Plan to create 'independent' hospitals

Successful hospitals will be freed from Whitehall control under plans that were being outlined by Health Secretary Alan Milburn today.

In a speech to the New Health Network in London, Mr Milburn is announcing that he intends to extend plans to allow good managers greater autonomy within the NHS to create "foundation hospitals".

Managers of "three star" hospitals will be given the opportunity to set up not­for­profit companies to run their trusts free from government interference.

Although they would continue to be part of the NHS and subjected to national standards and external inspections, managers would otherwise be given complete independence in all other areas, including staff pay and conditions.

In an interview with The Times, Mr Milburn described the NHS as Britain's "last great nationalised industry", in which patients were expected to be grateful for what they received.

"That model is untenable for the 21st century. The NHS has to grow up and be part of this century rather than the last," he said.

Mr Milburn continued: "The job of government should not be to run the system but to oversee it. We want greater community ownership and less state ownership, leading to greater diversity and plurality in local services.

"We must redefine the NHS from a centrally run, monopoly provider of services and give people the freedom to provide better standards of care for NHS patients.

"We now have a clear set of frameworks and standards in place, it is time to let go."

In an acknowledgement that his proposals are unlikely to play well with the health service unions, Mr Milburn said he recognised that his proposals would be "extremely controversial".

But in any other European country the model would be regarded as the norm rather than the exception, he argued.

The proposal for "foundation hospitals", which may require legislation, is also likely to be extended to primary care trusts – the GP­led groups set up to take control of 75 per cent of the NHS budget.

Mr Milburn said the idea came from the chief executives of the best hospitals, who told him that they wanted greater freedom than that proposed under the "earned autonomy" programme set out in the NHS national plan.

Draft proposals are expected to be published within three months.

Dave Prentis, general secretary of the giant Unison union, dismissed Mr Milburn's plans.

Mr Prentis said: "This is another case of the Department of Health being more concerned with a headline in a newspaper than reforming the NHS. It's just another diversion.

"What is needed is more money and investment going into the NHS and the staff who provide the services.

"The Health Secretary talks about freedom for managers. What does that freedom mean? Is it freedom to double their salaries at the patients' expense; freedom to drive down the pay and conditions of staff?"