LGA slams sales profit plan

Plans to allow NHS foundation trusts to keep cash raised by selling off their assets have been condemned by the Local Government Association.

Chair Sir Jeremy Beecham said a mechanism should be introduced to 'pool' the proceeds across the NHS rather than benefiting one organisation whose assets were, he claimed, an accident of history or geography.

Speaking at a public policy seminar at London University, Sir Jeremy said: 'It is [not] equitable to allow those hospitals which by accident of geography or history - medieval or otherwise - happen to sit on assets, which can be disposed of at a premium, to retain the entire proceeds.

'There should certainly be incentives for disposal where those assets are either required for operational or income purposes.

But a pooling mechanism to assist those institutions less favourably placed should surely be created to share the benefits.'

His concerns echo those expressed by the House of Commons health select committee report into foundation trusts which worried about the potential to cause inequity between foundations.

Joan Rogers, chief executive of North Tees and Hartlepool trust, and Robert Naylor, chief executive of University College London Hospitals trust, explained to the committee about their trusts' differing land values.

Sir Jeremy also warned that the Health and Social Care (community health and standards) Bill would allow private sector firms to apply for foundation status.

Not only would this increase pay and conditions disparities, he said, but it could place fewer restrictions on the level of private work they carry out compared to those placed on NHS foundations.

But Peter Fermoy, spokesman for the Independent Healthcare Association, told HSJ that most independent sector organisations would see little value in applying for foundation trust status under the government proposals.

'I would ask why any private company, any organisation from the independent sector, would want to go for foundation status.

They already have freedoms over pay, the financial freedoms. It may come down to a perception that primary care trusts would find it politically easier to commission services from such organisations rather than what they see simply as the private sector. But that is a psychological argument.'