Exclusive: the trusts offering thousands of staff inferior pensions

Trusts are regularly denying staff employed by their wholly owned subsidiary companies access to the NHS pension and providing them with schemes which are significantly less generous. 

An HSJ investigation has also revealed some trusts are paying sub co staff less than the lowest Agenda for Change rate. They are also offering reduced uplift payments for unsocial hours at evenings and weekends, as well as lower maternity and sick pay rates than those enjoyed by directly employed NHS staff.

Sub cos are organisations which typically have a separate board but are wholly owned by foundation trusts and are often used to provide services such as cleaning, catering and portering to the NHS. Trusts often cite greater flexibility in staff terms and conditions as a reason for forming one, although they also offer some VAT benefits. 

Responses to freedom of information requests have shown thousands of sub co staff have been enrolled into schemes which are likely to give them much lower pensions and to which employers contribute as little as 3 per cent of their salary.

The NHS pension has an employer contribution of 20.68 per cent of salary and offers an index-linked pension related to average career earnings. Many alternative schemes are dependent on investment returns and deduct charges for managing the scheme from the contributions.

Of 18 trusts approached which have subsidiaries, only two – York Teaching Hospital FT and Northumbria Healthcare FT – offered new starters AfC terms and conditions and allowed them to join the NHS pension. Many others only put staff on AfC terms if they moved to the company from the trust under the Transfer of Undertakings (Protection of Employment) legislation.

In 2019, mionisters said explicitly that new sub co staff were eligible to access the NHS pension scheme. Despite this, the Department of Health and Social Care told HSJ only nine sub cos have applied for and been granted access for new starters, although it declined to name which ones. 

In the last decade, many trusts set up sub cos covering roles in facilities and estates. These were fiercely resisted by unions who were concerned about lower pay and conditions but NHS Providers said it was wrong to say they were “being pursued…. to reduce terms and conditions for NHS staff.”

NHS Providers interim chief executive Saffron Cordery said: “Trusts have set up wholly owned subsidiaries for a variety of reasons and use them to deliver a range of services and functions. It is appropriate that they are free to run their businesses so that they can achieve what the government and NHS England require of them.

“We have been working with trusts to understand the experience of outsourced staff and those working for subsidiaries to help inform their approaches. There has been some movement in recent years to bring outsourced staff back ‘in house’.

“Trusts are very mindful of the effect of the economic climate and increased cost of living on staff. It must be remembered too that trusts are operating in a very tough financial environment with budgets tightly squeezed, under huge pressure to maximise efficiency and value for taxpayers’ money.”

Trust responses

County Durham and Darlington FT said its subsidiary “is outside the NHS and can, therefore, determine its own terms and conditions of employment”.

Simon Wadley, finance and commercial director of Gloucester Hospital FT’s Gloucestershire Managed Services, said the £9.50 per hour rate was only paid to a small number of staff who had been transferred from a third organisation and only worked at weekends, when enhanced rates meant their pay was £14.25 an hour. These staff had chosen to remain on this pay scale, he added. “The sub co has introduced terms and conditions for new employees in line with facilities management industry standards,” he said.

South Warwickshire FT – where a number of staff who recently transferred from a different employer had been paid £9.50 an hour – said this rate had now been increased to be in line with other employees in its sub co. It added sub co staff were eligible for a discretionary bonus, which was 2 per cent of salary last year, as well as a range of other financial and non-financial benefits.

A BSMHFT spokesperson said: “Our wholly owned subsidiary offers employees a comprehensive benefits package that gives employees flexibility, and salary is often more important to them… This package enables our subsidiary to compete more effectively in the increasingly difficult and challenging employment market.”

East Kent Hospitals chief people officer Andrea Ashman said: “Wholly owned subsidiaries like 2gether provide an opportunity for trusts to access, develop and retain specialist expertise.”

A spokesperson for NTW Solutions – the sub co of Cumbria, Northumberland, Tyne and Wear FT –  said it paid the real living wage. “We have recently made some positive changes to our terms and conditions and are confident that we have a good balance between use of NHS resources and providing opportunities for staff,” they added.

A Calderdale and Huddersfield Solutions spokesperson said: “The terms and conditions offered to new CHS colleagues are benchmarked against comparable employers in our communities and are responsive to the market in which CHS operates. CHS has committed to continually reviewing and benchmarking its terms and conditions to be an employer of choice in our region.”

A Royal Free London Property Services spokesperson said the organisation was committed to ensuring staff benefit from pay and terms and conditions equivalent to those on AfC rates.

“We continually review pay and benefits for RFLPS staff to ensure we offer competitive salaries and can support recruitment and retention for these vital roles,” they added.

Birmingham Women’s and Children’s FT said, at the time its subsidiary was created, its new staff could not join the NHS pension scheme and the position was being monitored. It added, although its unsocial hours uplift was below AfC, because its pay rates were higher, this meant staff working unsocial hours were taking home pay higher than they would be had they been on AfC pay and uplift. 

Yeovil District Hospital FT chief executive Peter Lewis said, as the trust prepared to merge with Somerset FT (which Mr Lewis also leads), the terms and conditions of staff at the Yeovil Cub Co – Simply Serve Limited – were being looked at as they differed from colleagues on AfC. “That results in colleagues in some teams working alongside one another on very different pay, terms and conditions. This is a concern and we are reviewing it to see what we can do,” he said.

HSJ also sent FOIs to the following trusts, as the publication believes they have a relevant sub co. However, no response was received, despite reminders: Airedale FT; Barnsley Hospital FT; Epsom and St Helier University Hospitals FT; Harrogate and District FT; and Guys’ and St Thomas’. FT

Update: This story was updated at 9:25am on 19 January to add in Birmingham Women’s and Children’s FT explanation of its unsocial hours uplift.