Zobag's guide to Foundation Trusts!

Promised this to zobag last week so she can have an idea of the next set of fun and games coming her way :sad: , just knocked it up, might make it into some kind of series on NHS reforms and put it into Catalyst or DA. Hope people find it useful!

Foundation Trust status – a guide for NHS workers

NHS reforms part 1:- Foundation Trust status

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 it? 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 to try and minimise the number of us who actually 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 part of the NHS and becomes a privately controlled entity. Its land, buildings and equipment cease to be NHS property and come under the control of the Trust directors. At first glance this appears to be a clear case of wholesale privatisation. However, since privatising the NHS in this brazen way would be extremely unpopular amongst employees and users of the NHS, 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. I’ll examine them below…

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 will also be able to 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. They can also sell off former NHS land.

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 (those who really control 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 has to be. This membership 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 allowed to make and keep financial ‘surpluses’ and even to distribute some of these to private shareholders, just like private corporations. Foundation trusts are also structured and run like private corporations. They will have to compete for money from ‘customers’ and PCTs with private hospitals and other NHS trusts, just like a private corporation. It looks like one, it sounds like one, and clearly it will behave like one. So what are the implications for staff?

FTs sole responsibility is to provide health services ‘effectively, efficiently and economically’ – ie 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, and understaffing problems which have led to the rise in hospital infections – 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 use of, and 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 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 such as 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 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.

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. 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. It’s time to get angry.