Foundation trusts must be free

17 Oct 02
Top NHS hospitals will be put off applying for foundation trust status if the proposed new regulator is not truly independent, NHS Confederation policy director Nigel Edwards warned this week.

18 October 2002

Last week, the prime minister brokered a compromise agreement between Chancellor Gordon Brown and Health Secretary Alan Milburn that will create the new, not-for-profit NHS organisations. They will be freed from many of Whitehall's controls, be able to vary staff pay and borrow capital from public or private sources.

The elite hospitals will be subject to a special regulator, which will award operating licences and set borrowing limits based on trusts' ability to repay loans. These duties may be handed to the new independent health regulator – the Commission for Healthcare Audit and Inspection.

However, Public Finance understands that leading figures at the Commission for Health Improvement – the main predecessor body for CHAI – are not keen on taking on more responsibilities.

Edwards said potential foundation trusts will look closely at the licensing body's independence. 'The new regulator is going to have to be independent or it won't work,' he said.

'We can't have a situation like the one with Michael Howard and Derek Lewis over the prison service a few years ago. While this secretary of state says he is not going to interfere, subsequent ones may do so.'

Edwards said the confederation 'broadly' supported the initiative but had a few remaining concerns, relating to commissioning bodies and their ability to vary pay.

The Department of Health is confident it will have around 12 trusts in the first wave, expected in April 2004. It has pencilled in October 29 and 30 for a seminar.

It will be heartened that initial reaction to the deal has been positive. Addenbrooke's in Cambridge, for example, which was one of the first three-star trusts to express an interest, said: 'We will be broadly considering the subject at a trust board meeting later this month.'

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