By Ben Kerrigan-
Alarmed MPs have heavily criticised a Bradford hospital trust after incorrect figures were given in a meeting about its creation of a wholly owned subsidiary company.
Bradford South MP Judith Cummins(pictured above) and Keighley MP John Grogan have criticised bosses from the Bradford Teaching Hospitals NHS Foundation Trust for understating important revenues by £13m during a meeting . Last week, the two Mps were already critical of claims presented to them that the hospital’s purported revenue of £15m was made possible because of a £10m VAT evasion.
Mps were flabbagasted when they met with met new Chair Dr Max Mclean, last week over the plans to move hospital staff in the Trust’s estates, facilities and clinical engineering departments to the new company. Concerns the transfer will strip workers, including porters, domestic and security staff, of the protections they have as NHS employees and a seven day strike action looms.
AD: Capeesh Restaurant
In excess of 200 staff working for the Bradford Teaching Hospitals NHS Foundation Trust voted to take industrial action from the 8th of July, in a bid to defend their pay and conditions. Unison balloted its 313 affected members after the Trust unveiled plans to set up a wholly owned subsidiary company.
Hospital staff in the Trust’s estates, facilities and clinical engineering departments are now poised to be transferred to a new company, which will affect hundreds of people.
Alarmed: Keighley MP, John Crogan
AD: Oysterian Sea Food Restaurant And Bar
VAT EVASION
When Mps were informed by the new Chair that of the £15 million extra revenue the Trust hopes to raise in the first five years of the new company’s existence, over £10 million was as a result of avoiding VAT. On this basis the two MPs tabled the following motion in the House of Commons.
“That this house notes the proposals from the Bradford Teaching Hospitals NHS Foundation Trust to set up a subsidiary company; expresses alarm that the business plan estimates that of the £15 million expected extra income to the Trust in the first five years of the operation of the company over £10 million is related to savings on VAT with a consequential loss to the Exchequer; believes that any projections of extra income from new business beyond that period must be regarded as highly speculative; notes guidance from the Department of Health and Social Care which states that trusts would not look to create a wholly owned subsidiary for the primary purpose of avoiding tax or use this as a key driver for exploring the use of this organisational form; calls on Bradford Teaching Hospitals NHS Foundation Trust to pause their proposals forthwith.”
MPs were later shocked when John Holden, the Trust’s Acting Chief Executive Officer, who was also at the meeting, wrote to them with completely revised figures admitting and understating of the revenue figures during their meeting. His letter stated:
“In our discussion yesterday, we under-stated the financial benefit to patients and services from entering into the Wholly Owned Subsidiary. We said it was only £15m.
“In fact it is £15m plus a further £13m of VAT efficiencies, i.e. a total of £28m.On behalf of the Trust I apologise for the under-statement of financial benefits.”
Mr Grogan said: “Even on the revised figures vat avoidance is clearly ‘a key driver ‘ for the Trust in setting up a new company with nearly half the anticipated extra revenue until 2025 coming from this source.
“This is clearly against Government advice and will mean a big hit in lost tax for the Government. This is a classic case of robbing Peter to pay Paul.”
While Mrs Cummins MP added: “It is astonishing that the Trust have so little grasp of the figures, In a few hours they effectively remembered an extra £13 million hidden away behind the sofa.
“It is time for health and treasury ministers to step in and stop this nonsense.”
In response, a spokesperson for the Trust said: “The Trust has acted in good faith throughout and understating the financial benefit to patients and services from creating the subsidiary company was a genuine error.
“We corrected this with the MPs as soon as possible afterwards, so they had the correct figures which show the total planned gains over Bradford Healthcare Facilities Management Ltd’s first five years of operation.
“These significant expected benefits mean we will be able to ensure the sustainability of the company, strengthen services and provide investment into improve patient care.”
AD: Heritage And Restaurant Lounge Bar