NHS Wholly Owned Subsidiary Companies Debate
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Jim Shannon
Main Page: Jim Shannon (Democratic Unionist Party - Strangford)Department Debates - View all Jim Shannon's debates with the Department of Health and Social Care
NHS Wholly Owned Subsidiary Companies
Jim Shannon Excerpts(6 years, 9 months ago)
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Liz Twist
I most certainly do agree with my hon. Friend. We know that NHS trusts are under incredible financial pressure and are looking for ways to stretch the available funds. Some trusts have seen wholly owned subsidiaries as a way of reducing costs. Those trusts include the Gateshead Health NHS Foundation Trust, which provides excellent hospital services to many of my constituents.
The cost savings come about in two main ways: through saving VAT and by saving on staffing costs. For some, there may be a third area of income—advising other NHS trusts on going down the same path, which is one of the reasons why they are spreading across the country. In November 2017, the then Health Minister, the hon. Member for Ludlow (Mr Dunne), stated that:
“NHS Improvement is aware of 39 subsidiaries consolidated within the accounts of foundation trusts”—[Official Report, 14 November 2017; Vol. 631, c. 129.]
We know that more are being created even now.
Jim Shannon (Strangford) (DUP)
The issue of pensions is very much at the forefront of the minds of myself and others in this House. Does the hon. Lady agree that it is essential that staff working through the front door of the NHS or the back door of the wholly owned subsidiary company must be entitled to retain their NHS pension? Any attack on the pension scheme must be wholly rejected and the trusts must all be made to understand the position on pensions when these types of actions are taking place.
Liz Twist
I most certainly do agree, not just for pensions but also for terms and conditions.
What is the problem with these companies? First, it is that they come at a price, which for the most part is met by the staff who work for them. Secondly, the VAT saved by trusts with these companies is not new money coming into the NHS—the money that trusts save will be lost elsewhere in public services. Already, the Department of Health and Social Care has reminded trusts by letter that they should not engage in any activities that may be construed as tax avoidance, and the loophole could be closed in the future. Thirdly, the establishment of wholly owned subsidiaries leaves the services open to privatisation in the future, continuing the fragmentation of our NHS.