HEALTH services in Colchester and Tendring will be provided by a profit-making firm from January.

NHS North East Essex’s board approved its “provider arm” to become a community interest company. It will be paying the new body to run all services, such as GP surgeries, community nursing and physiotherapy.

If it does the job for less money than it has been paid, the company will be allowed to keep the cash and invest it in improvements.

Under the current system, bosses are obliged to spend the whole of their annual budget rather than setting aside money for future projects.

It is hoped the switch will encourage efficiency as there will be a financial incentive to make savings.

Lynne Woodcock, managing director of North East Essex Provider Services, which will be known as Anglian Community Enterprise Community Interest Company from January, said: “We wanted to become a social enterprise organisation to help us improve how we support the health and well-being of local people.

“As a social enterprise, we will work more closely with staff, service users and the community to provide services.”

The Royal College of Nursing branded the scheme irresponsible.

It claimed jobs might be put at risk, staff may not benefit from nationally-negotiated terms and conditions, such as sick pay rights or holiday entitlement, and new staff would not be able to access the NHS pension scheme.

Karen Webb, eastern regional director, said: “Staff have shown they oppose the proposals to become a social enterprise and the trust has, in the Royal College of Nursing’s opinion, failed to make a case that it will bring improvements to the quality of care.”