Understanding Privatisation of the NHS through Foundation Trusts

Foundation Trusts were introduced in 2004 in England, by the Government as a response to financially failing NHS hospitals. All NHS hospitals in England must be Foundation Trusts by 2014 according to the Health and Social Care Act 2012 but the government does recognise that it may take longer for this to happen. These types of hospitals require directors (with input from the governing body) to independently manage the budget without Government involvement, essentially a privatisation. Each Foundation Trust must be declared “financially and clinically” viable by the independent regulator Monitor. So what are implications on this new form of hospital on patients and staff?

Despite having had a limit on the private services they may use, the NHS has utilized private beds, private care homes and forms of private care for several years. The cap on the use of private services within Foundation hospitals, has been further increased to 49% (Kmietowicz 2012). This means there may be an even greater use of private services moving forward. It’s highly likely we’ll see the likes of Boots the chemist or even McDonalds restaurants within hospitals in the future. Staff themselves, may be provided by private contractors. Indeed there is nothing to stop a private company itself from running a Foundation Trust as UNISON suggests (2003).

This has huge implications for the type of patient accepted within hospitals. 70% of hospital patients are old people (Campbell 2013) many so called “bedblockers” who simply cost the hospital money on their slow but sure path to death. Such vulnerable patients may well be returned to the community where services are lacking. Indeed, there is a proposal to use unused NHS buildings managed by hotel chains to accommodate old people who need care, such as people with dementia. Within some districts for example, we already have certain services being returned to the community because they are draining on private profits.

There is already a proposal to do this by some members of the Clinical Commissioning Groups who control the NHS budget within England (Campbell 2013). Surely if hospitals are paying for private beds elsewhere, it still costs money? Or is it reshuffling of the budget? Indeed there have been issues with NHS funded patients using private beds within private hospitals. For example care of NHS patients may be delayed unnecessarily by the private hospital to encourage them to actually pay (Laurance 2012).

Legally Foundation Trusts can oppose the Agenda For Change for staff – guidelines that specify staff salaries and terms and conditions such as sick pay. Indeed many Foundation Trusts are considering this despite union objections (Calkin 2012). Yet are unions strong enough? There is evidence that unions are far weaker than they once were (Milne 2012). Hospitals do have enormous agency bills for qualified staff, after reducing the number of their own permanent staff. Use of agency staff may actually offer further problems. For example lack of familiarity within hospitals they are contracted to.

Furthermore greater number of overseas staff may well be used to save money. Many overseas staff are paid less and are keen to work for less pay and conditions. This may bring additional problems such as their training and language difficulties. Even the validity of their qualifications may be under question (McFarlane 2013). Worryingly some newly qualified nurses indicate they have been rejected for posts, as hospitals have internal quotas of overseas nurses they are required to employ.

If it is possible to oppose such regulations regarding staff, what other regulations may be opposed? Foundation Trusts are actually as UNISON declare, a “means to privatisation by the backdoor” (2003). The private sector obviously has different procedures and guidelines and staff generally receive less pay and fewer conditions apply. Regarding the complaints systems, in Foundation Trusts the Monitor regulation system will still apply but the Patient Advice and Liaison Service (PALS), which gives direct guidance to patients may not. Presently the health ombudsman will still apply also.

Some charities such as Healthwatch do exist to ensure patients get their voices heard. The independent body was established to influence health and social care within local areas. Healthwatch can advise patients where to go to complain. The GP care consortium has also pledged to investigate complaints for NHS funded patients; NHS England will do so regarding primary care. Some areas in England also have independent advisory bodies established by charities.

While proponents have argued that the existence of Foundation Trusts will generate competition between hospitals, and increase quality of care, in the long run as some services outperform others we may end up seeing mergers and centralization. Competition is not always an ongoing thing, because naturally competitions are won. If monopolies are formed this could reduce patient choice, and lower healthcare.

The rise of Foundation Trusts has also seen a diminished role for professionals like physiotherapists, who have been slowly pigeonholed as a luxury and not a health-care necessity. The Chartered Society of Physiotherapists and others, are campaigning against this erosion of their important role, and is an example of how privitisation leads to a re-definition of what is expected from hospitals.

In many ways Foundation Trusts reflect school academies, that have seen staff paid less, the need for certain qualifications reduced, a reduction in the ability to make effective complaints and arguably lower standards. Academy schools also have no requirement to adhere to the national curriculum. Indeed we now read, academies are actually to be completely privatised despite the government having denied this for several years. Is this the path for the NHS?

Are Foundation hospitals in essence a cynical means to reduce costs for a bankrupt Government with no true motive to maintain high standards? Are they also a means of abdication of government responsibility, hence blaming the individual hospital and governing body, not the Government itself? Only time will tell.

Meanwhile many nurses, student nurses and lecturers remain frighteningly unaware of the possible implications of all this. We all need to be politically aware of how such decisions affect the care that we provide at the patient’s bedside.

For further analysis of this and other issues, watch for our forthcoming book;

“The Commodity of Care”.


Calkin S (2012)

South West Trusts Set Up Regional ‘Pay Cartel’

NursingTimes.net (25.5)

Campbell D (2013)

Hospitals Must Shrink or Shut, doctors Warn

The Guardian 7.4

Kimietowucz Z  (2012)

Hospitals will be able to earn 49% of their income from

private patients from October…/bmj.e4823.full.pdf

Laurance J (2012)

Private hospital told doctors to delay NHS work to boost profits

The Independent 21.

Lintern S (2013)

Foundation Trusts To Start New Bids To Cut Pay Cuts

NursingTimes.net 15.4

McFarlane J (2013)

Freeze on foreign nurses as NHS chiefs admit they have no idea how many lied about qualifications and experience using fake IDs 
Mailonline 10.3

Milne S (2012)

The Problem With Unions is They’re Not Strong Enough

The Guardian 11.9

Publications.parliament.uk (2011)

House of Commons Committee Of Public Accounts Achievement of Foundation Trust Status by NHS Hospital Sixtieth Report of Session 2010-2012

The Stationary Office London 15.12

UNISON (2013)

Seven Reasons Why UNISON IS Opposed to Foundation Trusts

Unison.org.uk March


Further Reading:
Who Owns Care Homes?
The Future of Health Care and Privatisation

Follow WideShut