Milburn to cap private work in hospitals

Private practice in every NHS hospital will be restricted for the first time since the health service was created under government plans to persuade Labour MPs of the merits of foundation hospitals.

Alan Milburn, the Secretary of State for Health, has said there will be a strict limit on the use of NHS facilities for private patients if every trust achieves foundation status.

Despite the opposition of some Labour MPs, Tony Blair and Mr Milburn are determined to use foundation hospitals, where high performance will be rewarded with freedom from Whitehall control, to drive up standards.

The use of NHS wards for private practice has been unlimited since the health service was set up in 1948 but has long been a source of resentment in the public sector and the Labour Party. Under a deal driven by Mr Milburn and agreed by the Treasury, each hospital will have its private work capped at its current level.

By underlining the opportunity to cap private patient work across the NHS, the Health Secretary hopes to convince Labour MPs that he has no interest in "privatising" hospitals.

Critics have claimed that because new borrowing freedoms for the foundation trusts will depend on their ability to repay any loans, there will be a new pressure to increase income from private work. But Mr Milburn will try to reassure MPs that the only way a hospital will be able to increase its income is by stepping up public sector work. The more procedures it performs, the more public money it gets and the more it will be able to borrow.

The foundation hospitals Bill is due to be considered shortly by the Cabinet's legislation sub-committee, chaired by Robin Cook, the Leader of the House, and is expected to be introduced to the Commons in the next three weeks.