Published: 31/01/2002, Volume II2, No. 5790 Page 6 7

The creation of foundation hospitals as mutuals or public interest companies could return health services to a pre-1948 model of private ownership, according to Dr Tim Evans, the Independent Healthcare Association's executive director for public affairs.

Dr Evans claims that the plans announced by health secretary Alan Milburn in his speech on 'redefining the NHS' would see the 3,118 hospitals and clinics 'nationalised' by Aneurin Bevan revert to the private sector.

Dr Evans said he thought the NHS would be 'the major regulator and the main funder for some years ahead', but added: 'I believe the NHS estate that was nationalised in 1949 will very slowly mutate back to private ownership.'

Dr Evans continued: '[Mr Milburn] wanted to return the best of these trusts to completely independent ownership, ie to exactly the same status as BUPA.'

Dr Evans' views were echoed by a leading opponent of the private sector's increasing role in the NHS, University College London's Professor Alyson Pollock. She told HSJ: 'You have got the recipe for the disastrous, inequitable service pre1948. No matter how anyone dresses it up, whether on the left or the right... It is not putting the public first; It is putting needs ofsmall entrepreneurs first.'

The move was 'the first stage towards greater privatisation', she said. 'If you look at America, all the not-for-profits have turned over into for-profits.'

But industry analyst William Laing said: 'I do not see any enormous change in this. This is taking changes in rules and reinterpreting them as changes in concepts.'

Mutuals and public interest companies were 'not in any sense the private sector' and ownership of foundation hospitals would still be vested in the secretary of state, he said. 'The only way it would become private sector is if it is sold to the private sector.'

NHS Confederation acting chief executive Nigel Edwards attacked 'Westminster village navel contemplation'.He said: 'The thinking that leads to foundation hospitals - that you have to devolve power - is right. The question is, how do you get this devolution without creating isolated, unintegrated bits of system all doing their own thing? One would hope three-star trusts appreciate that the benefits of collaboration outweigh individual action.'

Mr Edwards urged a focus on integrated care systems rather than 'getting excited about structures'.

The Department of Health was this week still unable to supply details of how Mr Milburn's vision would take shape in practice.

Unions reassured on national pay Health unions say they have received assurances from health secretary Alan Milburn that foundation hospitals will not undermine the new national pay system being negotiated in the Agenda for Change talks.

Royal College of Nursing acting employment relations director John Humphreys said: 'Clearly there was a concern, particularly after statements in The Times, and by [junior health minister] Lord Hunt on [BBC2's] Newsnight, that foundation hospitals would not be subject to national terms and conditions.'But the union had received clarification, he said.'There will be flexibilities for foundation hospitals, but they will be from the local flexibilities built into a national framework.We are certainly happier [now].'

Unison negotiator Paul Marks welcomed Mr Milburn's confirmation that 'there would not be complete independence from the NHS for foundation hospitals'.