Growing numbers of hospital trusts are transferring staff into newly created private subsidiary firms in a move health unions warn will create a “two-tier workforce” in the NHS. Trusts are starting to see subsidiaries as a way of saving money after seven years of below-inflation annual budget increases and mounting financial problems due to an increased demand for healthcare.
Nineteen NHS trusts in England have already established a wholly owned subsidiary and begun transferring thousands of non-medical staff to them. Sixteen other trusts are considering doing the same in a fast-growing change in practice that they insist is intended to save money as employers, especially through paying less VAT. While private firms working for the NHS can claim back any VAT they are charged by the government, an NHS trust cannot, under the terms of the 1994 VAT Act.…read more