Millions of NHS cash at risk of being handed to private companies

A government scheme to encourage more apprentices to train with the NHS in Essex is putting millions of pounds of public money at risk of being diverted into the private sector, the UK’s leading trade union has warned.

Freedom of information findings from Unison have revealed that more than £5million remains unused by cash-strapped health trusts across the county and due to time constraints, it could soon be taken away by the government and handed to smaller organisations.

The apprenticeship levy scheme was introduced in 2017 and requires all employers with a pay bill of more than £3million each year to pay 0.5 per cent of their payroll into the scheme. If it is not used within two years, the government is able to take the money and place it into a central pot accessible to smaller companies.

However, with the funds not being available to pay for apprentice salaries and hospitals struggling to operate on tight budgets, Unison claims many are unable to spend it because they cannot afford to pay wages.

The data shows that since 2017, Basildon and Thurrock University Hospital Trust has paid in £1.77million into the levy but withdrawn just £409,193, while Southend Hospital Trust paid £1.62million and has withdrawn just £228,750.

Meanwhile, the Mid Essex Hospital Trust paid £1.78million and withdrew £241,333 and Princess Alexandra Hospital Trust put in £1.2million, withdrew £181,213.

In total £6.3million is at risk of being lost to smaller employers in the private sector.
Unison has also highlighted that trusts that are taking on apprentices, including Mid Essex, Basildon and Southend, are only paying the statutory minimum of just £3.90 per hour. The trade union claims says this is so low that it is making it harder for hospitals to attract apprentices and utilise the funds.
Others are using the funds to retrain existing staff.

Tom Abell, chief transformation officer across Southend, Basildon and Mid Essex hospitals, said the hospitals have plans in place to spend £1.5million in apprenticeship training across the hospitals.

He added: “When it comes to entry level apprenticeship opportunities, we follow national apprenticeship salary guidelines of a £3.90 per hour rate.  This is in accordance with the principles of apprenticeships to develop the workforce, earning whilst they are learning.”

Southend councillor Matt Dent, a member of the people scrutiny committee, called the revelations “absolutely scandalous”.

He said: “This is money that could be used to employ apprentices in local health services which are struggling to recruit in the area, where we are trying to get more people into apprenticeships and into work, and yet this money out of the local health care budget is now at risk of being handed out to the private sector and in all likelihood outside of the local area. It is a national scandal and a cash grab from the NHS to the private sector on a massive scale.”

Thurrock councillor Victoria Holloway, who chairs the authority’s health overview and scrutiny committee, said: “I think the pot of money should go towards training, I have no problem requiring businesses to put money aside to help apprenticeships in important sectors like the NHS but this shows it is not working in practice.

“You never want to see money going out of the NHS, it is completely unacceptable, and the Government should be looking at this.”

Unison found that nationally the total amount paid into apprenticeship service accounts from May 2017 to April 2019 was £256.5million.

In that period just £54.4million was withdrawn and used for training purposes.

A Government spokesman said: “The apprenticeship levy means more money is available than ever before for training, giving employers of all sizes – including the NHS – the freedom to invest in the skills they need.

“We have introduced flexibilities to help employers spend their levy funds. It means employers now have 24 months to spend their levy funds and large employers are able to transfer up to 25% of their funds to other businesses.”

Steve Shaw

Local Democracy Reporter