By the middle of next year, around twelve of the best NHS trusts will find out whether they are to be awarded shadow foundation trust status. If successful, they will become fully operational by April 2004. No doubt the debate about foundation hospitals will continue over the coming months, infused with genuine concerns about the consequences for patient care, the future of our NHS and the direction of the government’s public service reform agenda. The government will propose, MPs will question, health service unions will challenge and the media will caricature this as division.
However, in the midst of heated debate, it is essential for the party not to fall into the trap of clinging to diametrically opposed views on this issue when, in fact, it is arguable that the proposals for foundation hospitals in fact reinforce traditional social democratic values rather than diluting them.
The government’s proposal will create foundation trusts that sit between the public and private sectors. They will act as a public interest company, with the goal of delivering healthcare services in hospitals and primary care trusts that are responsive, innovative and efficient. Those hospitals given foundation status will have greater autonomy from the Department of Health and be allowed to borrow finance from the private sector.
An independent regulator to ensure that debts can be serviced will check the level of borrowing allowed. The new trusts should be able to agree seven- year funding agreements to allow greater stability and increased likelihood of attracting private investment. Profits made by the trusts will be reinvested into the service.
This is not the beginning of an inexorable path to privatisation, as foundation trust assets cannot be sold off to the private sector. The new trusts will also be subject to less regulation and inspection in recognition of achieving standards of excellence and will be given power to vary pay and conditions of staff beyond nationally agreed conditions.
An underlying principle of the new foundation hospitals will be that they are owned by the local community. In addition, the management board of a foundation hospital will be held to account by a stakeholder council composed of local hospital governors elected by the local community. Hospital staff will also be members of the foundation hospital.
Finally, only those trusts which are able to demonstrate that they have managed to secure the highest standards in service delivery, management, and community and staff involvement (usually three-star trusts) will be invited to apply for shadow foundation status over the coming months.
By striving for excellence, widening the scope for innovation and democratising local healthcare services, foundation hospitals should provide local patients with first-class healthcare and direct accountability. Nonetheless, there are a number of practical questions that warrant further debate by critics and advocates alike during the coming months, if Labour is to deliver an NHS in which the ethos and structure are centred around those who matter the most: the patients.
First, whilst it is questionable whether we have ever had a truly one-tier health service, would a two-tier health service be created as patients flee poorly performing hospitals to receive service in the high-performing foundation hospital? Second, how robust will plans be to make sure that staff will not leave poorly performing hospitals in a worse position by going to work in foundation hospitals? Third, though government can never allow a core public service to fail completely, who should really be liable for debt if a foundation trust is not able to service its debts and goes insolvent? Why should it be, as seems likely, the taxpayer and not the private sector which lends the loans?
Fourth, what level of regulation needs to be in place to make sure that foundation hospitals do provide an excellent service to patients, but have enough freedom to innovate and contribute towards building a dynamic healthcare service? Finally, how do we make sure that elected stakeholder councils are truly representative of the local community?
Despite some of these important practical considerations, I do not believe it is right to argue that foundation hospitals put at risk the best values of the Labour movement. What has not been emphasised enough in the debate over foundation hospitals to date is the political importance of public service renewal and not simply reform. Renewal captures the centrality of values and sense of political purpose. Reform captures the need for change and reorganising structure. A closer link between the two needs to be drawn.
It is vital that the centre-left does not dismiss the crucial importance of choice and freedom for the majority of today’s citizens. Diversity of provision must remain central to Labour’s vision of rebuilding public services for this century if we are to secure continuing public support for the NHS and other core services. There is no real contradiction between allowing the best-performing hospitals space to innovate and achieve excellence, so long as the worst-performing hospitals are also driving up their standards and heading towards excellence.
It is a worthy goal to strive for. The public want excellent public services, not just good public services. Allowing foundation hospitals to be owned by the local community, in a framework of co-operation and mutualism, is to be embraced as well. The public realm does not equal the public sector. Not only will greater democratisation of our public services help to strengthen and develop Labour’s vision of community; but constructing institutions that disperse influence and power among the public, permitting them to play a real role in determining how public goods are delivered is a good thing in itself.
Remoulding public services in ways which deliver, and which are buttressed and infused by progressive values, has to be at the forefront of public service reform over the coming decade. The winds of political change come quickly and are often capable of toppling foundations that a political party once thought were its own. If standards are allowed to slip and aspirations remain static, it will become easier for the right to attack government’s inability to deliver public services, leaving open the possibility of public services becoming residual in the future, with stark consequences for progressive politics.