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From The Socialist newspaper, 5 January 2006

Foundation Hospitals:

'Reforms' destroying the National Health Service

FOUNDATION HOSPITALS are one of many NHS 'reforms' backed by New Labour. When they were set up, NHS unions and health campaigners called foundation hospitals divisive and a 'dagger at the heart of the NHS'.
Health trades unionist ANDY FORD says that now they look more like a cancer, destroying the NHS from the inside.

THE NEWS that a Foundation Trust, Moorfields Eye Hospital, is to open a chain of 'branded eye surgery boutiques' across London won't surprise NHS trade unionists. The 'boutiques', bearing the world-famous Moorfields name, will be situated within ten other NHS hospitals around London.

Sue Slipman, director of the Foundation Trust Network (FTN), hoped future hospitals would be like Debenhams - where one shop is home to a collection of 'branded boutiques' providing patients with "convenient access to a full range of popular brands."

It was the FTN, and their regulator Monitor, which first called for primary care trusts (PCTs) to become commissioning-only bodies, a dangerous step which now appears to be government policy. A few months ago, the FTN demanded the right to expand their work for private patients to generate more income.

When the Foundation Trusts were originally proposed Alan Milburn was forced to cap the proportion of income they could earn from private work at the pre-Foundation percentage.

Yet the logic of the new-style NHS market means the Foundations will keep on pushing for the cap to be removed. After all the cap is not a market force. The Foundation Trust's demand was rejected - this time - by Patricia Hewitt, but worryingly was enthusiastically supported by Conservative health spokesman, Andrew Lansley.

The lobbying is bound to continue and meanwhile the Foundation Trusts may be tempted to use creative accountancy to bend the rules on private work.

Masters of spin

FOUNDATION TRUSTS are becoming masters of spin and PR. In July three of them made high-profile announcements that they've used their independence to fund new facilities. Moorfields is to build a children's eye centre, Stockport has borrowed 23 million to create a cardiology facility, and Homerton has borrowed 9.1 million for a new-born baby centre. A few days later they were lobbying for the less popular cause of increased private work.

However independence is not all milk and honey. The Foundation Trusts have 'freedom from Whitehall' but they can be dangerously exposed if their borrowing fails to make the expected return. Bradford, a former three-star trust and Foundation flagship, hit a 4 million deficit last January, mainly because of another government policy, payment by results.

Security guards, tea for patients and 200 staff posts were cut, the respected local Chairman was removed, and a firm of New York accountants appointed at huge expense to examine the finances. Peterborough, another former three-star trust, has had to close three wards to try and bridge a 7.7 million deficit.

Both these Trusts were awarded three stars when fully within the NHS, which means their finances were judged as sound. The government says they want all hospitals to move to Foundation status. What will happen when two-star, one-star and even no-star hospitals are sent off to become Foundations?

The big question is whether the government could allow a major regional hospital to go to the wall. The political damage would be enormous. But bankruptcy is part of the market.

Ditch the Private Finance Initiative

THE PRIVATE Finance Initiative (PFI) allows profit-seeking private banks and construction companies to be involved in building and running what used to be public services. Less than 4% of new hospital building projects now planned or in progress are publicly funded.

These PFI 'initiatives' are causing many NHS Trusts great financial difficulty. They have already increased the cost of running services while the payments to these profiteers are crippling. The growing cost of PFI-funded hospital projects such as Barts and Royal London has come under scrutiny even from New Labour.

The Barts scheme is expected to cost 1.89 billion with annual repayments of 115 million, 67 million of it rent for the PFI buildings. Over the scheme's 35-40 year scan, that would remove 5 billion from the NHS - even more if inflation increases.

The government's payment by results system adds to the problems. Hospitals are paid only for the work they carry out and the patients who pass through them. So it is difficult for Trusts to forecast the financial 'flows' over 25 to 40 years which could be enormously costly.

Obviously PFI is showing up the cost of Blair and Co's NHS 'reforms'. The Socialist Party says ditch the PFI swindle: fund all new hospitals with public money using direct labour.


SOCIALIST PARTY members from Cambridge, Ipswich and Felixstowe joined a lively but outraged demonstration on 17 December in Cambridge city centre. Up to 300 health service users and trade unionists protested at unplanned and counter-productive NHS cuts across East Anglia. 21 copies of the socialist were sold.

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In The Socialist 5 January 2006:

NHS: Condition critical

'Reforms' destroying the National Health Service

Fighting back against the millionaires' system

Election divisions shows Iraq war is unwinnable for Bush

Behind the gas conflict

Striking against low pay


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