubCos – such as using them to dispose of NHS assets or for attracting private investment?
Whatever the reason, the use of NHS SubCos has to be fiercely resisted.
Read more here about SubCos, including how to fight them
- Five things to know about NHS SubCos, including information on SubCos, resources and campaigning ideas.
- What lies behind the new push for NHS SubCos? an article that expands on the Five things to know article.
- How come we didn’t know about NHS SubCos This in-depth report is based on research looking at 19 Trusts that were planning, pausing or cancelling plans to create SubCos in 2018. The findings are still highly relevant for campaigners today. The research informed the travelling photographic exhibition of the same name, which is being updated to take the current context into account, and will soon be available as a resource for local campaign groups. It can be borrowed free of charge for showing in local venues to raise awareness. Illustrated copies of the report will also be available for a small charge, to accompany the exhibition. For more details contact [email protected].