NHS organisations are increasingly turning to wholly owned subsidiaries and alternative organisational models as tools to drive value, improve service delivery, and respond more flexibly to the evolving healthcare environment. These models offer the potential for greater efficiency and innovation, while maintaining public ownership and alignment with NHS values.

For Finance Committees (and other committees to the Board), understanding these structures is critical. Effective governance, regulatory compliance, and oversight are essential to ensure that subsidiaries support the delivery of high-quality care without exposing the parent organisation to undue risk.

At this event, legal and operational experts shared insights into the opportunities and challenges presented by wholly owned subsidiaries.

Legal and Procurement Considerations

Michael Clifford and Vincent King, Partners at Weightmans provided a detailed overview of the legal frameworks and procurement rules that underpin NHS subsidiary models. Their session covered key elements of the NHS Act 2006, procurement exemptions including the vertical exemption and activity test, and the legal boundaries around joint control arrangements. They also discussed some of the challenges facing NHS bodies—such as potential trade union opposition and the need for regulatory approvals—particularly when setting up new entities.

Michael outlined the historical development of NHS subsidiaries, the financial drivers behind them, and the differing rules that apply to NHS trusts versus foundation trusts. Vincent explored the practical application of procurement regulations and how trusts can make use of exemptions to collaborate more effectively and maintain compliance.

Regional Collaboration and Efficiency at Scale

Nina Russell, Programme Director, Efficiency at Scale C&M Cheshire & Merseyside Provider Collaborative, presented insights from the Cheshire and Merseyside Efficiency at Scale Programme. She highlighted the region’s collaborative efforts to reduce unwarranted variation and deliver operational efficiencies, supported by robust governance through provider collaboratives and ICB leadership. Nina also shared regional experiences and learning, reinforcing the importance of national NHS England guidance, leadership commitment, workforce considerations, and a clear articulation of the benefits—beyond just VAT savings. Her session underscored the complexity of establishing separate legal entities and stressed the importance of phased, well-managed implementation.

Subsidiary Strategy in Practice

James Thomson, CFO of Clatterbridge Cancer Centre NHS Foundation Trust, offered strategic updates on two of its wholly owned subsidiaries. PharmaC plays a critical role in delivering outpatient dispensing, procurement, logistics, and homecare services across the Liverpool health system. PropCare manages estates and facilities, including medical equipment, across all Clatterbridge sites. It operates under a concession-based model, focusing on contract management and compliance. James outlined the governance, performance, and future strategy of both organisations, demonstrating how these subsidiaries support service innovation and long-term value for the Trust.

The Christie Commercial Group Model

Sally Parkinson, CFO at The Christie presented The Christie NHS Foundation Trust’s evolving commercial group structure. The Trust operates through a blend of wholly owned subsidiaries, joint ventures, and an independent charity. Each plays a distinct role in supporting the Trust’s mission, from flexible service delivery and risk-sharing partnerships to charitable fundraising for research and infrastructure. Sally explained how this mixed model enables Christie to balance strategic agility with public accountability.

This event provided valuable guidance for NHS leaders seeking to navigate the legal, operational, and strategic dimensions of wholly owned subsidiaries and alternative organisational models. As these approaches become more common across the NHS, understanding their implications and effective implementation will be critical for success.