Hospital's 'wholly owned subsidiary' set to go live this month

The Board of Directors at Chesterfield Royal Hospital NHS Foundation Trust aims to complete the implementation of its wholly-owned subsidiary company by the end of March 2019

The hospital says it brings to an end a period of uncertainty for 700 staff, safeguarding a range of valuable and essential services, and protecting jobs from the risk of third party outsourcing, reduced staffing numbers and even potential redundancies as a way of cutting back on overall costs.

In July 2018, the Board considered a business plan and agreed that an independent subsidiary company, 100% owned by the Trust, was the best way forward to future-proof its finance, IT, procurement, clinical engineering and facilities & estates services.

The process was put back later that year (September) when health service regulator NHS Improvement (NHSI) requested a ‘pause’ from all organisations planning to do the same.

The request to defer was designed to enable NHSI to develop a new national policy and best practice guidance for any organisation proposing to set-up a subsidiary within the confines of the NHS. The Royal’s business case was submitted for review against this new guidance in mid-December 2018.

NHS Improvement has now formally responded to the Trust’s plans and – baring some points of clarification – is content for the Trust to seek final and formal approval for its case at a meeting of the regulator’s Resources Committee later this month. This timetable means the Trust could be in a position to go-live with the company at the end of March.

A personal letter from the Royal’s Director of Finance & Contracting, Lee Outhwaite has been sent to each member of staff affected by the final phase of implementation to explain the current position and ‘next-steps’.

It marks the end of around 10-months of staff engagement and consultation, where everyone was given the opportunity to help to shape the business plan and its proposals.

The letter confirms each of them will transfer over to Derbyshire Support & Facilities Services (DSFS) on Monday, April 1 2019 in line with TUPE regulations – ensuring their terms and conditions of employment, including pay, NHS pension, annual leave and sick pay remain unchanged.

The Board’s decision to create a subsidiary included an agreement to protect staff for the length of the contact DSFS will hold with Chesterfield Royal Hospital NHS Foundation Trust – 25 years in the first instance. Going forward, under legal articles of association, DSFS cannot be sold or transferred to third parties – ensuring the only place it can return back to is the Trust.

Commenting on the final phase of this implementation, Mr Outhwaite says: “Last July the Board’s directors described the decision to set up a wholly-owned subsidiary as ‘one of the most difficult decisions we’ve had to make in our 15 years as an NHS Foundation Trust’.

"Creating an independent company was a really tough strategic move, necessitated by the current NHS climate, although adapting how the Trust works will preserve key services.

“The subsidiary will be able to operate in a dynamic and beneficial way, running healthcare facilities and support services on a more commercial footing - to best practice quality standards, in a cost effective way; and giving the public value for the money they put into the NHS.

"Whilst essentially independent, DSFS will remain firmly within the Chesterfield Royal Hospital ‘family’, with the same ethos, values and principles. Overall the subsidiary will remain committed to providing our patients and colleagues with first-class support services.”

Alongside writing to staff, the Trust is continuing to host face-to-face briefings over the next few weeks to take people through the next and final stage of this process.

Mr Outhwaite praised the way people had taken the time to engage with the plans and for contributing their views and ideas, which, he says: “Helped to improve the business case to make it a viable way-forward for the Trust.” He added: “After a period of some uncertainty all of us now look forward to making DSFS a real success that we can all be proud of.”

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