Published: 16/05/2002, Volume II2, No. 5805 Page 6 7

Britain's largest provider of private healthcare, BUPA, has said it is unlikely to bid to run NHS hospitals under the government's franchise scheme.

Last week, the Department of Health advertised for private sector hospitals and managers to join a register of organisations and individuals to take over the failing trusts which will emerge from the next set of star ratings - due out this summer.

A number of management consultancies have expressed interest in the controversial scheme, including Capita. But BUPA said that although it wanted to continue its work with the NHS under the private sector concordat, franchised hospitals were 'not part of its core business'.

'The management expertise is certainly there, ' a spokesperson told HSJ. 'A lot of the managers we employ have come from the NHS.

But our core business is not running accident and emergency departments. We saw last week how good the NHS is at doing that, with the way it responded to the Potters Bar train crash.'

'We see our relationship with the NHS in terms of the private sector concordat.'

John Tizard, director of policy development at Capita, said the company would be 'responding positively' to the government's overtures to the private sector. It sees the franchise system as similar in many respects to that used in education to run failing schools.

'We have considerable experience in providing strategic management support and advice to the public sector. One possible model for building capacity in the NHS is that which we have successfully developed in partnership with local authorities, and particularly local education authorities.'

The contracts will be for three years and open to extension. They will not involve the transfer of any publicly owned assets from the NHS. But there will be an 'agreed management fee or similar mechanism'.

The mechanism may be based on the one used to run the 500bed Fundaci¾n Hospital in Alcorc¾n, Spain - a publicly financed hospital visited by the health secretary last November which is run by a private management team for a fixed fee, and not allowed to make a profit.

Last week, the DoH said it would be looking for 'expertise in managing and improving performance in large and complex service delivery organisations, an excellent track record in both financial and human resource management and a commitment to the public service ethos'.

The Independent Healthcare Association said it hoped that the franchise scheme will offer 'sufficient freedom' to allow managers to use their expertise gained under the free market.

'I think most managers would want to escape interference from Whitehall so they are free to address the problems facing these hospitals. Otherwise, there would be no point in getting involved.'

A spokeswoman for the GMB said she was concerned that management 'freedoms' could be understood by the private sector to involve the opportunity to change pay and conditions, rather than using the expertise of workers to improve ways of working.

And she said a conflict of interest could emerge if some of the private sector firms already involved in the private finance initiative decided to get involved in running franchised hospitals.

'We understand a number of such firms are already expressing interest in the idea, ' she added.

Incumbent chief executives to run no-star trusts The teams who will run the first four trusts to be franchised have been announced. In all cases, trust chief executives brought in in recent months following no-star ratings will stay in post, with Sue Jennings at Dartford and Gravesham trust, Alan Bedford at Portsmouth Hospitals trust and Paul O'Connor at Barnet and Chase Farm Hospitals trust. At Ashford and St Peter's Hospital trust, Andrew Morris will stay for a year before being replaced by Glen Douglas, who will be project director until he takes up the chief executive position.Before he joined the NHS, Mr Douglas was a consultant for Coopers and Lybrand, advising the health service.