Aspirant FTs could have option to become a mutual

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.