Health Bill will force hospitals to undergo 'Ofsted-style' inspections

Ther health service inspectorate is to be given new powers to hold failing hospitals to account and to publish an annual report on the "state of the NHS" which could prove embarrassing for ministers.

A new NHS Reform Bill, to be published today, will give the Commission for Health Improvement (CHI) the same status as Ofsted, the high-profile watchdog which inspects the nation's schools.

The commission, set up by Labour to inspect the nation's hospitals and root out bad practice, will be given full independence under the proposals.

It will also produce a no-holds-barred account of the strengths and failings of the NHS in England and Wales to which ministers must respond.

The document, which will be laid before Parliament, is bound to include criticisms which are politically uncomfortable for ministers as well as details of where performance has improved.

Alan Milburn, the Health Secretary, who will unveil the proposals today, is expected to emphasis that CHI will not be constrained about what it can say. "CHI can say what it wants to say. We want the report to tell the truth ... about the NHS," a source said.

The first report, which is expected next year, will help bolster the role of CHI as an "independent and authoritative voice" of performance in the NHS.

CHI's 14 commissioners will gain the right to appoint their own chief executive instead of ministers making appointments.

Instead of simply reporting the findings of its inspections, the watchdog will have the power to put substandard hospitals on "special measures" and check that they make a range improvements.

CHI will also be responsible for assessing whether hospitals are rated from nought to three under a new star rating system which will be published each year.