Mental health foundation trusts should be allowed to earn up to 1.5% of their income from private sources, the government is proposing. And it is considering replacing caps on all foundation trusts’ private earnings with a different system.

Currently mental health foundation trusts are not allowed to earn anything from private patients under a cap imposed at the time the legislation that created foundation trusts was passed in 2003.

The new announcement is a messy interim solution to a problem that health ministers probably could not have imagined when they were pushing through the legislation.

At the time Labour MPs voiced concerns that the financially freestanding foundation trusts would exploit their new freedoms to boost their earnings from private patients at the expense of NHS ones.

As a concession ministers placed a cap on foundation trusts’ …