The House of Lords has voted to allow the government to make “exceptions” to the rule that limits the amount of private work a foundation trust can do.

The amendment was developed by the Foundation Trust Network and was moved by crossbench peer Baroness Meacher, chair of the East London foundation trust.

In theory it does not abolish the cap set out in the 2003 Health and Social Care Act. Instead it gives the health secretary powers to make an “exception” to it, provided that “be in the interests of the NHS”.

Level playing field

One of the motivations for the amendment is to establish a more level playing field between foundation trusts. The cap limits the proportion of income a foundation can earn through treating private patients to its 2002-03 level. This means that mental health foundation trusts are unable to take on any private work as there was no market for this in 2002-03.

Earlier this year Baroness Meacher tabled a similar amendment in the Lords which tried to replace the cap with a requirement for foundation trusts to prove their private income benefited NHS patients. That was withdrawn after the government whip Baroness Thornton said it was unworkable.

Debating the merits of her revised amendment, Baroness Meacher said it would allow ministers to introduce regulations to ensure “private patient services will not be subsidised by the NHS and that those services will not dilute or adversely affect the core values of the NHS”.

Trojan horse

But Labour peer Lord Campbell-Savours said the amendment was a “Trojan horse that could be used by a future government to completely undermine whole areas of the NHS”.

The private patient income cap had been a crucial safeguarding concession given to Labour MPs when the original foundation trust legislation was debated, Lord Campbell-Savours said. It was therefore vital that any changes should be comprehensively discussed in the Commons through debates on primary legislation, rather than in the Lords.

Baroness Thornton agreed, calling the new amendment a “quick fix”, which in any event may be legally unworkable. She said the government “sympathise with and understand the intention and the spirit” behind the amendment and continued to want a “wider debate” on the cap.

That should wait until after Unison’s judicial review of the way the foundation trust regulator Monitor has allowed foundation trusts to not count certain types of private patient income when interpreting the cap, she said.

New tests

But the government believed the best way to reform it would be to “create a new test set of principles that would apply equally to all foundation trusts”.

The workings and impact of any such tests should be debated in the NHS before they entered legislation, Baroness Thornton said.

The amendment was tabled as part of the debate on thehealth bill which is currently making its passage through Parliament. The Lords voted 191 to 133 in favour of the amendment. A Department of Health spokesman said: “We are reflecting on Tuesday’s vote and will respond through the normal parliamentary process.”