Foundation trusts

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Freedoms diluted The freedoms have been diluted. For example, the borrowing of capital is subject to a “prudential limit” set by the Treasury, and foundation trusts will now have to stick to pay rates for staff set out in a recently accepted policy, Agenda for Change.2 The freedoms were curbed for political as much as pragmatic reasons-to reduce opposition to the policy by rebellious backbenchers and to build confidence that more trusts could achieve foundation status quickly, without too much instability in the NHS. The policy is important, less for what it will achieve in practice in the NHS (in the short term) than for what it symbolises politically. The row in the Commons was effectively a row over two differing political philosophies: one allowing freedom (for individuals or institutions) provided that a decent “floor” or minimum standard remains and improves; the other intervening to promote equity, in which the overall distribution of resources is controlled-the “ceiling” as well as the “floor.” This row is effectively at the centre of debates on reform across the public sector. On his interview on BBC's Newsnight during the last election, Tony Blair made clear his position with regard to income distribution: he said he was not going “to go after” the rich but to ensure that those on the lowest incomes had a better deal-for example, through the use of a minimum wage. There is a parallel with foundation trusts-only those that score highest on performance (using the Department of Health's star rating system) are eligible for freedoms, while extra help is available to more poorly performing NHS trusts to improve.3 In the end, duty to the prime minister's cause prevailed; only 65 members of parliament rebelled, and the bill passed with a comfortable majority. So what happens next? Of 45 acute trusts eligible to apply for foundation status, 32 expressed an interest and 29 have been accepted to develop their plans further. The final choice will be made this autumn, and the first wave of foundations will operate from April 2004. The criteria for deciding which trusts can move forward are not clear. An overriding political consideration must be to allow as many trusts as possible foundation status, partly to counter the two tier argument used by opponents of the policy-that allowing an elite tier of hospitals more freedoms would lead to greater inequity in ditribution of resources and an unacceptable gulf in performance in a health service founded on the principle of equal access for equal need. In the short term, expect to see many more NHS trusts achieve foundation status, with limited new freedoms. But as local experience and political confidence grow the freedoms are likely to be expanded as individual foundations trusts petition the independent regulator for autonomy in a host of new areas. As recent debates and the useful report from the House of Commons Health Select Committee4 have highlighted, many questions remain about the policy on foundation trusts. In particular, how will the regulator operate in practice; how will the benefits and drawbacks of foundation status be identified; how will non-foundation trusts be able to learn from the experience to improve their performance; and will the new mechanisms for involving the public in the governance of foundations be worth the costs? Is foundation status more appropriate for other NHS organisations-for example, primary care trusts-than acute trusts or for elective over chronic care?5

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