The must read stories and analysis from Wednesday
- Today’s must know: Thousands of NHS staff to transfer to subsidiary companies
- Today’s risk: Region risks losing £15m of healthcare funding
- Today’s vacancy: Regulator seeks chief executive with ‘strong moral compass’
- Today’s map: The latest delayed transfers of care performance data
Heart versus head
The most sustained funding squeeze in NHS history has led to some desperate measures being taken to find never ending cost savings.
With the low hanging fruit plucked long ago, and the balance sheet well and truly shaken, many trust bosses are having to make more difficult decisions.
In the critics’ words, a “rash” of trusts are now looking to transfer non-clinical staff to wholly owned subsidiary companies, to take advantage of a VAT loophole and get new recruits on to less expensive, non-NHS contracts.
A handful of trusts have run small portions of their estate through a subsidiary for several years, or used them as a delivery vehicle for capital projects.
But over the last year more and more trusts have announced plans for large scale staff transfers to subsidiaries that effectively replace the traditional estates and facilities department.
Gateshead Health Foundation Trust has been a forerunner, and now advises others that want to replicate its model.
There have been lots of one off reports of this happening, but an investigation by HSJ has revealed for the first time which trusts are doing it, which are planning to and to what extent.
Although most of the staff would probably prefer to be transferred to an NHS subsidiary than outsourced to a private contractor, the move has been labelled as “outsourcing by stealth” by Unison, and a “VAT scam” by Labour politicians.
One of the trusts in the process of transferring staff is Birmingham Women and Children’s FT, whose chief executive Sarah-Jane Marsh confessed on Twitter that it’s a “real head/heart issue”.
She added: “The reality is if we don’t, we will have to reduce further posts as our CIP for 2018/19 is £17m.”