After months of dispute, the government has decided to bring an end to the farce of NHS Trusts forming wholly owned subsidiary companies – subcos – to avoid tax and to threaten staff terms and conditions.
In an announcement sent to all Trusts by NHS England’s ‘Financial Reset and Accountability Director’ Glen Burley (previously a leading advocate of subcos) states that any subcos involving the transfer of staff will now only be approved “in a limited number of circumstances, and only when there is clear union support”.
This is a historic achievement for the trade unions and the staff that have fought the imposition of subcos in Dorset and Newcastle. Other, more half-hearted proposals, will now presumably be quietly stopped.
The drive for subcos began with a small number of cases put up from 2015 – 2019, in which trusts proposed transferring hundreds of low-paid facilities management staff into subcos. If these had been “clinical” staff then Trusts would have been forced to follow proper procedures, but these staff were “other”. These plans were strongly opposed and, in almost every case, defeated. These disputes, especially in Bradford and Frimley Park, brought an end to the first wave of subcos. Wider interest also meant that assurances had to be given to HM Treasury that the NHS was not engaging in tax avoidance.
Opposition from trade unions and from Labour MPs (including some who are now Ministers) who had campaigned against subcos led to tighter regulation, finally published in 2024. This included significantly stronger measures to prevent tax avoidance. In theory, NHS England had to ensure that proposals were for operational or commercial reasons and not to gain tax advantages.
Full article in The Lowdown, 29 September 2025
