Questions and answers about our subsidiary development 2017/18
Setting up a subsidiary at Airedale NHS Foundation Trust
Following consideration of an in-depth feasibility study and comprehensive discussions with staff, trade unions and other stakeholders, the Airedale NHS Foundation Trust Board of Directors decided at its meeting on 25 October to set up a wholly-owned subsidiary to manage its estates, facilities and procurement functions. The subsidiary is called AGH Solutions Ltd and opened for business on 1 March 2018.
Q. What does a ‘wholly-owned subsidiary’ mean?
A. It is a company that is owned by Airedale NHS Foundation Trust, but run as a separate, arm’s length company. It does not have any shareholders apart from Airedale NHS Foundation Trust, and any profits it makes go back into the Trust to be invested in frontline clinical services.
Q. Will the board of AGH Solutions be accountable to the ANHSFT Board?
A. Yes. The new company is an arm’s length organisation from ANHSFT but the Trust Board still oversees the new company, and ensures that it is operating within our values and ethics. There are detailed service level agreements as part of the contractual agreement between the Trust and AGH Solutions, and performance against these is strictly monitored.
Q. Why not just leave the services where they were?
A. Rising demand for NHS services costs us more and more money every year to manage, and means that we have to look at how best to organise our services to be as efficient as possible. By moving some of our services into a separate company it means that the services in the subsidiary are able to work together more efficiently, run their own budgets, make their own decisions and bid for contracts that they could not bid for if they were still part of the NHS. This means that they can grow the business and help to support our frontline services.
Q. How will this benefit local people?
A. By setting up this subsidiary which has more scope to grow its income it helps us to continue to provide high quality clinical services to our communities. It also means we are better able to support the local economy: the new subsidiary is better placed to work with small and medium sized businesses locally who usually are not able to work with the NHS due to their size. By growing the business it will also mean we can provide additional employment, training and development for local people.
Q. What happens to staff who work in those services?
A. Existing staff have been transferred across to the new subsidiary. Their existing employment and pension rights under current NHS Agenda for Change terms and conditions is protected under a piece of employment law called Transfer of Undertakings (Protection of Employment), otherwise known as TUPE.
Q. How long will their NHS Agenda for Change terms and conditions be protected under TUPE?
A. TUPE is a complicated piece of employment law and there is no set length of time for protection. However, the Board has agreed that the term of the contract with the subsidiary is likely to be 25 years and that terms and conditions should be protected for the period of that contract.
The Trust has also agreed:
- To protect membership of the NHS Pension Scheme for transferring employees
- To protect existing Agenda for Change terms and conditions on promotion for the full term of the contract
- To offer permanent contracts to any bank workers who have been working regular patterns of work in the same or similar roles for over a year.
The Board of AGH Solutions Ltd has agreed:
- To honour the annual NHS pay awards for the staff who transfer
- To recognise the relevant trade unions
Are employees of the new company still counted as NHS employees?
A. No, they are employees of AGH Solutions Ltd.
Q. Will there be any redundancies?
A. There are no job losses planned.
Q: Have the terms and conditions for new staff who join the subsidiary been decided upon?
A: Yes, they have been agreed by the directors of AGH Solutions Ltd.
Q. Where is the new company be based?
A. AGH Solutions will remain in the offices it currently occupies on site at the hospital.
Q: Is this decision a signal that the Trust is abandoning its commitment to a publicly-funded NHS?
A: Absolutely not. We are confident that the new arrangements mean we can remain sustainable for the future and keep providing healthcare free at the point of delivery.
Q. Is this privatisation?
A. We don’t believe it is, as the subsidiary is owned by Airedale NHS Foundation Trust, which remains an NHS organisation.
Q: What happened to the public petition?
A: The public petition was presented to the Board on 25 October and was considered along with trade union and staff feedback.