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Last Updated: Sunday, 16 October 2005, 23:08 GMT 00:08 UK
Living up to expectations?
By Nick Triggle
BBC health reporter

Surgery (generic)
Foundation trusts accumulated 37m of debt last year
A report was published last week praising the progress of foundation hospitals. But are they all what they are cracked up to be?

NHS bosses in Stockport had been looking to expand its cardiology and surgical services for years.

But for a long time their efforts came to nothing as they competed with other NHS trusts for funding.

The situation changed in April 2004 when Stockport NHS Trust was in the first wave of hospitals to be granted foundation status.

The elite standing gave bosses the ability to side-step the normal funding routes and borrow money - and the expansion project was off and running.

The 25m unit, comprising operating facilities and short-stay beds, will open at the Stepping Hill hospital next year.

Dr James Catania, the trust's medical director, said: "It will make such a difference and it is happening so much quicker than I ever thought possible."

Open market

But Stockport's move into the open market has not made it immune to the financial crisis gripping the NHS - one in four trusts failed to balance its books last year.

The trust has announced it is facing a 5m deficit this year and is now considering cutting jobs.

While the achievements of foundation trusts were highlighted in a report last week by the Foundation Trust Network, which represents England's 32 such trusts, Stockport's situation illustrates the problems facing the elite hospitals.

Foundation trust regulator Monitor is expected to lay a report before parliament next month showing that the 25 foundation trusts in operation last year ran up a 37m deficit.

Foundation trusts are top-performing NHS hospitals which have been given freedom from government control and have the ability to raise their own funds
There are currently 32 in total, which have treated 7m patients since April 2004
Their combined annual budget exceeds 6bn

Unlike the rest of the NHS, foundation trusts are not required to break even each year, but the level of deficit is still causing concern because of its effects.

The most infamous case has been the foundation trust in Bradford, which had its chairman removed by Monitor in December after running up debts.

And other hospitals have closed wards and are considering job cuts to keep the debts at bay.

New staff contracts, the prices of drugs and a reform in the way the NHS is funded have been blamed.

Dr John Lister, of the union-funded pressure group Health Emergency, said: "This shows the so-called elite trusts are being affected by the situation and it is harming patients.


"I expect it will get worse, you will see more foundation trusts in deficit and services being hit."

But aside from the financial difficulties, just how successful has the foundation trust scheme been in the last 18 months?

When the foundation trust bill was making its way through parliament, it proved so controversial that the government faced a backbench rebellion and pushed it through only after frantic lobbying.

Critics argued it would create a two-tier health service with the elite trusts poaching staff and patients from other NHS hospitals.

Hospital care
There are 32 foundation trusts in total

A recent report by the Healthcare Commission said these fears had not been realised.

But that does not mean doubts do not remain about the actual performance of the elite hospitals.

The examples put forward by the Foundation Trust Network have attracted criticism because the new schemes, which have been largely limited to new units and non-clinical improvements such as extra car parking facilities, were said to be not innovative enough.

Dr Richard Lewis, a senior research fellow at the King's Fund think-tank, said: "It is probably fair to say that you could take 32 NHS trusts and find a list of achievements that match these.

"While many of the fears have not been realised, it is not clear that foundation trusts are offering services that are different than before, although it is still early days."

Paul Miller, chairman of the British Medical Association's consultants committee, agreed.


"It is not just foundation trusts that do innovative projects, the rest of the NHS does too.

"Nor are we convinced the two-tier system will not materialise. To date foundation trusts have not exercised all their powers.

"For example, we have not seen hospitals poaching staff from other sites with higher pay. But it could happen, and if it does it will damage the health service."

It is really very early days, some of the trusts have not even been running for a year
Professor Chris Ham, of the University of Birmingham

Disillusionment with the system has reached such a level that one health service manager told the BBC that some trusts were even being put off applying even though the government wants all hospitals to submit applications by 2008.

Stephen Humphreys, of the foundation trust regulator Monitor, admitted some hospital bosses may be sceptical about whether the benefits are worth the arduous application process.

But he said moves were being made to rectify this by making the application process "more simple to avoid duplication".

Despite the criticisms, the Foundation Trust Network maintains trusts are making a difference.

Network chairman Andrew Cash said: "Foundation trusts are still new. They are organisations in transformation, working in a new environment with new freedoms, but they are already demonstrating more innovative thinking and new ways of working.

"They are bringing projects on stream in a timescale never before possible."

Others feel it is too early to judge foundation hospitals unfavourably.

Chris Ham, professor of health policy at the University of Birmingham, said: "It is really very early days, some of the trusts have not even been running for a year.

"In time I think the deficits issue will be resolved and we also need to give them more time to innovate."

The jury, it seems, is still out.

Plea over elite hospitals drive
11 Oct 05 |  Health
Thumbs up for foundation trusts
05 Jul 05 |  Health
Building on the foundations
19 Jun 05 |  Health
Q&A: Foundation trusts
07 May 03 |  Health

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