Published: 21/11/2002, Volume II2, No. 5832 Page 5

Government plans to allow the direct election of more than half of the governors of a foundation hospital have the potential to undermine the work of a trust's senior management, two influential think-tanks are warning.

Following last week's Queen's Speech, health secretary Alan Milburn told the Commons that the elected governors - drawn from and elected by local communities - would have an absolute majority on the stakeholder councils which will hold the new trusts to account.

The councils, according to Mr Milburn, will also elect the trust chair and non-executive members of the board, and approve the appointment of the chief executive.

The Office of Public Management and the Institute of Public Policy Research have offered a cautious welcome to the proposals. But they remain concerned that such councils could fail to work in the interests of the hospital - either by being elected on the basis that they oppose the creation of foundation hospitals or succumbing to the vested interests of senior doctors.

OPM chief executive Greg Parston told HSJ: 'You can have a situation where the people elected to the stakeholder councils do not share the same interests of hospital as the management. You could also have a council which is just split on the direction the hospital should be taking.

'That will create real problems for the management. [Hospital governors] have got to want to make the hospital a success.

Otherwise you will have a situation which undermines the working and the management of the trust.'

Institute of Public Policy Research research fellow Paul Maltby, who also expresses qualified support for the foundation policy, suggested that introduction of democratic accountability might give consultants the chance to influence the running of a trust to meet their own interests, because of a public assumption that doctors know best.

'What happens when public members in the council are being asked by doctors for more equipment or more wards? Doctors are seen as the experts even though they can act simply as an interest group without consideration of what is best for the hospital or the local health community.'

A Department of Health prospectus on foundation hospitals due out at the end of the month is not expected to be prescriptive on the constituency which elects members of the stakeholder councils - allowing foundations to reflect local needs.

Mr Milburn told the Commons there would be a 'legal lock' on the assets of the trusts 'to protect them from the demutualisation that we have seen in the building society sector in recent years or any future threat of privatisation'.

And Mr Milburn said he expected foundation hospitals to set pay within the boundaries due to be agreed by Agenda for Change. He said they would be expected to 'exercise discretion and flexibility, but there will be a broad national framework too'.