NHS trusts could in future choose between becoming a foundation trust or an independent mutually owned company as the provider sector becomes increasingly ‘fluid and uncertain’, HSJ has been told.
The possibility of the mutuals option comes as the Department of Health announced the nine “pathfinder” trusts which are exploring models of staff ownership under its ongoing mutuals programme.
The trusts are all investigating whether becoming a mutual would benefit them, through boosting staff engagement.
King’s Fund chief executive Chris Ham, who is leading the programme for the DH, said mutualisation would provide a new option in an increasingly “fluid and uncertain” provider sector.
However, he added that becoming a mutual should not be an option for non-foundation trusts that have been judged unsustainable in their current form.
“This should not be an easy option – the criteria should not be relaxed,” he said.
“If you’re in the pipeline you have to satisfy Monitor that you’re well run and all the rest of it… At that point you might have a choice [about whether to become an FT or set up as a mutual].”
Care and support minister Norman Lamb added that becoming a mutual could be an “alternative to privatisation” for trusts despite there being no suggestion that trusts could or should be privatised.
“Fundamentally I believe in diversity,” he said. “I don’t believe in there being a single model. What is it to say that the FT model, which was designed all those years ago as a compromise between [Gordon] Brown and [Tony] Blair is the perfect solution?”
However, Professor Ham emphasised that not all nine pathfinder trusts would necessarily conclude that becoming an independent mutual would be a suitable option.
- Monitor increases scrutiny of FTs’ financial position
- Hospital trusts should be free to become mutuals, DH advised
- Ham: Public service mutuals will inspire greater staff engagement
Instead, they could simply choose to adopt approaches to engage staff - already seen in trusts such as Salford Royal Foundation Trust. Such approaches would not require a change in organisational form.
Professor Ham added that while there were good examples of NHS services run by mutuals, these were mainly confined to the community services sector, where organisations were much smaller and less hierarchical than acute providers.
The pathfinders programme faced the “challenge” of demonstrating the model could be applied on a larger scale, Professor Ham added.
Pathfinders trusts are also investigating the hurdles trusts would have to overcome if they were to become mutuals.
These include: access to capital; whether a failure regime would apply; the transfer of NHS owned property; and rules around transparency.
The work is expected to conclude in March and its findings are intended to form a body of evidence to allow the next administration to spin out the idea to all provider trusts.
The nine pathfinder trusts are:
- Cheshire and Wirral Partnership Foundation Trust;
- Liverpool Heart and Chest Hospital Foundation Trust;
- Moorfields Eye Hospital Foundation Trust;
- Norfolk and Norwich University Hospitals Foundation Trust;
- Norfolk and Suffolk Foundation Trust;
- Oxleas Foundation Trust;
- Surrey and Sussex Healthcare Trust;
- Tameside Hospital Foundation Trust; and
- University Hospitals of Leicester Trust.
- CHESHIRE AND WIRRAL PARTNERSHIP NHS TRUST
- Chris Ham
- Department of Health and Social Care (DHSC)
- East Midlands
- East of England
- Foundation trusts
- LIVERPOOL HEART AND CHEST HOSPITAL NHS TRUST FOUNDATION TRUST
- MOORFIELDS EYE HOSPITAL NHS FOUNDATION TRUST
- NHS Coastal West Sussex CCG
- NHS East Surrey CCG
- NHS Eastern Cheshire CCG
- NHS Greenwich CCG
- NHS Islington CCG
- NHS Liverpool CCG
- NHS Medway CCG
- NHS North Norfolk CCG
- NHS North West Surrey CCG
- NHS South Cheshire CCG
- NHS South Norfolk CCG
- NHS Surrey Heath CCG
- NHS West Cheshire CCG
- NHS West Leicestershire CCG
- NHS Wirral CCG
- NORFOLK AND NORWICH UNIVERSITY HOSPITAL NHS TRUST
- NORFOLK AND SUFFOLK NHS FOUNDATION TRUST
- Norman Lamb
- North West
- OXLEAS NHS FOUNDATION TRUST
- SALFORD ROYAL NHS FOUNDATION TRUST
- Social enterprise/shared ownership
- South East Coast
- SURREY AND SUSSEX HEALTHCARE NHS TRUST
- TAMESIDE HOSPITAL NHS FOUNDATION TRUST
- UNIVERSITY HOSPITALS OF LEICESTER NHS TRUST