Ailing hospitals to be taken over by private companies

Managers of failing hospitals will be sacked without big pay-offs and could be replaced by bosses from private firms as the Government plans to tackle under-performing public services.

The moves are a tacit admission by Gordon Brown that, 11 years after Labour came to power, there are still pockets of the public sector that provide unacceptably poor or variable standards of service. He believes they must be eliminated before the Government can "professionalise and personalise" state-funded services.

Alan Johnson, the Health Secretary, will announce today that management teams will replace the bosses of hospitals that perform poorly. In a proposal that will face opposition from traditionalist Labour MPs, the new managers could come from private health companies as well as from nearby NHS trusts.

Mr Johnson will promise there will be "real consequences" for NHS trust managers who fail to enforce rigorous new minimum standards. Those will include limiting the number of MRSA and C.difficile cases. The worst-performing 30 trusts, out of 290 in England, are responsible for 46 per cent of all MRSA cases and 57 per cent of the patients having to wait more than 18 weeks for an operation.

New rules will stop trusts "rewarding failure" by paying huge compensation to sacked managers. That comes after the controversy over Rose Gibb, who stood down as chief executive of the Maidstone and Tunbridge Wells NHS Trust after a report linked poor hygiene standards to an outbreak of C.difficile that caused 90 deaths. She has been offered a £75,000 payoff, half of her salary, but is taking legal action in an attempt to win more.

If trusts fail to improve, a "turnaround plan"will be drawn up for a new management team. Private managers would be under contract to the NHS.

* Charities would be allowed to make substantial profits from running state services under Tory plans to allow them to expand and take on a bigger role, David Cameron announced yesterday. A Tory document said only 12 per cent of charities delivering public services were paid in full and should not be expected to subsidise the taxpayer.