Fears have been raised that the plan by Leeds Teaching Hospitals NHS Trust would lead to a “two-tier workforce” with some staff employed on worse terms and conditions than others.
The trust has confirmed it is considering the move to outsource estates and facilities, supply chain and procurement and medical engineering services.
Health trusts around the country, including Airedale NHS Foundation Trust and Harrogate and District NHS Foundation Trust, have pressed ahead with similar plans.
The Leeds trust said it intends to keep existing staff who transfer to the company on their current terms and conditions.
But East Leeds MP Richard Burgon said new staff joining the firm, including porters, cleaners, housekeepers and engineers, could get a worse deal.
He said: “It would make it harder to recruit and retain staff, which will inevitably have a negative impact on standards of care for the people of Leeds.
“I believe these plans should be scrapped and I am calling on the trust to consult widely with their staff and with the public so the danger of the proposed subsidiary company are widely know.”
Mr Burgon said a loophole which allows subsidiary companies to reclaim VAT monies was one of the reasons NHS trusts were setting up private firms.
Unison and other health unions have threatened industrial action at trusts involved in the outsourcing.
Mr Burgon said: “We could see industrial action across the whole of Yorkshire if trusts plough ahead with their plans.
Leeds Teaching Hospitals, which runs Leeds General Infirmary and St James’s University Hospital, insisted that no decision had yet been taken over the formation of the company.
Simon Neville, the trust’s Director of Strategy and Planning, said: “Like many other trusts across the NHS, we are currently exploring the possibility of forming a company, which would be owned and accountable to the NHS Trust, to deliver some of our important support services such as estates and facilities, supply chain and procurement and medical engineering.
“No decisions have been taken and before we do so, we would engage fully with our staff and recognised trade union representatives. As a NHS Trust we would also require approval from the Department of Health.
“If the company was to be set up, it would be our intention that any transferring staff retain their existing terms and conditions, including pay and NHS pension for the life of the contract, which we would expect to be around 25 years.”
Mr Neville said the company would generate income which could be invested back into NHS services. He added: “Establishing a separate company to run these valuable support services would enable the specialist teams to focus on their expertise, attract a wider range of staff and provide services for other organisations.”