The first wave of foundation hospitals received the go-ahead in England in April 2004, after government legislation was passed in 2003.
Many NHS trusts have welcomed the introduction of foundation hospitals as a means of shifting power away from central government into the hands of hospitals and the local community. There has however been widespread opposition to their introduction from within Labour party ranks, the unions, as well as the medical establishment.
We explore the arguments surrounding the issue and the ways by which you can make your voice heard.
What are foundation hospitals?
An NHS trust is the self-governing body that runs a local hospital, or in some cases a few hospitals. Only top-rated, three star NHS trusts can apply for foundation status. This status allows hospitals within the trust to opt out of Whitehall control and become independent, not-for-profit organisations.
They are set up as public interest companies, organisations that deliver public services and that are neither state run nor shareholder led. They are authorised and monitored by the Independent Regulator of NHS Foundation Trusts.
Foundation hospitals are owned and run by an elected board of governors. The governors are drawn from patients and members of the local community as well as from “key stakeholders”, such as NHS staff and representatives from local businesses, local authorities and primary care trusts.
Although foundation hospitals are still part of the NHS and government-funded, they have the ability to establish their own financial and operational priorities. This means they can:
- Borrow money from the private sector
- Recruit and employ their own staff
- Sell off any land or assets they own and keep the profits for reinvestment
They are, however, still subject to a number of safeguards such as, NHS standards, performance ratings and systems of inspection.
For more information on the role of foundation hospitals in our NHS system in England, see the iCan guide on How the healthcare system works in England.
Where is the process at?
Out of the first wave of NHS trusts to receive foundation status, 12 became fully operational in April 2004. The government has expressed the intention for all hospitals in England to receive foundation status within the next four to five years.
The latest NHS performance ratings stripped four of the 20 trusts that became foundation hospitals of the three-star status they needed to become foundation hospitals in the first place. However, they will retain their independence while they work towards a recovery with the foundation hospital regulator. Another 11 hospitals which were also in line to get foundation status failed to receive three stars and so will not be considered for promotion.
Find out more about NHS star ratings from BBC News Online.
What are the arguments?
For foundation hospitals: The government and supporters of the new system argue that foundation hospitals are fundamental to the future of the NHS because they are:
- De-centralised and provide greater local accountability: They are designed to give greater financial and operational control to hospitals, patients and local communities
- Responsive to local needs: Patients and the local community will be involved in the input of how their local hospital is run, putting an end to what Tony Blair describes as a “one size fits all” NHS system
- Better staffed: They are able to offer financial incentives to staff, which is designed to address the problem hospital trusts currently face in recruiting key posts in expensive or deprived areas
- Better financed: They can retain the profits from any assets or land that they sell and access money from both public and/or private sector sources giving them greater financial freedom than NHS hospitals have currently
- Free to innovate: They can tailor their services to meet the needs of their locality and provide greater diversity and choice of healthcare
- Raising hospital standards: By allowing hospitals to control their own finances and raise private money, the standards of service will rise and this will have a positive knock-on affect on other hospitals
Against foundation hospitals: Opponents claim that the introduction of foundation hospitals will produce a two-tier system. They claim the growth of foundation hospitals will result in:
- Undermining the NHS: Critics argue that awarding top-rated hospitals foundation status and the associated financial benefits will threaten the cohesion of the NHS. They say, rather than raising standards, this will strengthen the divide between successful and failing hospitals
- Battles for staff: They argue that the salary incentives foundation hospitals can offer will enable them to poach the best staff from the NHS and will lead to in-fighting amongst hospitals
- Marketisation of the NHS: A dominant concern is that foundation hospitals will produce a health service dependent upon the financial market. Opponents fear that the quality of service would become reliant upon how much a local hospital can afford
- “Backdoor privatisation” of the NHS: Critics argue that the clause in legislation that permits private companies and charities to acquire foundation status could effectively result in “backdoor privatisation” of the NHS
- Hospital debt: There are concerns that foundation hospitals borrowing from the private sector to fund projects will be unable to repay the debt (Although Tony Blair has promised to allocate NHS funds for any major work that is carried out)
- Greater bureaucracy: With the elections of governors and member there are fears of increased administration and bureaucracy
What can I do now?
Although the Health and Social Care (Community Health and Standards) Act has been passed and the first group of foundation hospitals are soon to become operational, there are still many ways that you can get involved in the debate. You can:
Talk to interested organisations
- Unison, the public service union, is strongly opposed to foundation hospitals on the grounds that they undermine the fundamental principles at the heart of the NHS. They have produced campaigning materials for branches opposed to foundation hospitals
- The British Medical Association is anxious about foundation hospitals creating a two-tier system and about their impact upon hospital staffing. Read their response
- The Royal College of Nursing has expressed concern that foundation trusts have “the potential to widen health inequalities and geographical disparities in the provision of health services”. You can read the college’s response
- Democratic Health Network is a think tank opposed to foundation trusts on the grounds that it considers them to be a “wholly inadequate” method of injecting local accountability into the NHS. It has produced a pamphlet ‘People Power and Health: A Green paper on Democratising the NHS’ proposing a series of alternatives
- The NHS Confederation, an umbrella group for NHS organisations, welcomes foundation hospitals for their injection of local accountability into the NHS
- The Institute for Public Policy Research, a centre-left think tank, welcomes the potential benefits of public involvement offered by foundation hospitals but warns of the need for thorough research into wages, borrowing and implementation
- King’s Fund an independent health charity, is supportive of foundation but advises that “robust evaluation is key”
Get involved in your local foundation hospital
There is a full list of the NHS trusts applying for foundation status on the Department of Health’s website.
If you live in an area covered by one of these hospitals and want to get involved, there are a number of ways by which you can do so. You can join their membership community, which consists of staff, patients, carers and the public. If you become a member you can also stand for election to the board of governors, which is actively responsible for influencing hospital policy.
Research the issue further
If you want to get to grips with the issue more before taking action, there are numerous reports and resources available. Here are just a few useful websites to look at:
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