11.07.14
A fifth of FTs still to comply with off-payroll rules – Monitor
Approximately one-fifth of NHS foundation trust hospitals do not yet comply fully with Treasury rules that limit the use of off-payroll arrangements.
Following a Treasury review of the tax arrangements of senior public sector staff in May 2012, it introduced restrictions on the use of off-payroll deals – where employees rather than being paid off the public sector payroll, are paid through a contract with their own personal service company.
Under the recommendations it was stated that board members and senior officials with significant financial responsibility should be on the organisation’s payroll in no more than six months, and any contractor with engagements of more than six months in duration, should include contractual provisions that allow the department to seek assurance regarding the income tax and NICS obligations.
In 2013, the Health and Social Care Information Centre carried out an initial investigation of how these recommendations were being implemented in the NHS. And, at the time, it found that all 51 foundation trusts were failing in one or more of the Treasury’s recommendations.
In Monitor’s new report it highlighted that 21 foundation trusts have now successfully resolved all issues. From the remaining 30, though, 20 foundation trusts have one or more senior employee paid through an off-payroll arrangement, and they are waiting for responses after asking those employees for assurance about their tax arrangement.
A further 23 foundation trusts, including some of the 20 above, still have at least one board member or senior member of staff with significant financial responsibility employed through an off-payroll arrangement.
Of these 23 trusts, nine are facing wider issues relating to their performance which they have explained is affecting their ability to recruit and retain permanent skilled staff which resulted in the need to use interim off-payroll contracts. The other 14 have plans to end off-payroll arrangements by the end of the year.
However, if foundation trusts with existing issues show no general improvement at the time of publishing their annual accounts, Monitor will consider what further action might be taken to make sure foundation trusts prioritise the implementation of the Treasury recommendations.
Jason Dorsett, financial reporting and risk director of Monitor, said: “It’s important that both patients and taxpayers feel confident that NHS foundation trusts are well led and are following best practice in managing their finances.
“The Treasury has made it clear that it expects all trusts to follow its advice on off-payroll arrangements. We welcome the fact that all trusts are taking action to end their off-payroll arrangements over the coming months.
“We will be looking at their accounts to make sure people paid with public money follow the rules set out by the Treasury, and if we don’t see enough progress we will consider whether further action is necessary.”
Miriam Deakin, head of policy, Foundation Trust Network, told NHE: “It is positive that the report from Monitor finds that all trusts are taking action to comply with the Treasury’s recommendations on off-payroll employment. However, it’s key that foundation trusts retain their autonomy and flexibility to make decisions about their workforce that best deliver safe and accountable care.
“It is important that the public have confidence not only that foundation trusts are running their health service efficiently, effectively and economically but also are complying with income tax and national insurance arrangements.
“Our members are operating in the most challenging financial time in recent NHS history. They remain committed to managing their finances appropriately while ensuring they have a fully skilled workforce that is deployed in the most efficient way to meet the needs of local patients.”
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