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.
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.
All subsidiary transactions (regardless of their size, legal structure or purpose) are ‘reportable’ to NHS England. All subsidiary transactions therefore 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.
We plan to update the guidance below later in 2023 to:
set a threshold for a subsidiary transaction to be reportable (rather than all subsidiaries being reportable);
set clearer parameters to determine the level of review required
align the definition of ‘green’, ‘amber’ and ‘red’ for subsidiary transactions with our statutory transactions guidance.