DoH admits shift in foundation policy

13 Dec 07
All NHS acute and mental health services in England will be provided by foundation trusts within three years, the Healthcare Financial Management Association conference heard last week.

14 December 2007

All NHS acute and mental health services in England will be provided by foundation trusts within three years, the Healthcare Financial Management Association conference heard last week.

NHS chief executive David Nicholson told delegates on December 6 that Department of Health policy had shifted subtly. Where once the department had wanted to give all secondary care trusts the opportunity to apply for foundation status, it now accepted that some would never reach the necessary standard.

'We will be looking at foundation trusts to take them over through merger and acquisition and the like,' he told the conference in London. 'It is my expectation that over the next three years all acute and mental health activity will be driven through foundation trusts. There will not be a rump of organisations that are not foundations.'

The department is seeking long-term solutions for the 17 most financially challenged trusts, with merger and acquisition as one way out of their historic difficulties. One trust with such problems – Good Hope Hospital – was taken over by the Heart of England foundation trust in April.

Nicholson added that while the DoH would pilot a small number of community foundation trusts, he was not convinced that creating 'another 152 monopolies' was the right way to go.

David Flory, director general of NHS finance, performance and operations, praised finance staff for the service's 'fantastic turnaround' – from a £500m deficit in 2005/06 to a forecast £1.8bn surplus in the current financial year.

But he added: 'If there is a problem with this, it's less that we are going to have a cumulative underspend of just over 2% at the end of the year if the forecast holds true. The problem is more that it has come as a surprise.'

He insisted that NHS financial forecasting and the delivery of those forecasts must improve.

Both men said there would be discussions at a local and national level about how to use the surplus. Nicholson insisted the money must not be 'frittered away' and should produce real productivity gains.

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