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Last Updated: Thursday, 20 November, 2003, 10:34 GMT
Q&A: Foundation hospital row
Tony Blair's flagship health policy is on a knife-edge amid a furious game of parliamentary ping-pong over the proposals for foundation hospitals.

Why are the plans in the balance?

In a nutshell, they were agreed in the House of Commons on Thursday, but rejected in the House of Lords.

They must be approved in both houses in order to become law.

What happens next?

We're in the midst of what's known as parliamentary ping pong - the period at the end of the parliamentary year when contentious legislation bounces between the Commons and the Lords.

Peers rejected foundation hospitals earlier this month.

On Wednesday the legislation returned to the Commons, and scraped through by a majority of just 17.

The plans went back to the Lords on the same day - and were rejected

Hours later they were back in the Commons - and approved with a majority of 41.

So on Thursday, they'll be back in the Lords and will go back to the Commons later on.

What if the stalemate continues?

If the Lords continue to bat the plans back to the Commons and the two houses remain at odds, the bill will fall at the end of the parliamentary year, which had been due to be Thursday, but which could be extended to Tuesday.

So the policy would fall altogether?

Yes. The government would be able to reintroduce the legislation in the Queen's Speech on 26 November.

But ministers would be forced to start all over again, introducing the plans afresh rather than being able to carry over the current position.

So what are foundation hospitals?

The proposals would see hospitals opting out of government control and becoming independent not-for-profit organisations.

They would be able to borrow money on the private markets and set their own financial and clinical priorities.

They would remain part of the NHS and be monitored by stakeholder councils, whose members would be drawn from local communities.

Who is objecting to the proposals?

The majority of 17 for the government on Wednesday was the smallest ever experienced by Tony Blair's government.

It indicates that as well as Tory and Liberal Democrat opposition, there is significant opposition to the plans from the Labour benches as well.

Earlier this year more than 130 Labour MPs signed a Commons motion opposing the policy.

Some of the opponents of the plans are regular critics of the government - but worryingly for Tony Blair, many are former ministers and MPs usually loyal to the prime minister.

The plans are also opposed by unions and rank and file Labour members who rejected the plans at a setpiece debate and vote at the Labour Party conference.

What are their concerns over the policy?

The MPs and others opposed to the plans say foundation hospitals would create "a two tier NHS system".

They argue that all NHS services should be brought up to the best possible standards.

It is for many an issue of principle. Equality should be the building block upon which improvements in the NHS are built, they say.

Essentially, they fear foundation hospitals would be able to offer staff higher wages and therefore attract the best workers.

As a result, they say, a divide would be created between foundation hospitals and other hospitals.

What are the arguments in favour of foundation hospitals?

Supporters believe that allowing some hospitals to raise private finance on the open markets will create centres of excellence and drag other hospitals up with them.

They say the idea would set hospitals free to respond to local need.

Mr Blair told the Labour Party conference in 2002 that he wanted an end to the "one size fits all" mass production public service.

So far more than 30 hospitals have applied to be given the freedom to raise money to boost their budgets, set pay levels and appoint the staff they want.

Health Secretary John Reid says he wants all hospitals to have foundation status within four years, and insists the changes will improve the service to patients, who will get the power to choose where they get treated.

Why is the opposition to the plans serious for the government?

Any debate about the NHS is always hugely sensitive for Labour, and Tony Blair has made reform of the public services the cornerstone of his second term in power.

Labour leaders will be concerned that many of those objecting to the plans are not the "usual suspects" who have criticised earlier policy plans.

The Iraq rebellion earlier this year, and continuing doubts about the post-war situation, concern about student top up fees and opposition to foundation hospitals all add up to questions in the party about the direction of New Labour.

Is the Cabinet united on the plans?

There have been tensions between the Treasury and the health department.

Gordon Brown is concerned about foundation hospitals borrowing on the private markets for major projects and then facing large debts.

In essence, he is worried about the Treasury being called upon to bail foundation hospitals out.

Under a deal brokered by Tony Blair between the chancellor and ex-Health Secretary Alan Milburn, it was agreed that funding for major projects would have to be included in the NHS budget.

In other words, if foundation hospitals run into trouble, they would not be able to turn to the Treasury for extra cash.

If all sides stick to that agreement, Mr Brown's support can probably be relied upon. But there is little doubt that he is not the policy's most enthusiastic advocate.


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