NHS trusts ‘fritter away’ millions of public money outsourcing staff to private companies, Unison says

‘Porters and cleaners did not choose to be outsourced and treated like second-class employees’

Health workers being transferred tend to be the lowest paid, such as porters and cleaners (Getty)

NHS trusts are spending millions of pounds outsourcing staff to new private companies, research suggests.

A Freedom of Information (FOI) request by Unison has revealed that NHS trusts in England are “shelling out” huge amounts of money on consultants.

The new arms-length private companies appeal to NHS trusts because they can reduce their VAT payments, and cut the pay and pensions for any new staff, Unison has said.

Only 21 out of 31 NHS trusts approached by Unison complied with the FOI request, but the amount spent by 15 of them is already more than £3.2m.

Companies are advising trusts on the setting up of wholly owned subsidiaries, to which staff are then outsourced, said the union.

Unison said health workers being transferred tend to be the lowest paid, like porters and cleaners.

Topping the list of high-spenders is Clatterbridge Cancer Centre in Birkenhead, which spent more than £661,000 establishing a wholly owned subsidiary.

The Royal Free London NHS Foundation Trust and Gloucestershire Hospitals Foundation Trust have both already spent a minimum of £400,000 setting up subsidiaries.

Meanwhile, Airedale NHS Trust in Yorkshire spent an estimated £343,000 outsourcing staff.

Sara Gorton, Unison’s head of health, 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.”

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

Jonathan Ashworth, shadow health secretary, said: “It makes no sense whatsoever that NHS trusts are spending so much money transferring their own staff out of the public sector.

“This transfer of staff to effectively private companies amounts to a back door privatisation and creates a two-tier workforce with fair pay and conditions undermined. Ministers should block this process now.”

A Department of Health and Social Care spokesperson said: “NHS trusts have the freedom to organise their work in ways that deliver improved care for patients and good value for taxpayers.

“Existing staff can be assured that if there are new partnerships or ways of operating they will retain the terms, conditions and benefits of NHS employment.”

Chris Hopson, the chief executive of NHS Providers, called Unison’s claims “misleading”. He said: “Wholly owned subsidiaries have been operating entirely without controversy in the NHS for many years. They are not private companies, they are wholly owned by the NHS trusts that set them up.

“They are not outsourcing, they are being set up in many cases to avoid outsourcing to the private sector.

“They are not being set up solely to avoid tax or cut staff pay. Terms and conditions of existing staff are protected.”

He added: “Setting up a wholly owned subsidiary can bring some tax advantages, but trusts are clear that they cannot use them solely for VAT gains, in line with official guidance.”