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Last Updated: Tuesday, 5 July, 2005, 09:46 GMT 10:46 UK
Thumbs up for foundation trusts
Hospital care
Trusts have accelerated investment in patient care
The creation of foundation trusts has not destabilised the NHS, or created a two-tier service, a report by the independent inspectorate says.

The Healthcare Commission report says trusts have made hospitals more responsive to local commmunities.

However, it highlights trust managers' concern that new polices, such as payment by results, could undermine financial stability.

The report also calls for greater clarity over public representation.

The report found four trusts were facing a projected debt of more than 3m at the end of December:
Bradford Teaching Hospitals
Devon & Exeter

Foundation trusts, created last April, have greater freedom to run their own affairs.

The Healthcare Commission was asked by then Health Secretary John Reid to review the early experiences of the first 20.

The report concludes that:

  • Foundation trusts are making progress on developing services by, for example, making decisions more quickly on the opening of new wards and operating theatres

  • There is no evidence to support fears that trusts would poach the best staff, or as a group avoid patients with complex conditions or admit patients to hospital unnecessarily

  • NHS foundation trusts are improving the involvement of their local communities

  • There is no evidence to show that NHS foundation trusts have pulled ahead and created a "two-tier NHS"

Financial concerns

The report also found that most trusts have managed their finances soundly - even though four faced projected deficits of more than 3 million.

Foundation trusts have made a good start on involving local people and developing services
Anna Walker

But trusts reported that a number of government policies introduced at the same time had put them under significant financial pressure.

There was also concern that the role of governors in some trusts was unclear, and that in some instances the functions of patient and public forums was not properly clarified.

Trusts said they wanted greater financial freedoms, the ability to raise more income from private patients, and to bid for contracts awarded to independent sector treatment centres.

They also expressed concerns about limits on borrowing.

More information needed

Anna Walker, chief executive of the Healthcare Commission, said: "Foundation trusts have made a good start on involving local people and developing services."

The report provides independent evidence that the dire warnings by critics of the foundation trust movement have proved to be unfounded
Sue Slipman

But she warned a raft of new government policies - such as a national tariff for payment by results, practice-based commissioning and patient choice - could pose problems.

"To avoid unnecessary instability, foundation trusts will need greater clarity about these policies and the impact of them."

Sue Slipman, of the Foundation Trust Network, said: "Overall, the review is positive about the impact of foundation trusts, while recognising that it is still early days.

"The review rightly concludes that foundation trusts have made progress in developing new services and improving accountability to their local populations.

"It also makes clear that they have maintained access to NHS services and the quality of patient care, while managing their finances soundly.

"The report provides independent evidence that the dire warnings by critics of the foundation trust movement have proved to be unfounded."

Health Secretary Patricia Hewitt said the report was encouraging.

"I am pleased that NHS foundation trusts have made a good start to providing better quality services to NHS patients."

Niall Dickson, of the think tank the King's Fund, said it was too early to reach any definitive conclusion about the impact of foundation hospitals.

"A major concern is that today's report further highlights the challenging new financial environment developing in the NHS.

"To keep foundation status, foundation hospitals will need to demonstrate that they are going concerns, and for some this will be difficult."

Building on the foundations
19 Jun 05 |  Health
Q&A: Foundation trusts
07 May 03 |  Health

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