NHS foundation trust
An NHS foundation trust is part of the National Health Service in England and has gained a degree of independence from the Department of Health (and, until their abolition on 31 March 2013, their local NHS strategic health authority).
Foundation trusts have a significant amount of managerial and financial freedom when compared to NHS hospital trusts. The introduction of NHS foundation trusts represented a change in the history of the National Health Service and the way in which hospital services are managed and provided.
This form of NHS trust is an important part of the United Kingdom government's programme to create a "patient-led" NHS. Their stated purpose is to devolve decision-making from a centralised NHS to local communities in an effort to be more responsive to their needs and wishes.
Foundation Trusts are considered mutual structures akin to co-operatives, where local people, patients and staff can become members and governors and hold the Trust to account. For example, Blackpool Fylde and Wyre Hospitals NHS Foundation Trust has 31 Governors, made up of Appointed, Public and Staff Governors who act as a key link between patients and the public and the Board of Directors. Some trusts are more committed to co-operative principles and have even written the Rochdale Principles into their constitution and aspire to work closely and in partnership with other mutual as well as local organisations.
By March 2013 there were 145 NHS foundation trusts (41 of them mental health trusts and five ambulance trusts). They are authorised and regulated by Monitor, the independent regulator of NHS foundation trusts. They include acute trusts, mental health, community and ambulance trusts. A full list of NHS foundation trusts can be found on Monitor's website. With the authorisation of North East Ambulance Service in November 2011, the North East became the first region with all trusts having gained foundation trust status.
The trade body for foundation trusts and trusts aspiring to FT status is the Foundation Trust Network (FTN). It has 95% of FTs as members. The chief executive of the FTN is Chris Hopson.
Equivalent Foundation Trusts (eFT)
Formerly referred to as Foundation Trust equivalent (FTe), this designation applies only to trusts providing high secure psychiatric services. There are just three: Nottinghamshire Healthcare NHS Trust, West London Mental Health NHS Trust and Mersey Care NHS Trust. Nottinghamshire Healthcare gained Foundation Trust standard on 2 November 2010. The other two trusts are in the assessment process.
These trusts abide by the same Department of Health definition for a Foundation Trust but the Secretary of State (SoS)for Health maintains a direct line of communication and accountability with them because the SoS has the responsibility to provide healthcare to patients who have been detained under the Mental Health Act, and have been judged to pose a grave and immediate danger to the public.
Unlike full Foundation Trusts, equivalent Foundation Trust organisations have a developing role: Governors have no statutory role. The Board of Directors have no statutory duty towards the governors. The governors cannot, without the Board of Directors' permission, have any control over the direction of the FT. The governors cannot appoint or remove trust auditors. The chair and directors are not appointed by their board of governors. Equivalent Foundation Trust organisations are still regulated by Monitor, and can retain surplus cash and can sell property and retain the cash from the sale.
Comparison with other hospitals
Unlike hospitals outside the NHS, Foundation Trusts have had a cap on the proportion of their income that can come from non-NHS treatments. So, the private patient income cap was, in fact, a misnomer. It did not only apply to income derived from individual patients, it covered income from all non-NHS sources. This could include joint ventures to develop medical technologies, employers paying for counselling services or income from treating UK military personnel overseas.
The Health and Social Care Act 2012 abolished the private patient income cap but FTs have to do the majority of their work for the NHS. This restriction was kept to reassure those concerned about future developments that FTs would continue to have NHS work as their central concern. Previously each FT had its own cap, set at the level of its private activity when the first FTs were established in 2003/4. About three quarters of all FTs had a cap of 1.5% or less. Until 2010 all mental health trusts were completely barred from undertaking non NHS work, but after lobbying from the Foundation Trust Network it was raised to 1.5%. These caps disappeared on 1 October 2012.
Foundation Trusts also have different reporting requirements. They produce their accounts under the Foundation Trust Financial Report Manual, which is collated and authorised by Monitor, in liaison with HM Treasury. They also have to produce annual Quality Accounts.
Foundation trusts were announced by Health Secretary Alan Milburn in 2002. The first 10 NHS hospitals to become foundation trusts were announced in 2004. By the end of 2012, the Monitor website listed 144 Foundation Trusts.
Successive governments have set target dates by which all NHS Trusts are supposed to have reached Foundation status. In 2011 the 116 Trusts then in the pipeline to make applications were required to sign a formal agreement with a deadline for the application to be made. Board members at a number of Trusts which missed the deadline were sacked. It is now officially admitted that a number of Trusts will never reach Foundation Trusts status and a new organisation the NHS Trust Development Authority was established by the Health and Social Care Act 2012 to supervise Trusts which have not reached Foundation status, of which there were 99 in April 2013, 47 of which were not expected to reach Foundation status.
The Health and Social Care Bill 2011 proposed that all NHS Trusts become NHS Foundation Trusts or part of an existing NHS Foundation Trust by April 2014.
At the outset some critics pointed out that Foundation Trusts go against the spirit of the principles laid out by Aneurin Bevan (who founded the NHS). Others feared that it would lead to a two-tier system. Others doubted whether the Foundation Trust members would succeed in having any effective influence over hospital management. A study undertaken in 2005 by the King's Fund of Homerton University Hospital NHS Foundation Trust found some governors disappointed and disillusioned.
Another report found that it was too easy to invite members to sit on sub-committees, where they quickly became bogged down in the minutiae of operational planning, whilst the main decisions were taken at meetings that they only heard about after they took place. This study was funded by the Nuffield Foundation.
In furtherance of an evidence-based NHS, it was only normal that a study of the effectiveness of decentralisation from State control would be undertaken. In July 2011 the first fully independent study was published. Now with data from a cohort of 137 FTs available for analysis, rather than the first few hospitals to achieve status, a statistically more meaningful picture can be seen. This showed that the better figures recorded by the first trusts to reach foundation status were due to factors already in place before the introduction of the FT initiative. This is also the likely reason that they were quick to gain trust status. The initial promising results were thus not repeated by all the other trusts which eventually were given permission to become a foundation trust. This appears to support the opinions of the system's critics, in whose view, the only benefit was held by the trust board-members who would now be able to award their own pay increases, balanced against the down-side of having to administer a more costly system of regulation; these two combining to increase the total drain on the NHS coffers. It remains to be seen if this way of lessening of State interference brings about any benefits which offset these greater costs of salaries and regulation.
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