The NHS continues to face financial pressure. Many trusts in England sought savings by creating wholly owned subsidiary companies to deliver services. This is now changing.
What are wholly owned subsidiaries?
A wholly owned subsidiary company (or ‘subco’) is an organisation set up at arm’s length but still owned by the trust. It means that services once provided in-house would be provided by a separate company, employing staff who previously worked for the NHS.
Subcos were initially proposed as a means of trusts exploiting a tax loophole, but the real savings were coming from employing new staff on non-NHS terms and conditions, with no access to the NHS Pension Scheme.
UNISON has been calling this out as a form of backdoor privatisation, with direct consequences for healthcare staff.
UNISON wins major policy change
In September of 2025, NHS England sent an update to trust leaders highlighting subco concerns raised by unions, particularly UNISON, and stated that guidance will be changed so that new subsidiaries involving the transfer of NHS staff “will now only be approved in a limited number of circumstances, and only where there is clear union support”.
There will be a consultation on the detail, but in the interim, proposals involving the transfer of NHS staff currently under review must be paused with immediate effect while the consultation takes place, except those supported by local unions.
UNISON welcomed this move as a positive step while making clear that the union will keep campaigning for further change. It stressed that “any trusts considering outsourcing need to think again and work with their staff on better ways to save money or reorganise services.”
Branches with live subco proposals – or where they are actively being considered – should seek firm guarantees from management that they will abide by this policy change, and not try to pursue other forms of outsourcing.
UNISON has and will continue to successfully fight off threats to outsource staff to subsidiary companies, even if this means taking industrial action.