In a significant shift in national policy, NHS England has announced new restrictions on the creation of subsidiaries that involve transferring NHS staff into separate organisations. This move comes in response to growing concerns from unions and staff about the impact of such models on the NHS workforce.
Over the past year, unions - particularly Unison - have voiced strong opposition to subsidiary arrangements that relocate NHS employees, warning that these practices risk undermining the principle of a single NHS workforce.
Acknowledging these concerns, the Health Secretary has directed NHS England to change national guidance on subsidiaries. As outlined in a letter from Glen Burley, Financial Reset and Accountability Director, new national guidance will soon confirm that subsidiaries involving staff transfers will only be approved under limited conditions. Crucially, these conditions include clear support from local unions and guaranteed protection of NHS terms and conditions, including pension access.
“This is about shaping the future of the NHS workforce,” Burley wrote, “ensuring fairness, and giving staff and their representatives confidence that their voice matters in decisions of this kind.” The policy aims to provide clarity and consistency for NHS trusts as they navigate financial and operational pressures, while also reinforcing the importance of staff engagement and union collaboration.
Next steps
A formal consultation on the proposed changes will begin shortly. NHS England is seeking input from trusts, staff, and unions to finalise the details. Burely says it is about ensuring they strike a balance between safeguarding staff and preserving the autonomy of foundation trusts to innovate in ways that strengthen, rather than fragment, the NHS.
In the interim, any proposals currently under review that involve transferring NHS staff will be paused immediately - unless they have support from local unions.
Comment
This development certainly tempers the rhetoric from earlier in the year where NHS England championed the use of subsidiaries as a potential means for reducing costs and addressing overspends. This aside, the policy change has the potential for derailing the plans of many NHS providers who have considered and/or are pursuing subsidiaries as a legitimate option. We await the guidance with interest.
If you would like to discuss the implications of the new policy direction, please contact Rob Day.
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