13 December 2002
The proposals will give them control of more than 75% of NHS spending in England.
Unison reacted immediately by claiming that NHS foundation trusts would create a two-tier system that will alarm patients and sink staff morale in trusts without foundation status.
Milburn insisted that three-star trusts that become foundation trusts would remain part of the NHS and there would be a legal block on their privatisation.
The number of private patients they treat would be capped at current levels, he added, and preference would be given to trusts that convert their private patient facilities into NHS-only wards.
Foundation trusts would not be allowed to destabilise neighbouring health service hospitals by undercutting their prices, he said. 'They will have a statutory duty of partnership and to use their freedoms in a way that does not undermine other NHS organisations, by picking off their staff, for example.' But he confirmed: 'Provided they take on extra work and improve their productivity and performance, they will be able to offer staff extra rewards.'
This was seized upon by Unison's head of health, Karen Jennings. 'Creating elite foundation hospitals runs the risk of creating poor relations in the surrounding trusts. The morale of hard-working staff in hospitals that don't achieve this status will be badly undermined,' she said.
'Many nurses will be tempted to move to foundation hospitals and exacerbate recruitment and retention problems in the surrounding areas. Patients who are not treated in foundation hospitals will believe that they are getting a second-rate service.'
The NHS Confederation said the proposals were 'thoughtful'. It welcomed new freedoms for two-star trusts, such as keeping the proceeds of land sales, and the extra support that will be offered to no-star trusts.
Announcing the PCT allocations, Milburn said no trust would receive less than an extra 28% in cash terms under the new funding formula, which shifts cash to the poorest areas, such as Bradford and Tower Hamlets.
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