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Unite, the union, has hailed victory at the NHS trust in Leicester which has now abandoned its plan to set up a wholly owned subsidiary to avoid paying tax.

Unite, with 100,000 members in the health service, said the decision by University Hospitals of Leicester NHS Trust is ‘a victory in the long campaign against the creation of such subsidiaries which could lead to a Pandora’s Box of Carillion-type meltdowns’.

It is understood that the Leicester trust abandoned its proposal when NHS Improvement said it was ‘unlikely’ that approval would be given by Matt Hancock, the new secretary of state for health and social care.

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 national officer for health Colenzo Jarrett-Thorpe said: “This is very good news that the NHS trust in Leicester has backed down over its plan to set up a hived-off tax avoiding subsidiary.

“This is a significant victory in our campaign to stop these entities being formed which, we believe, could lead to a Pandora’s Box of Carillion-type meltdowns – with the adverse knock-on effects on jobs and patient services.”

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

Colenzo Jarrett-Thorpe added: “We want Matt Hancock to enforce a moratorium on the further creation of other wholly owned subsidiary companies while this consultation is taking place and for those that are in the process of being created to be paused while the consultation takes place.”  

Unite  is concerned that the 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.

Recently, following protests, the Wrightington, Wigan and Leigh NHS Foundation Trust backed down on its plan for a wholly owned subsidiary.

Notes to editors:

NHS Improvement is responsible for overseeing foundation trusts and NHS trusts, as well as independent providers that provide NHS-funded care.

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