A hospital trust in the north west has dropped plans to transfer hundreds of non-clinical staff into a subsidiary company, after a financial deal was struck with the local authority.
Wrightington, Wigan and Leigh FT has cancelled its plan to transfer more than 900 workers, including porters, cleaners and catering staff, into a wholly owned subsidiary, WWL Solutions.
Staff have taken strike action over the plans, but Wigan MBC has now offered the trust a one off payment of around £2m to cancel the plan.
Keith Cunliffe (Lab), the council’s deputy leader, told HSJ this matches the amount that the trust expected the subsidiary to save in 2018-19.
He said: “The trust was saying that if it didn’t get these savings by setting up the subsidiary then it couldn’t meet its financial control total with NHS Improvement, and then it would lose £8m of provider sustainability funding.
“There’s been a lot of opposition to it and we wanted them to pull back, but they said they would need a financial offer to do that because of the money they would lose.
“I don’t think we’re going to ask for the money back, because we’re working towards an integrated care organisation with the NHS. We will expect to benefit in terms of the transformation of services and it should give us an extra bit of leverage with them. We didn’t want the subsidiary company, but also didn’t want Wigan to lose the £8m of national PSF money.
“We also said the subsidiary needs to be permanently off the table and they’ve agreed to that.”
Dozens of NHS trusts have already established, or are seeking to establish subsidiary companies, which can deliver savings through a VAT loophole and by recruiting new staff on non-NHS contracts.
Robert Armstrong, the FT’s chair, said: “I am delighted that Wigan Council has been able to find a funding option that means we can withdraw our plan to create a wholly owned subsidiary.”
The Unison union said it has called off further strike action.
Last month, the chief executive of Wigan MBC Donna Hall took over the accountable officer role at Wigan Clinical Commissioning Group on a joint basis.