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NHS Outsourcing and Privatisation

Part of Royal Assent – in the House of Commons at 6:46 pm on 23rd May 2018.

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Photo of Alex Cunningham Alex Cunningham Labour, Stockton North 6:46 pm, 23rd May 2018

For now, NHS trusts remain the sole shareholder in their wholly owned subsidiary companies—yes, just for now—but those subsidiary companies will be easier to sell in future. The trusts have established those subsidiaries with long contracts under the misguided impression that such contracts protect the trust and the employees. What the trusts do not acknowledge is that the current Government, or a future Government, could order them to sell off a subsidiary company, contracts and all, and, if necessary, could change the law to make it happen.

We have already seen how these new subsidiary companies make their margins off the backs of now former NHS staff who face the prospect of less favourable contracts with no access to the NHS pension scheme, yet some trust executives claim they are transferring employees to protect them. That is absolute rubbish. We all know that when staff are transferred by TUPE, the receiving employer can have a reorganisation. It can create new roles and axe old ones, and it can require people to apply again for what looks like their old job with some subtle changes, with the terms and conditions varied, putting an end to the protections they once enjoyed. This creates the two-tier workforce many others have spoken about today. It means that some people are being treated better than others, with more rights, better pay and better working conditions.

I have even heard that some of these executives believe the changes could be in the best interest of the workforce. None of these executives faces the prospect of being reorganised out of their job or out of their final salary pension scheme with a 15% employer contribution. The executives will continue to get that pension, yet the people they have shifted into new organisations will get a 3% employer contribution to their pension.

In a few years’ time it will be interesting to see just how many of the original staff are still in these organisations and how many of them are on the same terms and conditions enjoyed by NHS staff who are still employed directly.

I am proud that, just a week ago, one of the teams at the North Tees and Hartlepool NHS Foundation Trust in my Stockton North constituency was shortlisted for the NHS 70th awards, but a few months ago even this trust succumbed to temptation and set up one of these wholly owned subsidiary companies, despite the accounts for an existing subsidiary company showing it needed a bail-out from the trust to survive.

Wholly owned subsidiary companies are not working. They are a mechanism to rid employees of their NHS pension and of collective bargaining. The companies are damaging to employees, and they are damaging to the service in the longer run. What they are really doing is severely damaging the morale of our staff.