DH sticks to guns on removal of FT income cap and borrowing controls

The Liberating the NHS: Legislative Framework and Next Steps paper acknowledged the government’s plans to increase competition between providers had “polarised opinion”. However, it says plans to abolish borrowing controls and to remove the cap on income from private patients will go ahead.

It said that despite “strong views” against the proposal, the government will remove the limits on the amount of private income trusts can earn, which it called “arbitrary and unfair”.

With regard to statutory borrowing limits, the response said these “run counter to our objective of a fair playing field”.

While the document confirmed a new banking function within the DH will be responsible for loans to FTs – which must be made under commercial principles – the response said the new system would give “stronger incentives and a credible risk of failure”.

It was confirmed that stand alone FT applications would have to be submitted by 31 March 2013 and authorisation for foundation status would become a one-off test. A Provider Development Authority will be set up to help all trusts to achieve foundation status.

The Department of Health document also said it will not pursue a “staff-only” membership model for foundations. The model would have seen a similar form of ownership to the John Lewis Partnership and was suggested as an option for community services providers.

The response also signalled that the forthcoming health bill will “make explicit” the duty of foundation trust governors to hold directors to account.

Foundation Trust Network director Sue Slipman said she welcomed the ending of the income cap and the rejection of the John Lewis model.

She said: “In particular, the ending of the so-called private patient income cap will free FTs to expand their services to patients and bring much needed cash into the NHS.  

“We welcome the government’s recognition of the public and wider stakeholder role in FTs and agree that it would have been inappropriate to pursue ‘staff-owned’ FTs.

She added: “We do recognise that some NHS trusts are going to find it difficult to achieve FT status, but the government is right to refuse to lower the quality bar, so that patients, staff and the whole country can maintain their confidence in the service that FTs provide. The FTN will continue to provide support to these organisations.”