Staff at King’s College Hospital have raised fears that a tax-saving “privatisation” scheme will undermine their pensions and cut maternity-leave pay.
King’s College Hospital NHS Foundation Trust (KCHT) has been accused of privatising some of its services, which would save £7million in VAT liabilities per year.
Public sector union Unite has revealed to the News that KCHT has transferred procurement staff, technicians and health care assistants to a private subsidiary company ‘KCH Interventional Facilities Management’ (KCH IFM), set up in June last year.
The plan was recommended by consultancy firm Price Waterhouse Cooper, using ‘Contracted Out Services’ rules created by HMRC in 2015.
The rules allow NHS trusts to reduce VAT bills by letting them transfer staff to private companies that are owned by NHS trusts.
Affected staff now believe they will lose their link to the NHS pension scheme if they change position within the company – even if given a promotion – and would fall back on the statutory pension scheme, which makes a less generous contribution.
Of the 60 or more staff already transferred to KCH IFM, four have resigned because they “did not want be a part of a private company”, Unite has said.
KCHT said: “The terms and conditions that will apply to staff members, who apply for and are appointed to a new role through a formal recruitment process, [are] currently under discussion with staff and unions.”
Frank Wood, executive committee member for Unite, and who has worked as a biomedical scientist at King’s since 1990, said the Trust’s staff community were “very concerned by what has been done”.
“It seems to essentially be privatisation that’s motivated by finance, and not by consideration for the health service,” Frank, 52, said.
“All of these staff, including procurement staff who buy x-ray machines and intensive care units, would lose their NHS pensions if they try and change role.
“The move would also see employees’ maternity pay reduced to the statutory minimum. Some staff have said they are now questioning whether to have another child.
“And just on moral terms, a public body looking at a private company to affect its tax status beggars belief. And the Trust would have paid a lot of money to PWC to provide this advice.”
Documents shown to the News confirmed the annual £7million VAT saving, adding that another advantage of the scheme was that clinical staff who “currently spend time managing supply chain activities” could “better spend [that time by] delivering patient care and improving the quality of services”.
A spokesperson for King’s College Hospital NHS Foundation Trust said: “The Trust takes the welfare of all its staff seriously and KCH Interventional Facilities Management will also enable the Trust to continue in its commitment to providing the best care for all its patients.
“Staff who have been transferred under Transfer of Undertakings and Protection of Earnings (TUPE) to KCH Interventional Facilities Management will retain their NHS terms and conditions. The VAT positions follows precisely the same rules that HMRC applies to all NHS organisations.”
The Trust also confirmed that eight technicians who work in sterilising supplies have been moved to a company called STERIS, but did not comment on how those staff could also be affected.