NHS subsidiary companies costing millions

Subsidiary companies costing millions of pounds have been set up by NHS Trusts across England.

Using a Freedom of Information (FoI) request, UNISON has revealed that NHS trusts are shelling-out huge amounts of money on consultants. These companies are advising trusts on setting up wholly owned subsidiaries, to which staff are then outsourced.

UNISON says that these new companies appeal to NHS trusts because they can reduce their VAT payments, and cut the pay and pensions for any new staff recruited. The health workers that are being transferred tend to be the lowest paid within the NHS, such as porters and cleaners.

Only 21 out of 31 NHS trusts that UNISON approached complied with the FoI request – published to coincide with the start of its annual health conference – but the amount spent by just 15 of them is already in excess of £3.2 million.

South West NHS trusts

Topping the list of South West high-spenders is Gloucestershire Hospitals Foundation Trust, which has spent a minimum of £400,000 establishing a wholly owned subsidiary.

Salisbury Foundation Trust expects to spend £300,000 on its subsidiary companies, including a limited liability partnership set up with the Royal United Hospitals trust and Great Western Hospitals.

Yeovil District Hospital refused to comply with the freedom of information request, claiming the information was “commercially sensitive”, though this was apparently contradicted by other NHS trusts responding to the request. UNISON is aware, however, that YDH engaged QE Facilities and Bond Dickinson LLP as consultants on the subco project.

The RUH is still debating whether to go ahead with a subsidiary company, yet has already spent £250,000 on the plan.

North Bristol Trust, which runs Southmead Hospital, spent £12,000 on a feasibility study before ditching the plans, citing the anxiety caused to staff by the threat of outsourcing.

To put some perspective on the amount spent by trusts across the country, UNISON has found that the £3 million outlaid to date on transferring staff could have paid the annual salary of around 200 extra hospital cleaners*.

In the South West, around 2000 staff have been transferred from the NHS into an arms-length company. That includes 1000 in Wiltshire Health and Care LLP, 675 in Gloucestershire Managed Services, and 350 in Simply Serve (Yeovil).

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.

“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.

“Porters, cleaners and other staff chose to be part of the NHS team, not to be contracted out and treated like second-class employees.”

*Based on an NHS cleaner currently on band 1 (spine point 2) who is earning an annual salary of £15,404. UNISON believes this is of particular concern with research showing that a lack of cleaners is associated with a greater incidence of MRSA.

Last year Oxford University published a paper on the incidence of MRSA and its links to cleanliness on wards. The report said: “…we can draw on the findings of a study that introduced an extra cleaner to two matched wards for six months each, using a crossover design, and found a 27% reduction in infections with MRSA, with the benefit disappearing after removal of the cleaner (S. J. Dancer et al., 2009). This is directly relevant to our finding that outsourced cleaning employs fewer staff.”


See table for FoI responses
NHS trust Wholly owned subsidiary created? Expenditure Consultants
Clatterbridge Cancer Centre NHS Foundation Trust


Yes – PropCare £661,335 Hill Dickinson


Gloucestershire Hospitals NHS Foundation Trust Yes – Gloucestershire Managed Services £403,000, further anticipated spend of £15,000 DAC Beachcroft
Royal Free London NHS Foundation Trust Subject to a final decision by the trust board £400,000 (estimated) KPMG
Addleshaw Goddard
Chase Reeves
Bevan Brittan
Currie & Brown
Airedale NHS Foundation Trust Yes – AGH Solutions £343,000 (estimated) QE Facilities
Salisbury NHS Foundation Trust** Yes – Wiltshire Health and Care Limited Liability Partnership; Salisbury Trading Partnership; Sterile Supplies Ltd £12,000 to date,

expected expenditure £300,000

QEF Consulting
Birmingham and Solihull Mental Health NHS Foundation trust Yes – Summerhill Supplies Ltd £275,000 Deloitte

Wragges Solicitors

Royal United Hospitals Bath NHS Foundation Trust Still considering £250,000 QE Facilities
Blackpool Teaching Hospitals NHS Foundation Trust Yes – BFW Management £218,492 KPMG



Sellick Partnership (Consultancy)

County Durham and Darlington NHS Foundation Trust Yes – County Durham and Darlington Services £167,905 (including VAT)


QE Facilities


Wrightington, Wigan and Leigh NHS Foundation Trust Yes – WWL Solutions £154,027 QE Facilities
Harrogate and District NHS Foundation Trust Yes – Harrogate Healthcare Facilities Management Ltd £93,000 Hempsons

Ernst & Young

The Leeds Teaching Hospitals NHS Trust No, still considering £41,921 to date, plus further expenditure of £25,829 Attain Health Management Ltd

Bevan Brittan LLP


Birmingham Women and Children’s NHS Foundation Trust Yes – BWC Management Services Ltd £12,133 (excluding VAT)


QE Facilities

Deloitte (trust is unable to access the invoice to confirm amount paid)

North Bristol NHS Foundation Trust No, dropped plans £12,000 QE Facilities
York Teaching Hospital NHS Foundation Trust’s Yes – York Teaching Hospital Facilities Management Limited Liability Partnership £8,000 Northumbria Healthcare Facilities Management Ltd
King’s College Hospital NHS Foundation Trust Yes – King’s Interventional Facilities Management Won’t disclose on grounds that the information is commercially sensitive  
Yeovil District Hospital NHS Foundation Trust Yes – Simply Serve Will not disclose on grounds that the information is commercially sensitive QE Facilities

Bond Dickinson LLP

Gateshead Health NHS Foundation Trust Yes – QE Facilities Established over three years ago but weren’t able to provide the cost at the time of publication Deloitte
Hull and East Yorkshire Hospitals NHS Trust No, still considering None


Rotherham NHS Foundation Trust No, still considering None  
Bradford Teaching Hospitals NHS Foundation Trust No None



** Salisbury NHS Foundation Trust is involved with three subsidiary companies – Salisbury Trading Ltd (providing linen services in the trust), Sterile Supplies Limited (a joint venture with Steris – formerly Synergy – that provides sterilisation and disinfection services), and Wiltshire Health and Care LLP (formed with the Royal United Hospitals Bath NHS Foundation Trust and Great Western Hospitals NHS Foundation Trust).

The 10 trusts that failed to respond to the FoI request are:

  • Guy’s and St Thomas’s NHS Foundation Trust;
  • Central and North West London NHS Foundation Trust;
  • Northumberland, Tyne and Wear NHS Foundation Trust;
  • Northumbria Healthcare NHS Foundation Trust;
  • City Hospitals Sunderland NHS Foundation Trust;
  • Bolton NHS Foundation Trust;
  • University Hospital Southampton NHS Foundation Trust;
  • North Tees and Hartlepool NHS Foundation Trust;
  • the Mid Yorkshire Hospitals NHS Trust;
  • Calderdale and Huddersfield NHS Foundation Trust.

The information on Royal United Hospitals Bath NHS Foundation Trust is freely available on its website and so no FoI was necessary.