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THE NHS faces a “Pandora’s box of Carillion-type meltdowns” if health trusts continue to set up and move staff to private companies to avoid paying tax, the Unite union warned today.
Unite has written to Health Secretary Jeremy Hunt calling for an immediate ban on further private limited companies being established by NHS trusts in England.
The union is concerned that NHS trusts are forming wholly owned subsidiary companies so that they can register for VAT exemption and compete on a level playing field with commercial competitors.
This means that NHS staff are moved onto precarious contracts, putting them at greater risk of losing their jobs.
Unite national officer for health Colenzo Jarrett-Thorpe warned: “We believe this could be creating a Pandora’s Box of dozens of Carillion-type meltdowns among NHS trusts in England.
“This would have a detrimental effect on key health services and the employees that provide these services.”
Unite warned that the creation of these private limited companies has had a significant impact upon service delivery and can be considered unsafe for patient care.
The letter said: “The increasing tendency of NHS trusts to create wholly-owned subsidiaries in the form of private limited companies could lead to a flood of dozens of Carillion-type situations across England, if serious action is not taken by the government immediately.”
The union highlighted a case at Yeovil Hospital where hundreds of non-medical staff are being transferred to a private company next month.
Helen Eccles from union Unison expressed concern to the BBC in December about the move, saying it breaks up the NHS team and puts some staff outside of nationally agreed terms and conditions.
Prime Minister Theresa May’s Cabinet held a crisis meeting today as the government plunged into further chaos over the collapse of arch-blacklister and public service privateer Carillion.
Carillion went into compulsory liquidation yesterday after the company’s value plummeted on the stock exchange from £2 billion to £60 million.
Hundreds of sub-contracting firms used by Carillion are under threat.
General union GMB warned that although the government has promised to pay the wages of Carillion workers employed in the public sector, it seemed to be abandoning 8,500 Carillion workers involved in private sector projects.
SNP MP Chris Stephens said organisations who contracted Carillion — including the NHS — should be made responsible for paying the wages of the company’s employees, and is pushing a Bill in Westminster to put such responsibility into law.
Labour and unions called for public service contracts which won Carillion billions of pounds in taxpayers’ cash to be taken under public control.
Labour leader Jeremy Corbyn said Carillion’s collapse should be the “turning point” marking the end of the exploitation of public service provision by profit-hungry privateers.
Unions demanded protection for Carillion’s 20,000-strong British workforce, and for 27,000 pensioners who were employed by the outsourcing firm.
As reported in the Morning Star, the government handed £2bn in public service contracts to Carillion last year — despite three warnings of plunging profits from the company.
Carillion’s contracts include providing school dinners, cleaning and catering at NHS hospitals, construction work on rail projects such as HS2, and maintaining 50,000 army base homes for the Ministry of Defence.
TUC general secretary Frances O’Grady called for assurances that there are “no more Carillions on the horizon.”
She said: “That means an immediate risk assessment of all large outsourcing firms with government contracts."
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