APPENDIX 14
Memorandum by the Socialist Health Association
(FT30)
INTRODUCTION
A national health service that is democratically
accountable at all levels is a priority for the SHA, and the foundation
trust concept appears superficially attractive through its association
with co-operation, mutualism and local democracy. The SHA therefore
welcomes the Government's recognition of the need to increase
democratic accountability within the National Health Service,
but believes that foundation trusts as outlined in the guidance
is a not the way to achieve this.
The SHA understands the Government's desire
to get out of direct, day-to-day involvement in running every
part of the NHS. However, the SHA believes that it is ill advised
to introduce independence from central control at the level of
the most successful acute/specialist NHS hospitals. The Secretary
of State has it within his power to distance Whitehall from day
to day involvement by changing behaviours and shifting the balance
to the Strategic Health Authorities that were created to be the
local headquarters of the NHS. The SHA believes this should be
the preferred route to decentralisation, in particular because
this would be more compatible with the forthcoming devolution
of government to Regional Assemblies.
The SHA has also always held the view that prevention
and improving public health is the way to better health and health
care—the pursuit of community initiatives that stress a
reduction in inequalities, encourage healthier lifestyles, and
tackle social and economic exclusion. An emphasis on preventive
work, partnerships particularly with local government and around
community safety, and more resources for primary care and preventive
initiatives should be the Government's priorities, not giving
pre-eminence within the NHS to the acute and tertiary sector.
A BETTER WAY
FORWARD
If the political interest is in democratic accountability,
then a hospital is the wrong unit to empower. This is a return
to the pre 1948 system of voluntary hospitals, when the thrust
should be to empower primary care.
If the local population is to have a truly democratic
voice in the NHS, it follows that this should be in its Primary
Care Trust, which has an interest in local services and relates
to a defined geographical area. A PCT with a democratically elected
Board of Governors can be held to account for its planning, providing
and commissioning decisions by a local electorate. Elections to
the Board of Governors of the PCT would be a straightforward matter,
conducted at the same time as local government elections and based
on the same constituency of electors.
Foundation trusts as proposed cannot be held
truly to account by any bodies other than the Independent Regulator
and the Commission for Health Improvement and Audit. NHS Strategic
Health Authorities are hardly mentioned in the The Guide to
NHS Foundation Trusts, although they would be a more accessible
and obvious source of performance accountability for local people
than a distant Regulator bound by a tight and limited remit.
The SHA contends that there is a distinction
between local citizens achieving influence through democratic
civic elections to local government, and patients and users gaining
influence through Patients" Forums and other voluntary sector
mechanisms. Staff also need to influence governance, but this
should be through systems of worker participation and trade union
involvement. The governing body structure of foundation trusts
confuses all these different interest groups.
The SHA is also concerned at the proposal to
introduce the foundation trust concept first at the most complex
trusts, such as major teaching hospitals and tertiary centres
with very wide catchment areas. Where is the thinking about the
implications for medical student and other clinical training?
At the moment, hospital care is not delivered
with equal excellence throughout the land. This is reflected in
the performance measures and star system allocated to NHS trusts.
However, citizens pay for a National Health Service and have the
right to receive consistently high standards of care no matter
where they live. Any reform to the hospital sector of the NHS
should, therefore, be directed to ensuring that all hospitals
offer the same consistently excellent standards of care.
This could be achieved by offering greater local
flexibilities to all hospitals, particularly in determining local
clinical priorities, reinforced with extra support for struggling
hospitals and with the resources, money and capacity going where
they will achieve maximum improvements. The Government's target
for hospital care should be to tackle the current multi-tier delivery
of acute health care until there is a single-tier of uniformly
excellent health care matching the national standards to which
the Government is committed. The potential foundation trust hospitals
could be given greater freedom and yet be kept within the NHS
by a system that granted successful hospitals more autonomy.
Some Specific Comments on the Guide
to NHS Foundation Trusts
GOVERNANCE
The SHA believes that the proposal for "democratic
stakeholders" will be unworkable in the context of a big
hospital because of the lack of a genuine catchment area. Neither
is the analogy with co-operative societies a good one. Co-operative
societies tend to be bottom-up organisations. The foundation trust
will be a top-down organisation.
The requirement to register for membership will
not draw in people from hard to reach groups, while the more politically
aware "establishment" groups will be over-represented.
The proposed time frame for establishing the first foundation
trusts will also make it extremely difficult for them to attract
a truly representative local membership.
Furthermore, the interests of the local population,
often very deprived in the case of many teaching hospitals, may
well conflict with those of patients attending specialist units
who come from further away. Where local people dominate stakeholder
boards, they could quite rationally decide to close down expensive
regional services and divert resources to meet local needs. Conversely,
if specialist patients came to dominate the Board, the local purpose
of the hospital could suffer. In other instances, small single-issue
groups could capture control of the Board of Governors.
The SHA is also concerned at the proposal to
allow hospital trusts to identify the boundaries of their own
membership community, which could be drawn quite arbitrarily and
possibly even partially. No other democratically accountable organisation
determines its own constituency. This proposal could seriously
undermine the Government's undertaking that the trusts will be
community owned and locally accountable.
The sheer bureaucracy of the whole membership
and electoral process appears very complex and costly, and will
divert significant resources away from health care. The examples
given in the Guide for ensuring a properly representative Board
of Governors are also extremely cumbersome and probably unworkable.
The SHA also has concerns about the ownership
of the foundation trust. The stress in the Guide is that foundation
trusts will remain firmly within the NHS. However, time will tell
whether this status could be sustained in the face of a strong
legal challenge, given the mutual model of ownership. The SHA
fears that it may become possible for a Board of Governors to
vote to de-mutualise its hospital by selling it on to another
mutual or to a PLC.
A different concern is that if it can be demonstrated
that foundation ownership status is not robustly public, then
the trusts could fall within the terms of the General Agreement
of Trade in Services (GATS) agreement.
Public services are exempt from the GATS provisions.
Private services are not. If foundation hospitals become freestanding
entities, they might be perceived as competing with private hospitals,
but not on the same level playing field. If that situation arose,
then the Government could be obliged to remove subsidies and NHS
benefits from the foundation trusts.
THE FINANCIAL
REGIME
Increased freedom to borrow is cited as another
benefit of foundation trust status. However, this will mean that
borrowing is driven by hospital status rather than clinical need.
Furthermore, the SHA suspects that the foundation trust pot of
capital is likely to be greater than that available to other hospitals,
undermining the access of more needy hospitals to capital. If
access to NHS capital is a problem, foundation trusts are not
the solution.
Foundation trusts with surplus estate in areas
with high property values will also have an opportunity for windfalls
denied to the rest of the NHS. However, profits from asset sales
should be shared across the NHS and applied where they are most
needed, not retained within one locality. Similarly, the ability
of foundations to invest their own surpluses independently will
result in small scale, piecemeal returns and deny the NHS the
ability to maximise returns on aggregated investments.
EMPLOYMENT, EDUCATION
AND TRAINING
The SHA fears that, having got rid of the debilitating
effects of the internal market, the Government now proposes to
re-introduce competition through the foundation trust concept.
Setting up foundation trusts in the phased manner that is proposed
will ensure that struggling NHS trusts never get the chance to
succeed. This is a diversion from the Ness primary purpose, as
a national system, to deliver The NHS Plan.
The introduction of the first wave of foundation
hospitals in a situation of prolonged staff shortage is likely
to boost recruitment at a small number of institutions at the
expense of the rest of the NHS, making it even more difficult
for other hospitals to succeed. Staff poaching is inevitable.
Any attempt to prevent this will fall foul of employment law.
The duty on foundation hospitals to exercise
their freedoms in a way that does not undermine or damage the
rest of the NHS is an impossible and meaningless goal. Competitive
local pay will also transfer resources from health care into collective
bargaining processes. It will become a recipe for divisiveness,
competition and the institutionalisation of a multi-tiered acute
health care service.
The Government's priority at this time should
be to increase capacity across the board, not to facilitate unfair
competition for scarce staff resources.
ADDITIONAL ACCOUNTABILITY
REQUIREMENT UNDER
THE
HEALTH & SOCIAL
CARE ACT
2001
The Guide says that foundation trusts do not
need to set up Patients' Forums as they will be held to account
through the commissioning process. However, it is up to the Commission
for Patient and Public Involvement in Health to establish Patients'
Forums, not the trusts. The suggestion that foundation trusts
do not need Patients' Forums also seriously undermines the new
system of patient and public involvement in health even before
it is fully up and running.
In the event that Patients' Forums are not set
up at foundation trusts, it is unclear who, other than the Regulator
and CHAI (infrequently), will monitor the day to day services
delivered by the trust, unless that role is given to the Forums
of all the commissioning PCTs.
It will not be possible for the PCTs themselves
to hold the foundation trust to account through the commissioning
process. PCTs will be required to sign long term, binding contracts
with foundation trusts as the trusts will depend on these contracts
to allow them to borrow on the open market. It is therefore unrealistic
to suppose that PCTs can enter into expensive legal wrangles with
the trust whenever they feel that contractual obligations are
not being met.
Neither would the PCTs be able to hold the trust
to account by taking those contracts elsewhere. Local people want
to be treated in their local hospital. PCTs are anyway constrained
in their purchasing power, and small PCTs commissioning services
from a major teaching hospital are not equal members in that partnership.
There is also concern that where a decision
by a foundation trust to vary its regulated services is contested
by an Overview & Scrutiny Committee, reference is only to
the Independent Regulator and not, as is the case of all other
trusts, to the Independent Reconfiguration Panel (unless referral
is made by the Regulator).
The SHA also notes the likely reduction in the
role of the Strategic Health Authority, and fears the loss of
an informed and coherent overview of a local health economy.
BREACH OF
LICENCE—PROVISION
FOR THE
INDEPENDENT REGULATOR
TO INTERVENE
In the event of foundation trusts being established,
the SHA believes that an Overview & Scrutiny Committee should
also have the power to trigger an intervention by the Independent
Regulator, particularly where they provide services on behalf
of a local authority.
CONCLUSION
The SHA is committed to the NHS. It is also
committed to extending democratic accountability to the whole
of the NHS. The SHA feels this will be better achieved by seeking
greater involvement by local government in the governance of PCTs,
which have a local population responsibility. The strength of
the NHS is that it is a national, value-driven not-for-profit-service,
and this strength should be retained at all costs.
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