10 October 2008
A crisis-hit Cambridgeshire hospital trust could be run by private sector managers in the first use of the government's recently relaunched and controversial 'franchising' policy.
The franchising scheme – bringing in managers from top NHS organisations or the private sector to turn around failing trusts – was first announced in the 2000 NHS Plan.
But private sector franchising has been used only once, in 2003, when the consultancy Tribal went in to zero-star Good Hope Hospital, Birmingham, pledging to make it a three-star trust in three years. Two years later, the trust – with just one star – terminated the contract and was taken over by Heart of England Foundation Trust.
Franchising was relaunched in June this year by health minister Ben Bradshaw as part of a new NHS performance management regime setting minimum standards for quality, safety and financial control.
Now it is set to be used at Hinchingbrooke Health Care Trust, which has a cumulative debt of more than £38m on an £80m budget and was named by the Audit Commission last week as one of 12 trusts that have failed to meet minimum standards for three years.
Stephen Dunn, strategy director at NHS East of England, confirmed that franchising was the strategic health authority's 'preferred option' for Hinchingbrooke.
He told Public Finance that an 'operational franchise' would avoid the pitfalls of Good Hope's management franchise, which he described as 'a glorified overpaid chief executive with little or no operational control'.
EoE would offer NHS and private sector bidders 'an opportunity to bring in a full managerial team'. Bidders from both sectors were keen, Dunn said.
He admitted it was not yet clear whether franchising would involve the SHA subsidising the service or the provider making a profit that would be shared with the NHS. The competitive process would 'drive the best deal possible' and 'find out whether they pay us or we pay them', he said.
But the SHA would not pay any premiums on NHS tariff rates for services or guarantee a level of demand, he said.
Trade union Unison condemned the move, which it said would drive 'a huge wedge of privatisation into the heart of the NHS'. Regional organiser Phil Green urged the SHA to 'think again, and drop any further talk of franchising out the operation of management'.
PFoct2008
