Forming or changing a subsidiary

Document first published:
Page updated:
Publication type:

This guidance should be used by all NHS trusts and foundation trusts considering transactions involving the creation of subsidiaries or material changes to existing subsidiaries. This guidance replaces the guidance published in 2018. Where trusts have started but not yet completed a transaction process under previous guidance, we will discuss the applicability of this updated guidance on a case-by-case basis.

The guidance strikes a balance between assuring us and respecting NHS freedoms and the ability of the NHS to innovate. With the NHS facing a period of significant change, trusts are increasingly looking at innovative ways of managing their financial and operational delivery and many are considering subsidiaries to do this.

This guidance clarifies the required approval process before trusts can implement plans for subsidiaries; it does not affect their legal ability to develop such plans.

This updated guidance:

  • sets a threshold for a subsidiary transaction to be reportable (rather than all subsidiaries being reportable);
  • sets clearer parameters to determine the level of review required
  • aligns the definition of ‘green’, ‘amber’ and ‘red’ for subsidiary transactions with our statutory transactions guidance.

All reportable subsidiary transactions require a trust-approved business case to be submitted detailing the nature of the proposal and its inherent risks.

Each business case will be reviewed by an NHS England panel to determine whether a transaction is deemed material or significant. This determines if further review is required, the level of which will be based on the proposal’s inherent risks.

Trusts are encouraged to engage with their NHS England regional team as early as possible to discuss potential subsidiary transactions. This gives our regional teams the opportunity to advise trusts on their specific proposals and draw on specialist support from central teams as appropriate.

Please contact for more information.


Accessible content. Published 29 February 2024.


Accessible content. Published 29 February 2024.