Editorials

Foundation trusts

BMJ 2003; 326 doi: https://doi.org/10.1136/bmj.326.7403.1344 (Published 19 June 2003) Cite this as: BMJ 2003;326:1344
  1. Jennifer Dixon, director (jdixon@kingsfund.org.uk)
  1. health policy King's Fund, London W1G 0AN

    Where next?

    Much heat and light have been generated in the media recently as a result of the second reading in the House of Commons of the Health and Social Care Act 2003. The most controversial aspect of the bill was the proposal to allow NHS trusts to become NHS foundation trusts, with extra freedoms to run their affairs compared with other NHS trusts.1 Three main freedoms have been granted. Firstly, foundations can borrow capital, sell assets, and importantly retain in-year surpluses. Secondly, direct control from the Department of Health will be relaxed and greater managerial freedoms granted-for example, to reward staff-and foundation trusts will be accountable to a new independent regulator. Thirdly, more freedoms will exist with respect to how foundation trusts are governed, although they will have to establish a new board of governors elected in part by local communities.

    Freedoms diluted

    The freedoms have been diluted. For example, the borrowing of capital is subject to a “prudential limit” set by the Treasury, and foundation trusts will now have to stick to pay rates for staff set out in a recently accepted policy, Agenda for Change.2 The freedoms were curbed for political as much …

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