Top trusts given trading freedoms

27 Sep 01
The best NHS trusts will be allowed to set up trading arms to sell services to organisations in the public and private sectors, Health Secretary Alan Milburn announced this week.

28 September 2001

The ability to set up these 'spin-off' companies is one of ten new freedoms to be given to the top-performing trusts as part of a radical overhaul in the relationship between the Department of Health and trusts.

Although trusts are nominally independent, they are closely controlled by the department. But now the health secretary is determined to reward those that perform best in areas that matter to patients – waiting lists and cleanliness, for example – with greater freedoms.

In turn, he hopes these will foster an entrepreneurial culture in NHS management.

Milburn abandoned the 'traffic lights' approach to grading trusts' performance for a 'star' system as he published the first assessment of English hospitals. It was feared that the red rating would reduce public and staff confidence.

'This is not primarily about money. It is about management and organisation. These assessments provide the basis for action to improve patient services in England's hospitals,' he said.

Though 35 trusts received the top three-star rating, 12 received none at all. These included the University Hospitals Coventry and Warwickshire Trust, which was damned in a Commission for Health Improvement (Chi) report last week.

The new trading arms could exploit scientific discoveries, for example, but all profits must be ploughed back into patient care.

Top performers will also receive fewer inspections from Chi, have five times their existing delegated authority threshold for the Private Finance Initiative and public capital schemes, and will be able to retain £5m, rather than £1m, from the sale of land.

The best management teams will also be able to bid to run failing trusts.

The latter – which have gained no stars – will have a short period to demonstrate improvements. Trusts where the chief executive has been in post for more than 18 months will have three months to improve, while those in the job for fewer than 18 months will be given a year to produce better results.


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