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Updated: Subco staff may get bonus after government U-turn

Published on: 6 Nov 2023

Staff in NHS subsidiary companies may be eligible for a centrally-funded bonus this year, government has said, just days after stating they would not.

The Department of Health and Social Care today announced that eligible healthcare staff at non-NHS organisations, including charities, local authorities and social enterprises, could apply for government funding to cover the non-consolidated payments which were agreed for most NHS staff in the spring.

On Friday — ahead of the announcement being published — the department told HSJ that foundation trusts’ subsidiary compancies (or ‘subcos’) would not be eligible, meaning that their thousands of staff would continue to be excluded. 

However, this afternoon the DHSC contacted HSJ and stated: “Some subcos may be eligible, and [trusts] should review the eligibility criteria when published.” The criteria are expected to be published by NHS England soon, the DHSC spokesperson said.

Staff who work solely on bank for trusts — rather than in addition to regular hours — remain ineligible, as they work on locally managed contracts, rather than the national Agenda for Change contract.

The spring AfC deal included a 5 per cent pay uplift for 2023-24, which has largely been paid to AfC staff in all organisations. But it also included two one-off non-consolidated payments: One of 2 per cent of 2022-23 salary; and a further one-off bonus which varied by pay band — worth between £1,655 and £3,789 for full-time staff. At the time, government refused to fund the non-consolidated payments in non-NHS organisations. Some organisations have paid it from their own funds, while others have not.

AfC covers most NHS staff, including nurses, support staff, cleaners, radiographers and physiotherapists; though doctors and very senior managers are handled separately.

Over the past decade, dozens of FTs have set up wholly-owned subsidiary companies (often known as subcos) to host a range of support services, such as cleaning, catering and portering, which were previously run by the trusts. Their staff are sometimes not eligible for the same terms and conditions as a trust’s wider workforce; and are sometimes treated differently for tax purposes.

Meanwhile, bank staff are typically employed by a separate entity and on zero-hour contracts, with the aim of enhancing flexibility. NHSE estimates there are more than 150,000 bank-only staff at any one time.

Under today’s announcement, ministers have agreed to provide additional funding for organisations that deliver NHS services and employ staff on “dynamically linked” AfC contracts, if they submit a claim.

The organisations must demonstrate they have been financially impacted by the pay deal and that their staff are employed on these types of deals, the announcement said.

The scheme will be funded from existing DHSC budgets, it said, but it has not specified how it will be found despite existing pressures.

Sara Gorton, head of health at the union Unison, said the move will ensure a “small number of providers are not out of pocket”.

She added: “Sadly this won’t stop thousands of contractors and ‘bank’ providers from ignoring calls to do the right thing by paying the lump sum to outsourced and temporary staff in the NHS. Many of these workers are on low wages and insecure contracts.

“Ministers must end the two-tier employment scandal in the NHS and ensure all employers in the service play by the same rules.”

Unite secretary Sharon Graham described the move as “barely a sticking plaster” from the government.

She said: “Instead of doing the right thing and funding a lump sum payment for everyone who works in the NHS, it has instead created a multi-tier workforce by deliberately excluding those who do not have Agenda for Change contracts at private sector organisations and NHS banks staff, even though they are working alongside NHS colleagues in the same hospitals.”

NHS Providers said that the announcement was welcome, but added: “We know for some organisations and patients today’s announcement will have come too late.

“Community providers say the failure until now to confirm central funding for nationally agreed NHS pay rises has forced some organisations to absorb the additional costs within their own already over-stretched budgets, forcing the scaling back of some services.”

Updated at 5pm on 6 November after DHSC contacted us to correct its information about subsidiary companies.