NHS subsidiary companies

Make your voice heard! Tell us your thoughts in our short Subco survey

NHS staff are proud to be part of one team working for an organisations with a common purpose. But NHS subsidiary companies threaten to divide the health service into little boxes. UNISON is campaigning to keep our health service united.

What are NHS subsidiary companies?

“Subcos” as they are sometimes called, are independent organisations that NHS Trusts can set up. They are like an independent business where the owner is the Trust board, initially at least. Groups of staff can be transferred to a subco which then becomes their employer. New staff would be recruited directly to the NHS subsidiary company.

So far UNISON has learnt of four subco proposals in the South West. There are many more nationally. They all affect estates and facilities staff, but some Trusts are already talking about transferring clinical staff outside of the NHS too.

  1. Yeovil district hospital wants to transfer 350 workers out. YDH have only consulted on the process of transferring staff to a subco, which indicates the decision has already been made to set up the subco. This isn’t good enough – we’re calling on them to pause and consult with stakeholders on the principle.
  2. Royal United Hospitals in Bath has said it plans to set up a subco for 500 workers
  3. Gloucestershire Hospitals Trust had a closed board meeting in November 2017 where they agreed to consult on plans to transfer 900 estates and facilities staff out of the NHS.
  4. North Bristol Trust has begun looking at a subco for up to 2000 staff.

There may be more that UNISON does not yet know about. Please get in touch if you have information about your Trust!

Why are NHS Trusts setting up subcos?

There are two main reasons that Trusts are using NHS subsidiary companies. They may claim there are other reasons but at heart it comes down to two money-saving schemes.

  1. NHS Trusts say they can claim back VAT using subcos. Their argument is based on the “Contracting Out Services Direction”, a government policy to encourage privatisation. Trusts say this means they can reclaim VAT from the treasury when they “commission” their subco to perform a service
  2. When staff are transferred into an NHS subsidiary company, they are no longer part of nationally-agreed terms and conditions (Agenda for Change). This means Trusts can change employee contracts to be less favourable.
Why is UNISON campaigning to stop the subcos?
  1. NHS subsidiary companies go directly against plans for joined up health services. They will make patient care worse by inserting yet another management structure.
  2. All parts of the NHS need to work together and in reality they do every day. Putting some staff outside the NHS defeats the message that every health employee is an essential part of the team
  3. The VAT savings that Trusts claim subcos enable are not confirmed and may not materialise. Northumbria Trust, which has set up a subco, now says there are no VAT benefits at all.
  4. Even if the VAT dodge works, it is just robbing Peter to pay Paul. There is no more money for public services as a result. The only people who benefit are the expensive consultants who produce glossy brochures selling the idea
  5. Trust bosses have been open about their desire to use subcos to cut terms and conditions. Once staff are outside of nationally-agreed NHS contracts, things like sick pay, holiday allowance, pensions and more will come under attack. Because the VAT scheme is so risky, this is the ONLY way Trusts can use subcos to save money.
What can you do to get involved?

If plans for subcos go through then other Trusts will jump on board. The break up of the NHS could happen surprisingly quickly as Trusts stop directly employing all but a few staff. The eventual situation would look like the social care sector – fragmented, with poor standards of care and bad employment conditions.

Together, we can protect one team in one NHS! To do that we need every NHS worker onboard. Here are some easy actions you can take

  2. Fill out our NHS subsidiary company survey and share it with your colleagues
  3. Sign our petition calling on Trusts to stop subcos and keep one team in one NHS.
  4. Bring yourself and your colleagues along to a UNISON workplace meeting about subcos
  5. Get more active in UNISON. Contact your branch (or regional office on southwest@unison.co.uk) about becoming a contact or representative


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