Chesterfield MP concerned about plans to transfer 800 workers to new company

Chesterfield Royal Hospital NHS Foundation Trust is consulting with workers in estates and facilities, IT, procurement and finance on the idea of setting up a subsidiary company which would be wholly-owned by the organisation.

According to the trust, the proposals could help to protect jobs and prevent outsourcing to the private sector - but the Derbyshire Times has been contacted by many hospital employees who are concerned about the plans.

Mr Perkins said: "There is a great deal of concern about this proposal and I have already met with constituents and employees who are alarmed about this development. It appears likely that the main saving will be a predominantly technical one of removing the need to pay VAT.

"Seeing as this is one Government department creating a route to forego its tax burden to another, it seems a limited basis for making a change this significant, and I suspect it is also about finding a way to reduce the amount paid to NHS staff which at a time of staff and skill shortages could be counter-productive too. It is regrettable that the shortage of funding from the Government to the NHS makes this an attractive option to Chesterfield Royal Hospital.

"I will be meeting with the hospital and trade unions imminently to learn more about why they feel they have to take this course of action but I would prefer that they do not take this route."

A trust spokesman said: "In the same way we've been candid with our staff, our governors, trade union representatives and others, we’ve offered all our local MPs the opportunity to come and find out more about the work we’re doing to explore the idea of a wholly-owned subsidiary. We're meeting Toby next month to explain to him what's happening - well in advance of the board of directors coming to any conclusions or final decisions.

"We know people are concerned about what this could mean. We're coming at it from the perspective of possibly creating a new model of company in the NHS - one that we own 100 per cent, that protects vital jobs and essential services, where staff are involved in its development and can actively participate in its future growth and success.

"We completely agree with Toby that any potential subsidiary needs to provide greater benefits than one that simply moves NHS finances around. The issue of VAT offers potential efficiencies that other NHS organisations are already benefitting from, but it cannot be a factor in developing our business case, which will need much more substantiated reasons to recommend this change."

Union's concerns

The trust spokesman explained said: "Wholly-owned subsidiaries are not new, but were endorsed through legal legislation by the Labour Government in 2006.

"They are increasing in number across the NHS as hospitals look to keep services in-house, at the same time as transforming how they work in a tough financial climate, where millions of pounds need to be saved.

"Staff transferring to NHS subsidiaries are protected by national TUPE agreements, so they keep their national terms and conditions, including pay, pension and annual leave."

The union UNISON believes wholly-owned susidiaries are 'a form of backdoor privatisation' with 'potentially damaging ramifications for the NHS'.

The UNISON website states: "UNISON is working closely with branches that are affected by plans to set up wholly-owned subsidiary companies, with targeted resources deployed to assist local campaigning.

"We are raising the issue at Westminster with political parties and MPs to get politicians involved in campaigns.

"UNISON is lobbying the national NHS bodies to clamp down on this behaviour by trusts."