The first foundation trusts in England and Wales were established on 1 April 2004. These trusts are a cornerstone of the government's policy to decentralise decision making in the NHS.1 To proponents, foundation trusts are setting the NHS free from the yoke of central government.2 To opponents, however, these trusts represent a kind of back door privatisation which may destabilise the NHS and introduce a two tier service.3 The NHS inspectorate, the Healthcare Commission, has now reviewed the first 20 foundation trust. It published its report this week.4

Foundation trusts are not for profit public benefit corporations with extra freedoms to borrow capital, sell assets, retain surpluses in each year, and to develop their own systems for managing and rewarding their staff. These trusts have to meet national targets and standards like the rest of the NHS, but they are free to decide how to achieve this. They are not subject to directions from the secretary of state for health or to performance management by strategic health authorities and the Department of Health. There are now 32 foundation trusts, all converts from the previous model of NHS trusts, and all overseen by a new independent regulator called Monitor.5

Although foundation trusts have their own regulator, the government asked the Healthcare Commission …