Carillions

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News and Comment from Roy Lilley.

Carillion still darkens the NHS landscape.  Somehow Trusts found work arounds, to keep patient-facing services going.  The true cost is yet to be revealed.

Prestige building projects... ground to a halt.  The company is in receivership, there's no easy fix.

Has a new phrase entered the lexicon of healthcare; 'doing a Carillion'.  Meaning; trying every dodge and wheeze, from barrow-boy to board-room, to keep the business afloat.

Can we compare the NHS to Carillion?

Look at Kings FT, located, embarrassingly, on the other side of Westminister Bridge, opposite The Houses of Parliament.

The HSJ are reporting; 

*  King's will need nearly nearly quarter of a billion pounds in loans in 2017-18

*  The Trust will owe DH+ £677m by March end

*  In-year deficit could exceed £100m

Anyone who has run a business, a company, a whelk-stall would take one look at that and say, 'this outfit is tumbling into uncontrollable debt'.  It's brassic-lint.

Why?  

My guess; in the past, it's had management that didn't have an eye on the ball, debts accumulated faster than predicted, it is being obliged to do more work than it is paid to do and it is too big to go broke... so they hope to keep going and trade their way out of the mess.

Comparison with Carillion?  

Over trading, hubris and shareholders (the government) who have taken money out of the healthcare budget for other stuff like keeping the DUP sweet, funding Oxfam and giving themselves a pay-rise.

Carillion-King's, King's-Carillion.  In the language of accounting, it's all the same.

If you think King's is an isolated case... no.  The whole NHS is broke.

So broke that even talented, ethical chief executives and boards are so blindsided that they think they can wriggle their way out of trouble by doing a 'Carillion'.  

There's an idea that's been quietly exploited, under the wire, undetected, for a while.  

The wheeze; 

...dump all non-clinical staff into a shell vehicle, a limited liability company and contract the staff back, benefiting from a lacuna in the VAT rules.  Existing staff TUPE'd with no choice.  New staff: different pay and conditions.  They can expect lower wages and poorer conditions, less leave, longer hours.  Uber staffing, Carillion style...

... from Trusts who declare undying love for staff, what an asset they are and how much they love them...

How long before a Trust transfers all nursing staff into a 'Carillion' dodge and rents them back. 

Effectively buying-in a filled rota, a staffed-shift and a week's workers.  Transfer the risk of recruitment, registration, references, absence, study-leave to a third party.  Package it right and it is a really tempting social enterprise, buy-out for staff or the private sector.

There are huge savings to be made.  The wages bill is 70% of your costs.  Cut 5% and its a big whack.

Is it a fiddle?  

Well... it's interfering with pay and conditions, it's messing around with people's employment, it's streeeeatching the law, it's an attempt to confound the authorities, it's a manoeuvre, it's tampering, it's a gambit, a pretence, an illusion and make believe. 

... and an astonishing number of Trusts are heading down Carillion Street.

As these new-co's have a single customer, usually the Trust, with its members on both Boards, the HMRC will have to declare it evasive.  It's an obvious device.

It is not the VAT man's job to subsidise the shortfall in NHS funding.  If the Public Accounts Committee don't put the boot-in, I'll be amazed.  

Two things will happen.  Expect one Friday afternoon, almost unnoticed, regulations will be placed before Parliament, closing the loop-hole.

Or, expect the DH to turn a blind eye and HMRC prevailed upon to keep shtum.  It's a test for The Tinkerman.  What will he do?

It's also a test for boards.  Good people, driven into a Carillion cul-de-sac.  Crafty isn't clever, manipulative isn't management, larking about with people's jobs isn't leadership. 

Staff are not commodities, they are assets.  Dodging debt doesn't deliver a balance.

In the good-old days, when the Confed had influence, a group of Chairs would have gone to the SoS and said; your funding is destroying the NHS, get this sorted or we will ask the PM to move you and on Monday, we'll close Sevices we think are unsafe.

Trust Boards need to sort out their cajones from their Carillions.

Have a good weekend.

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roy.lilley@nhsmanagers.net 

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Reproduced at TrainingPrimaryCare.com by kind permission of Roy Lilley.