NHS Foundation Trusts

NHS Foundation Trusts (FTs) were initially introduced by a New Labour government in 2004, supposedly in response to the financial failure of some NHS hospitals. The Coalition Government, in its Health and Social Care Act (2012), then stipulated that all NHS Trusts in England should become FTs by 2014, having first demonstrated that they are financially and clinically viable. Given the challenges that most hospitals have been facing – not least ‘efficiency savings’ imposed by the Coalition government – the shift to FT status has been slower than anticipated and now some NHS Trusts are not expected to make the transition.

FTs are legally bound to deliver care, free at the point of use, to NHS patients on the basis of need and not the ability to pay. However, FTs are different to NHS Trusts in that they are far more autonomous, with a governing body that directly manages their budget (i.e. without government involvement).

While it has been argued that FTs are a new form of public ownership, others have seen FTs as a way of transferring the ownership and control of publicly owned assets out of the NHS – a means to privatisation ‘through the back door’. Although required by law to use its assets (such as land and buildings) for the primary purpose of providing NHS services to NHS patients, FT status allows an NHS hospital to generate almost 50% of its income from providing ‘non-NHS services’, such as Private Patient Units (PPUs). There are concerns that, rather than generating income that may benefit NHS patients, PPUs can be detrimental to NHS patients by offering full (if not better) access to NHS facilities, so raising questions about whether private patients take precedence over NHS patients when facilities are running at full capacity. (https://nhsprivate.wordpress.com).

The Francis Report that looked into the scandal at Mid Staffordshire NHS Foundation Trust stated that making hospitals behave like businesses and giving priority to financial management (as FTs are expected to do) will inevitably shift focus away from quality patient care.

FTs are authorised and regulated by Monitor. Monitor has taken action against 28 FTs (about 19%) due to concerns about governance or financial control.

FT status also has implications for staff. As in the private sector, FTs do not have to observe Agenda for Change, the national system designed to ensure fair pay and conditions for non-medical staff across the NHS.

Foundation Trusts play an important role in the privatisation of the NHS. It is thought to be unlikely that repealing the Health and Social Care Act will, by itself, allow the NHS to be exempt from EU procurement and competition law. Instead, what is needed to reverse privatisation is an end to the internal market, or to restrict competition to an internal public sector market. This would mean having to bring FTs back under the direct control of government. http://www.kingsfund.org.uk/publications/nhs-procurement-competition-rules.

Further information


Updated June 2015

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