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The battle for York

Teaching hospital latest in wholly owned subsidiary fight
Ryan Fletcher, Wednesday, September 5th, 2018

York has become the latest battleground in the campaign to stop NHS trusts outsourcing staff to avoid paying tax.


Unite 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 (September 6) and closes on Thursday, September 13.


The union has waged an extensive campaign against NHS trusts creating wholly owned subsidiaries as they could lead to job losses and salami slicing of service provision.


NHS trusts are not allowed to register for VAT exemption, despite competitor companies working for the health service being able to do so.


Because the situation leaves them at a disadvantage, NHS trusts are creating wholly owned subsidiaries in order to avoid VAT.


Unite lead officer for health in Yorkshire Chris Daly said such subsidiaries could lead to a “Pandora’s Box” of Carillion-type meltdowns – with 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,” Daly said.


“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 the 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.


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