22 November 2002
Just weeks after he overcame the chancellor's objection to the new bodies by compromising over their borrowing powers, he sought to mollify backbench critics only to find he had supplied them with more ammunition.
The health secretary fell foul of Left-wing backbenchers as he gave more details of the new, not-for-profit trusts following last week's Queen's Speech.
He said he wanted the first foundation trusts (drawn from ten to 12 three-star trusts) to begin operating in shadow form next April. They would be locally accountable organisations modelled on mutual societies and run by a stakeholder council. Hospital governors, who will be in a majority on the councils, will be elected by local people and staff.
A day-to-day management board will report to the councils, which will elect the board's chair and non-executive directors and approve the appointment of the chief executive.
However, this echo of the co-operative movement so beloved of Labour traditionalists failed to placate high-profile critics such as former health secretary Frank Dobson and transport select committee chair Gwyneth Dunwoody.
Dobson believes that giving only the best trusts the freedoms that go with foundation status will create a two-tier system. He said they would be able to lure the best staff by offering higher pay, while their ability to borrow, though limited by an independent regulator, would lead them to put private patients first as they sought to service their debts.
He and Dunwoody fear that the elected councils would be made up of 'self-selecting busybodies' who do not reflect the community, particularly poor and ethnic minority people.
Health service managers and doctors welcome the bold step away from Whitehall control but also share many of these concerns.
Institute of Healthcare Management chief executive Stuart Marples said: 'There is a real tension between recognising the best performers and not disadvantaging further the worst. There is an argument that more freedoms need to be lavished on the two- and one-star trusts to empower them to ratchet up the quality of care.'
British Medical Association chair Dr Ian Bogle added: 'Our prime concern must be to avoid creating a two-tier service in which patients who live near foundation hospitals, or are vocal and assertive in pressing to be referred to them, receive better services than those who are treated in other hospitals.'
Managers said question marks hang over the proposal to create stakeholder councils. For example, who will be eligible to vote and stand in the elections for hospital governors? It is not too difficult to define the constituency of a district general hospital. But how would the Department of Health ensure that all stakeholders have a vote if, for example, London's Royal Marsden took foundation status? The Marsden is a specialist cancer centre which serves the local community but also receives patients from across the country.
Milburn said he would accommodate such variations by allowing governance arrangements to differ, a move welcomed by the NHS Confederation. 'We support moves towards more local accountability but we want to look closely at the new proposals… we welcome the government's pledge not to go for a one-size-fits-all approach,' a spokeswoman said.
There are further issues. Will the elections be politicised? If so, what would happen should a party gain control of a foundation trust having pledged to ignore national NHS priorities set by the government?
This could be even more important should the government decide to offer foundation status to primary care trusts, which will control 75% of spending in England from April.
Milburn has promised that he will reveal the answers to these issues in a prospectus which he is due to publish soon. But while NHS managers will be examining the details to ensure they will work, Labour opponents of the initiative will be scanning the proposals for a bigger stick with which to beat the health secretary.
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