York has become the latest battleground in the campaign to stop NHS trusts setting up wholly owned subsidiaries to avoid paying tax.

Unite, the country’s largest union, is balloting its more than 200 estates and maintenance members employed by York Teaching Hospital NHS Foundation Trust for industrial action over plans to transfer them to a wholly owned subsidiary.

The ballot for industrial action short of a strike and/or strike action opens tomorrow (Thursday 6 September) and closes on Thursday 13 September.  

Unite, with 100,000 members in the health service, has waged an extensive campaign against these wholly owned subsidiaries as they could lead to job losses and salami slicing of service provision.

Unite is concerned that trusts are forming these wholly owned subsidiary companies in England so that they can register for VAT exemption and compete on a level playing field with commercial competitors who register for VAT exemption for their work in the NHS, when NHS trusts can’t.

Unite lead officer for health in Yorkshire Chris Daly said: “We are strongly against the formation of these entities which, we believe, could lead to a Pandora’s Box of Carillion-type meltdowns – with the adverse knock-on effects on patient services and jobs.

“Our members consider that the identity of their employer is a condition of their contract of employment and do not wish that being changed unilaterally, as is proposed in this case. 

“They have a strong desire to remain employed by the trust and not to be employed by this subsidiary - York Teaching Hospital Facilities Management LLP – which has been set up with the purpose to avoid tax.  

“We are seeking an undertaking from York Teaching Hospital NHS Foundation Trust that it agrees to continue to employ all our members and not transfer them to this new subsidiary with all the negative connotations that will flow from that decision.” 

The Department of Health and Social Care announced recently that it was consulting on this issue with a view to strengthen ‘central oversight’ of wholly owned subsidiaries by asking all NHS trusts to report to them via NHS Improvement of their intention to set one up. 

Recently, two trusts - University Hospitals of Leicester NHS Trust, and the Wrightington, Wigan and Leigh NHS Foundation Trust - backed down on their plans for a wholly owned subsidiary, following pressure from health unions. 

ENDS

Notes to editors:

For more information please contact Unite senior communications officer Shaun Noble on 020 3371 2060 or 07768 693940. Unite press office is on:  020 3371 2065 Email: shaun.noble@unitetheunion.org