Agenda item

The Panel considered a report that outlined Frimley Health NHS Foundation Trust’s decision to transfer non-clinical staff to a wholly owned subsidiary company.

The Chair welcomed Mr Neil Dardis (Chief Executive Frimley Health) and Mr Pradip Patel (Frimley Health Foundation Trust - Chairman of the Board and Council of Governors) to the meeting and invited them to address the Panel.

(Councillor Mohammad joined the meeting)

Mr Dardis began by providing some background information regarding Frimley Health.  He said the Trust had a strong reputation to build on.  Both Wexham Park and Frimley Park Hospitals had been part of the first wave of Foundation Trusts achieving the highest star rating.  Frimley Park Hospital was also the first Trust in the county to be rated outstanding by the Care Quality Commission.  He stressed that the Trust’s workforce was its greatest asset and it was through its people the Trust would deliver its vision and values.  He explained that Frimley Health faced a challenging healthcare landscape and it was crucial to adapt and move forward to ensure it was able to provide effective and sustainable services to the residents of Slough.

It was explained that Frimley Health Foundation Trust faced a difficult future financially with an underlying deficit of £24.3 million; a cost improvement requirement of £30 million for 2019/20; and the need to invest in employees, systems and infrastructure to meet the challenges associated with changing healthcare needs.  There were significant challenges around staffing in reducing the vacancy rate and the level of staff turnover.  To meet the demands of the future the Trust was considering the development of a wholly owned subsidiary, to provide support for non-clinical services and staff.  In addition, the subsidiary was seen as a way of providing job security and parity of esteem for non-clinical staff.

Frimley Health had explored several options. The wholly owned subsidiary approach had been selected as the preferred option as there was excellent potential for cost reductions, savings, improved service quality and staff retention.  The Trust, being wholly owned, would maintain overall control.  The subsidiary was expected to provide a range of benefits: existing staff and new staff would benefit from greater opportunities and job security; a more flexible approach to recruitment and retention to address specific workforce pressures; the ability to attract a wider pool of staff with specialist skills; improved job satisfaction and morale.

The subsidiary would contribute to Frimley Health’s financial strategy and provide savings over a five-year period of circa £45 million.  Overall, operational costs of the organisation would be reduced, whilst still maintaining staff job security.  No savings would be made by cutting jobs, salaries or pensions, rather these would be derived from operational efficiencies, clinical time saved, VAT and capital savings.  The savings generated would enable important improvement projects to be undertaken.

The Chair thanked Mr Dardis and Mr Patel for the presentation and invited Members to comment and ask questions.

Members had a wide-ranging discussion, during which the following points were raised:

·  Clarification was sought regarding the anticipated savings and how these would be generated.  In response, Members were assured that there would be no job losses and both pensions and salaries would be protected.  As a subsidiary, VAT savings would be generated and there would be opportunities to make capital savings.

·  A Member asked if there were plans to increase car park charges to generate income.  In response, it was confirmed that there would be no change to the current tariffs. 

·  In relation to governance arrangements, a Member queried how issues between the Trust and the subsidiary would be resolved.  It was explained that the subsidiary sat beneath the Trust, and the Trust would have ultimate responsibility for decision-making. 

·  It was noted that the Trust proposed to transfer land, buildings and medical equipment to the subsidiary.  A Member asked if the subsidiary would be prevented from selling or disposing of these.  It was confirmed that no savings would be generated from the sale of assets.

·  A Member asked how long the transfer process would take to complete.  It was explained that the timeframe was currently unknown as the Trust was awaiting approval from the regulator to proceed. 

·  A query was raised about the amount of clinical time currently spent on non-clinical and administrative tasks.  It was explained that the subsidiary would save clinical time currently spent on non-clinical and administrative activities and allow more time to be spent on patient care.  High quality non-clinical staff would provide frontline services.

·  Concerns were raised about the staff consultation process.  In response, it was explained that the Trust was not able to formally consult with staff until the regulator had approved the transfer proposals.  Mr Dardis recognised that the proposals could have been better communicated to staff. 

·  It was noted that existing staff would retain access to an NHS pension.  A Member asked if new staff would be able to join the NHS pension scheme.  It was explained that as a subsidiary, it was not legally possible to offer new staff access to the NHS pension scheme.  However, new staff would receive an equivalent pension package and employment terms and conditions.

·  Clarification was sought regarding the alternative options for modernisation that had been considered.  It was explained that a detailed options appraisal had been undertaken and it had been concluded that a wholly owned subsidiary was the preferred option. 

·  A Member asked if the savings generated by the subsidiary would be used to recruit additional clinical staff, in particular difficult to recruit specialist staff.  It was explained that there was a national shortage of specialists in some departments, such as dermatology and neurology.  The savings generated would be used to meet the Trust’s aspirations, including the recruitment and retention of staff.

The Chair then invited Councillor Mann and Councillor Hulme to address the Panel under Rule 30. 

Councillor Mann raised concern regarding the lack of consultation with staff.  She asked if new staff would receive comparable pay and conditions to existing staff.  In addition, she highlighted that many staff felt a sense of pride and emotional attachment in working for the NHS.  In response, it was explained that the creation of the subsidiary would attract and retain staff.  New staff would receive equivalent pay and conditions. 

Councillor Hulme asked if any public consultation would be undertaken.  In response, it was confirmed there would be no direct public consultation.  It was highlighted that the aim of the subsidiary was to enhance patient care for Slough residents.  Councillor Hulme queried the business case and asked if there was concern that staff, in response to the proposals, would take industrial action.  It was explained that the Trust sought to reassure staff and ensure the best patient care was provided. 

On behalf of the Panel, the Chair thanked Mr Dardis and Mr Patel for attending the meeting.

Resolved – That the report be noted.