About 1,000 NHS staff at Frimley Health NHS Foundation Trust could face being transferred to a wholly owned subsidiary (WOS) designed to avoid paying tax.

Unite, Britain and Ireland’s largest union, has hoisted a red warning flag over the possibility that trust bosses will consider hiving off services, such as housekeeping, estates management, equipment maintenance, catering, procurement and security to a WOS.

Unite, which has 100,000 members in the health service, is expecting the business report on the WOS to be unveiled on Friday (14 June), with it going to the next meeting of the trust’s board.

Unite 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.

The Frimley trust provides NHS hospital services for about 900,000 people across Berkshire, Hampshire, Surrey and south Buckinghamshire.

Unite regional officer Jesika Parmar said: “Unite is raising a red warning flag to what could be coming down the track for 1,000 dedicated staff working for the trust.

“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.

“They have a strong desire to remain employed by the Frimley Health NHS Foundation Trust and not to be employed by this subsidiary -– which could be set up with the purpose to avoid tax.”

The Department of Health and Social Care announced last year that it was consulting on this issue. The consultation ended in November and requirements that trusts and foundations have to meet to create wholly owned subsidiaries were tightened up.

This also included a condition to consult stakeholders, such as staff and the wider community.  However, it is still not known what the criteria are for such consultations.

A number of trusts have already decided to abandon plans to set up such a subsidiary.


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

  • Unite is Britain and Ireland’s largest union with members working across all sectors of the economy. The general secretary is Len McCluskey.