A workers’ guide to Foundation Trusts

June 4, 2007 at 5:22 pm Leave a comment

An article I wrote for the most recent issue of ‘Direct Action’ magazine (www.direct-action.org.uk) to shed some light on the plans for all hospitals and even PCTs to undergo transition to ‘Foundation Trust’ status, one of the government’s current weapons of choice in the privatisation by stealth of the NHS and the cuts to jobs and services which go with it. The information fed to health workers by hospital managers keen to achieve foundation status is extremely misleading – find out the things they don’t want you to know here.

Foundation Trust status – a guide for NHS workers

We all know that the NHS is undergoing a period of ‘reform’, but what is actually happening? And what does this mean for those of us who work within the NHS? As you might have guessed, the government doesn’t exactly have our best interests at heart, and so their pretty simple policy of privatising any areas of the NHS which are financially profitable and closing down the rest of it are disguised in all kinds of strange new terminology and confusing doublespeak. All to try and minimise the number of us who realise what is happening! This is the first of a series of guides for health workers outlining the nature of specific pro-market reforms going on in the NHS and what they mean for NHS employees.

There is currently a big push for NHS trusts to become so-called ‘NHS Foundation Trusts’. What this means is that the trust in question (usually a hospital) effectively ceases to be accountable to the Department of Health and becomes a privately controlled entity. Its land, buildings and equipment are no longer NHS property and instead are under the control of the Trust directors. An independent monitor (imaginatively named ‘Monitor’) is instead responsible for monitoring the trust’s performance, just as is the case with other privatised industries, and is almost entirely concerned with financial considerations. At first glance this appears to be a clear case of wholesale privatisation and interestingly has even been referred to as such by Unison general secretary and Labour hack Dave Prentis, who has declared foundation trusts to be ‘private hospitals’. However, since privatising the NHS in this brazen way would be extremely unpopular amongst employees and users alike, the government has introduced a number of (pretty feeble, it has to be said) ‘safeguards’ which, the argument goes, mean that this does not count as real privatisation. We examine them below…

Profit-based healthcare

1. Foundation Trusts are, according to the government, ‘not-for-profit’ organisations. The basis of this claim is that they are not permitted to be owned by, and provide profit to, shareholders. However, foundation trusts are allowed to keep ‘surpluses’ (profits by another name) thus providing the clear incentive to run the trust as a commercial concern rather than for public benefit. They can ‘dispose of’ (ie sell off) former NHS land and assets (even those used for the provision of NHS services) and keep the profit. In addition they can provide private healthcare services – the proportion of their income they can earn from these is currently capped, though this cap is under review. They can also enter into joint ventures with private corporations, which essentially allows the trust to engage in all the dodgy commercial activity which it is formally not allowed to do! These joint ventures can, for example, finance private loans out of NHS revenues, charge fees (and these can account for as much of its revenue as it wants) and must make profits and distribute them to shareholders. These joint ventures don’t even have to have anything to do with healthcare!

Corporate structure

2. According to the government foundation trusts are ‘accountable to their local community’ – they even have the cheek to try to present it as some kind of democratic advance! The reality is that executive directors, responsible for the day-to day funding of the trust, are completely unelected. Non-executive directors are indirectly accountable to a vaguely-defined ‘membership’ which is supposedly representative of staff and the local community, though there are no rules as to exactly how representative it should be. This membership (along with interested local bodies such as the council, Primary Care Trust etc) elects ‘governors’, who in turn elect the non-executive directors. All rather complicated, but when it comes down to it the structure of a foundation trust is very similar to that of a private company, with power just as concentrated and unaccountable. Despite government attempts to create an Orwellian new label (‘Public Benefit Corporations’) to define foundation trusts, the Office for National Statistics correctly classes them as private rather than public bodies due to this unaccountability.

So when you combine points one and two the implications are clear. Foundation trusts are structured and run just like private corporations. They can make and keep financial ‘surpluses’ and even distribute profits to private shareholders – just like private corporations. They will compete against private hospitals and other NHS trusts for money from ‘customers’ and Primary Care Trusts – just like private corporations. In short, a foundation trust looks like a private corporation, sounds like one, and clearly it will behave like one. So what are the implications for staff?

Foundation Trusts and you

The responsibility of a foundation trust is to provide health services ‘effectively, efficiently and economically’ – i.e. to focus on the balance sheet, not patient need. They are free to set their own pay scales, and who knows when it might be financially prudent to slash your pay in a way which an NHS trust bound to national pay agreements would not be able to do? FTs are also free to contract staff out to private companies – we have already seen this happening in non-clinical areas such as catering, cleaning, parking, etc. with disastrous results in terms of staff pay and conditions, as well as understaffing problems which have led to the rise in hospital infections. Clearly it’s cheaper not to provide enough staff to clean the hospital properly, and that way more profits can line the pockets of parasitical shareholders. FTs threaten to extend this contracting out to private corporations further, including into clinical areas. If you don’t want to see yourself and your job sold to the highest bidder like chattel, then foundation trusts are something to be opposed!

Even if your job is not outsourced the clear incentives to the directors to run the trust like a business rather than as a public service will place similar commercial pressures on employees. They will want more done for less, which will more than likely mean that your workplace is understaffed and you are overworked. If you work in a less ‘profitable’ area of healthcare, such as with ‘chronic’ long term conditions – various kinds of rehabilitation, elderly care, mental health, etc. – your job may disappear completely. This kind of healthcare is not easily run in the kind of conveyor belt way which sees a steady throughput of patients bringing in the cash, but is rather more complicated, long-term and to put it bluntly, bad for business. It is no coincidence that mental health and elderly care have been among the areas hardest hit by NHS cuts in recent years. Whilst this is clearly a bad thing in terms of our job security, it also surely needs to be opposed by the vast majority of NHS workers who care about the people we treat – we want to work in a service that takes care of everyone who needs us, regardless of how ‘profitable’ they are.

The Future

The government has stated that its target is for all NHS trusts to become foundation trusts by 2008. This includes Primary Care Trusts which purchase healthcare from hospitals – I’ll go into the complicated workings of the (now renamed, but unfortunately still going strong) NHS ‘internal market’ in a future article. It has also stated that private healthcare providers will be eligible for foundation status. The future mapped out for healthcare provision in this country, therefore, is one of private and privatised foundation trusts competing with each other for ‘customers’ under the supervision of the independent ‘Monitor’ – in other words wholesale privatisation of the NHS. Transition to foundation trust status is an integral part of this process.

Prospects for resistance

Unfortunately, but rather predictably, the main criteria by which the government assesses a hospital’s application for foundation status is financial. Despite the usual lip service to accountability, in practice they don’t really need to demonstrate any level of public or staff support for these drastic changes, or even to explain properly what is happening. To date, no campaign to prevent a hospital becoming a foundation trust has been successful, largely perhaps because the whole process of NHS privatisation is so well disguised behind government lies and propaganda. However, it’s important that NHS workers and users know what is going on because at some point we’re going to have to turn things around if we want to live and work with a healthcare service worthy of the name. With the leadership of the main health worker unions irrevocably tied to the Labour Party it’s clear that the massive opposition needed to reverse these changes is not going to be organised for us – we’ll have to do it ourselves. As anarcho-syndicalists we already know that self managed collective struggles employing direct action tactics are the only weapons we have which can really get the goods in this or any other sector – it’s high time we got organised and got angry.

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Entry filed under: healthcare workers, NHS 'reforms'.

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