Hospitals across Yorkshire could follow ‘VAT scam’ Trust, warns MP

Airedale General Hospital in Steeton, Keighley. Picture: '' / Chris Fairweather
Airedale General Hospital in Steeton, Keighley. Picture: '' / Chris Fairweather
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AN MP who campaigned to stop a hospital trust forming a new company to run services in a move he described in Parliament as a “VAT scam” has warned many more could be on the way across Yorkshire.

Keighley’s Labour MP John Grogan has pledged to bring cross-party colleagues together with health ministers to discuss the proliferation of NHS trusts forming subsidiary companies to run non-clinical activities such as facilities, estates and purchasing - measures critics say will lead to lower wages and poor conditions for staff, and amount to “backdoor privatisation” of the NHS.

Following Airedale NHS Trust’s decision to create a private company to run some services at its hospital in Keighley, made in private at its board meeting last week, Mr Grogan raised the issue in Parliament, with Leader of the House of Commons, Andrea Leadsom, calling the decision “concerning” and urging him to take it up with health ministers.

Mr Grogan said: “Now that such a senior minister has expressed concern the sensible thing for the Airedale NHS Foundation Trust Board is surely to put their plans on hold and at the very least start a proper consultation with all the information in the public domain.

“But this is a wider issue than Airedale,” he added. “Authorities across Yorkshire are considering setting up private companies to run large parts of their activities. This is concerning not just because it will cost the Government in terms of VAT, at a time when the Chancellor is trying to find money in the budget for NHS pay, but also because these companies will be able to set terms and conditions for their staff.”

Airedale NHS Trust said the new company would allow its teams to work “more efficiently, run their own budgets, make their own decisions and bid for other contracts”, and formal TUPE consultations with staff and unions have begun, with the intention of the new company going live on February 28 next year.

The GMB union has called for the plan to be “binned”, claiming it is “the bean counters spotting a way to save money”.

“The Trust also clearly sees it as an opportunity to crush terms and conditions for the lowest paid employees,” GMB senior organiser Pete Davies said.

Airedale is not the first hospital trust in Yorkshire to form a subsidiary company. Barnsley Hospital NHS Trust launched Barnsley Facilities Service, on September 1, with 140 former trust employees providing “estates, facilities, procurement, security and resilience and health, safety and fire services” to the Trust.

Regional head of health at Unison, Tony Pearson, said new plans were “springing up all over the place”, with York Teaching Hospital NHS Foundation Trust being the latest to engage with the union about a proposal which could save “significant” sums,, and Rotherham is also considering cost-saving options.

“The real problem for the unions is that there will be huge chunks of the NHS workforce going out of the NHS,” he said. “They object to us using the term privatisation but they are wholly owned private companies that are allowed to set their own terms and conditions. They are not worth the paper they are written on and can be torn up at any time.”

A spokesperson for York Teaching Hospital said it is “actively exploring” an alternative model for delivering estates and facilities services.

Rotherham NHS Trust said it was exploring how services could be provided to ensure it was getting “value for money”, but nothing had yet been decided.