Community foundation trusts - market forces or forced markets?

The government has backtracked from plans to force the commissioner/provider split, but for PCTs that do make the break, could community foundation trusts be the answer? Jennifer Trueland looks at the next stage of the foundation revolution.

To former health secretary Frank Dobson the idea is 'crackers' and those who thought of it should be locked up.

The government, on the other hand, sees it as a way of spreading the joys of one of its pet policies, which, until now, has been confined to acute hospitals and mental health.

Despite the misgivings of Mr Dobson and others, community foundation trusts are likely to become a reality in the relatively near future.

The Department of Health is enthusiastic. Last month's commissioning framework says the idea is actively under consideration, adding that the government is 'attracted to this model'.

The basic idea is that community foundation trusts would provide community services currently run by PCTs, and that the foundation trust business model would allow them to compete with other entrants to the market.

According to the paper, such a move would 'strengthen community services, keeping them wholly within the NHS' and 'protect staff terms and conditions, including pension provision'.

Discussions are already under way with Monitor, the independent regulator of foundation trusts, which has also cautiously welcomed the proposal. All being well, the first pilots could begin in months.

An unwelcome burden?

But what will they look like, what will they do, and will others share the government's 'attraction' to the concept? And will primary care trusts - many still involved in massive restructuring - want further change?

NHS Confederation deputy policy director Jo Webber is cautiously welcoming about the idea. She believes some PCTs will share that view - but not all. 'It's been a challenging time,' she acknowledges. 'PCTs are going through fitness to practise [assessments] and reconfiguration. But that's a good opportunity to stand back and take stock. There's been a lot of turmoil but they're starting to plan future direction.'

She believes that community foundation trusts could benefit from economies of scale. 'Providing community services for more than one PCT area gives the ability to look at scope, to build an organisational memory. It means staff will still be employed in the NHS on the same terms and conditions and that will allay staff fears.'

That's not to say community foundation trust status will be for everyone. 'I think it will be horses for courses and it would work better in some areas than others. We might see different models responding to the needs of local areas.'

Whatever happens, forming foundation community trusts would almost certainly mean a real separation between commissioning and providing services. Indeed, the whole plan may be an attempt to do just that, after previous proposals to force PCTs to farm out provision to private and third sector organisations were scuppered by unions and rebellious Labour MPs last year.

A division of roles

Ms Webber thinks there could be advantages in the separation. 'The community foundation trust would concentrate on the provision side and that would leave the PCT to concentrate on commissioning. Really the important thing will be to ensure both sides are enabled to develop in the way they need.'

Community foundation trusts will have to be standalone organisations, not part of the PCT, she says. And commissioning processes and any transactions between them will have to be fair and transparent.

Cambridgeshire PCT interim chief executive Chris Town agrees: 'We've got to make sure new PCTs get their act together on commissioning,' he says. 'I'd like to see commissioners giving 100 per cent of their time to commissioning, so we've got to get a clear separation between commissioning and providing ? arm's length at minimum.'

In his view, what the NHS has been doing in the past few years is not so much commissioning, but contracting. He sees a big difference between the two.

'Commissioning is about redefining clinical processes, responding to local need and priorities. Contracting should be the end point when you know what you want. It shouldn't be about finding a legal framework for what you're doing already. Commissioning is about looking at the best evidence on how to treat a diabetic, for example and if that shows they should have a check up twice a year, then that's what you commission. It's not about saying &Quot;here's some money to carry on treating diabetics like you always have&Quot;.'

Cambridgeshire PCT has already taken steps that would put it in a good position to form a community foundation trust. As of 1 October, it is essentially hiving off its provider functions, which will become quasi-independent organisations with their own management, staff and payroll. These bodies will have service level agreements with the PCT to provide services. But the PCT will, of course, be at liberty to commission from a variety of sources.

Deja vu

So is this just a return to a Tory-style internal market? Ms Webber believes not. 'The big difference is patient involvement. Before the model was more paternalistic. And foundation trusts also have more clinical engagement. That means that the NHS can use all that information and intelligence from patients and clinicians to be more responsive and improve outcomes.'

Foundation Trust Network policy manager James Peskett welcomes the idea but with a few concerns. 'These are around whether the model is applicable for some of the organisations which might apply, where a social enterprise model might be more appropriate for example,' he says. And we'd want to ensure that any organisation going for foundation status had the financial and governance rigour required.'

He believes community foundation trusts could be good for patient care. 'Clearly one of the great advantages is foundation trusts' responsiveness towards local populations,' he says.

'The Department of Health wants to keep itself at arm's length from provision and expanding foundation trusts is a rational way of doing this.'

The commissioning framework also opens up the way for acute foundations to bid for community work. Mr Peskett, for one, would not have a problem with the idea. 'It depends on local circumstances,' he says. While there could be a risk that acute trusts would want to pull more services into hospitals, this would be unlikely because it would not be the most efficient way of doing things ? and so would be 'punished' under payment by results.

Mr Town is rather more suspicious about this. 'My personal view is that there's a danger if the whole system is in the hands of one contractor. There could be conflicts of interest.'

That's a view shared by NHS Alliance chair Dr Michael Dixon. 'I wouldn't want to see foundation trusts gobble up community services, because they'll have an acute bent,' he says. 'They might use community services to feed the hospital.'

On the other hand, he is in favour of the idea of community foundations in general. 'I only wish they had been introduced years ago because now primary care is starting behind hospitals,' he says.

Monitor itself is not saying too much about the likely shape of the new organisations or even when they might come on board. Director of strategy Adrian Masters says: 'We are currently working with the DoH and a number of interested PCTs to explore the feasibility of foundation trust status for PCT provider arms? However there are a number of issues we need to work through to get a better sense of the benefits, risks and costs before setting out a realistic timeline.'

In particular, he says Monitor is thinking through likely service models and how issues such as contracts, funding and governance would be handled. 'We need to understand how far PCT arms are from operating as standalone organisations and what steps are needed to get there,' he adds.

'We will also need to decide what track record is required once they do get there, before we can be confident that they can operate successfully as autonomous foundation trusts.'

In the commissioning framework, the government stresses that community foundation trusts would keep staff within the NHS ? a major bone of contention with previous proposals. Dr Dixon believes 'it's a way of devolving the provider function without tears'.

But whether it will be enough to silence dissenters remains to be seen.

Unison senior national officer Mike Jackson says the whole process is causing uncertainty and worry among staff. He says community foundations would create a market in primary care. 'Rather than units of the NHS co-operating with each other, they will be competing with each other,' he says.

He says the process is creating uncertainty and insecurity among primary care staff, which is bad for staff morale, retention and patient care. He is also concerned that providers would not have to meet basic workforce standards and respect Agenda for Change terms and conditions.

Frank Dobson - a long-standing critic of the government's health reforms - is unconvinced. 'I think this proposal is crackers,' he says. 'Some ideologues in Downing Street spotted that PCTs provided and commissioned and thought it was unacceptable. Well I say people like that ought to be locked up.

'When Labour MPs rebelled last year we were told PCTs wouldn't be forced to do this - that it would be up to local people to decide. Well that's moonshine. PCTs have been reformed and amalgamated and you can bet that arms have been twisted to make sure the chairs and chief executives think community foundation trusts are the way to go.'

Getting the public voice into primary care

Whatever the new bodies look like, there is little doubt that they would require the same level of patient/public involvement as acute foundation trusts. This could in itself provide challenges.

Joe Farrington-Douglas, research fellow specialising in health policy at the Institute for Public Policy Research, likes the idea of communities having a greater voice in primary care, especially if it gives the public more of a sense of ownership of health services as a whole, not just their local hospital. 'Commissioners should be responsive to patients,' he says. 'But democratic involvement at the moment exaggerates the problematic identity of the &Quot;NHS&Quot; being the local hospital. We want people to be loyal to the NHS brand rather than hospital buildings.'

Would this happen with community foundation trusts? 'The social capital for health involvement is limited,' he says. 'Especially if it feels symbolic.'

He admits to being suspicious of the idea of 'misty-eyed mutuality' inherent in foundation trusts, suggesting that the extent of patient involvement was 'an add-on to sell to backbench MPs'.

'The problem is that the governors and members tend to come from small populations - they're self-selected health enthusiasts. And there's quite a lot of uncertainty about the role.'

Creating community foundation trusts would, he believes, be a step towards shifting the balance towards a primary care-led NHS - a move away from the idea of the hospital as king.