A buddy system of 'structured mentorship' allowing managers in strongly performing trusts to help out their peers in organisations doing badly has been outlined as a model for the NHS franchises the government has been touting this week.

NHS Confederation chief executive Stephen Thornton met NHS chief operating officer Neil McKay on Tuesday to outline how 'franchising' might work - the first time the organisation had been involved in any discussions about the concept, though it was first proposed several months ago.

Mr Thornton described franchising as 'a kernel of a good idea' and is now working with the government to help turn it into something that will be welcomed by the service.

The franchise concept was raised again in the Institute of Public Policy Research's commission report on public-private partnerships published this week - though it is clear that the government sees franchises as being firmly public sector-led.

The Department of Health has confirmed that it sees franchising as a solution for those trusts which are given a red traffic light.

One scenario put forward is that several trusts would compete to provide a solution to a failing organisation, with clear targets drawn up on which the bidders would be expected to deliver. The reward for trusts providing those solutions would be a share of the£500m performance fund.

But the DoH is less clear on how franchising would work in practice and how it would avoid diluting the pool of management talent by spreading it more thinly.

The NHS Confederation's approach, which it will also discuss with the health secretary next week, would ensure supportive relationships between strong and weak trusts with no management takeover.

Problems would be identified - for example, poor accountancy or weak medical leadership - and then the skills required to solve the problem. Managers with those skills would be allocated to the weak trust, perhaps one day a week, ensuring its own managers did not relinquish control and enabling them to learn from their peers as well as allowing 'the sum total quality of the NHS to be raised'.

HSJ understands that franchising is likely to focus on business plans submitted by trust teams to tackle particular problems. A trust bidding for a particular project could co-opt management or clinical skills from the private sector or local government in order to form a consortium to deliver its solution.

It is also likely that the Modernisation Agency, and the NHS leadership centre in particular, will have a role in implementing the initiative.

Franchising is expected to be up and running within the next few months and there will be urgent moves to establish a system that is workable and acceptable.

Ian Carruthers, chief executive of Dorset health authority, who described franchising as 'putting the entrepreneurial spirit into the health service', said: 'The concept needs to have applicability to all healthcare organisations. . . But it is one that is warmly supported and it can only be good for the NHS and it will be good for NHS management - the issue now is how we identify the people who can form those teams. '