A matter of trust

The likely introduction of foundation trust status next April  has raised concerns over a ‘them and us’
divide for hospitals, where the elite will be able to poach or attract staff to
the detriment of neighbouring authorities. Quentin Reade reports

Fears that a two-tier national health system will develop have grown after
29 hospital trusts that applied to be awarded foundation status were given the
green light to move on to the next stage.

Foundation status will be awarded to trusts that meet strict performance
criteria, allowing them greater financial autonomy and more freedom to respond
to local demands.

Foundation trusts are expected to be able to set their own rates of pay and
working conditions for staff and offer special incentives and rewards to help
improve patient services.

Health Secretary Alan Milburn has promised that all hospitals will achieve
foundation status in the next four to five years, but opponents are worried
about those trusts left behind.

Drawing away staff

The unions claim the system will cause headaches for trusts not awarded
foundation status as staff head to ‘richer’ and ‘better’ trusts.

Head of health at trade union Unison, Karen Jennings, is concerned that the
development of foundation trusts will create staffing difficulties.

"It doesn’t matter how many times the health secretary says it won’t
create a two-tier health service, he cannot escape from the facts. Foundation
hospitals will act like a magnet, drawing away scarce staff and making
recruitment and retention more difficult for neighbouring hospitals," she

The 29 hospital trusts that applied to become foundation hospitals will have
to pass further tests, demonstrate to Whitehall how the new status will benefit
them, and how they will help nearby hospitals to improve. The trusts will be
awarded foundation status next April, providing parliament gives assent to the
Health and Social Care Bill.

Staff poaching is a potential problem according to Nick Groves, the director
of workforce development at Mid Essex Hospital Services NHS Trust, which has
just seen two neighbouring rivals pass through the preliminary foundation
stage. However, he believes this poaching can be challenged if HR departments
at non-foundation trusts do their jobs properly.

"It is worrying that foundation hospitals could use their financial
clout to attract people in by offering greater salaries, but when we look at
why people leave, and why staff are attracted [to us], actually the salary is
not the biggest part," he said.

"It’s a contributing factor and it’s certainly a reason people will
quote if they are generally unhappy. But research shows that if staff are happy
with other things, their assessment of how important salary is to them goes
down," he added.

Groves is confident that his trust will continue to attract and retain staff
even though it is not currently in line to become a foundation hospital.

"[This can be done] by offering a whole lot of other things, making it
a great place to work, providing supportive managers and flexible
working," he said. "That will be more important to people than a bit
of extra money."

Advocates of foundation status argue it will allow hospitals to offer more
competitive rates of pay to suit a particular regional labour market.

Positive effect

Christine Tolond, HR director at Peterborough Hospitals NHS Trust – on
target to be awarded Foundation status, said the change will allow trusts far
more freedom to respond to local pay demands, while remaining within the NHS

She is positive about the move, and believes the majority of other trusts
are too. "It’s the way forward," she said. "We can’t best be
governed from Whitehall. There is nothing to be lost and everything to be

Under government proposals, foundation trusts will be able to keep the
proceeds raised from the sale of assets and land. They will also be able to
re-invest operating services surpluses and borrow money on the open market.

In addition, they will be much more accountable to the local community, with
patients being able to vote for and stand for election to new boards of
governors, which will set out the trust’s goals and priorities.

NHS HR director Andrew Foster told Personnel Today that while he could understand
concerns that the creation of foundation hospitals could create a two-tier
health service, the fears are unfounded because eventually every hospital would
be granted foundation status. "This approach is a process intended to
raise everybody’s standards. Eventually, foundation trusts will be the
model," he said.

However, Foster did concede that those without such status may find it
harder to recruit. He said the NHS will be operating a series of systems to try
and minimise the effect. "I think it is inescapable that if hospital A is
super-duper and hospital B is said to be struggling a bit, then a nurse looking
for a job will be more attracted to hospital A.

"We can manage that to some extent by requiring local employers to
co-operate with each other. We would make sure you would not have prices
(salaries) going up against each other."


Health minister John Hutton also tried to play down concerns. He said a
regulator would stop unfair poaching and limit local pay flexibility to amounts
agreed with the unions.

The foundation scheme has been welcomed by the Association of Healthcare
Human Resource Management (AHHRM), which believes it will provide a real
opportunity for HR professionals working in the NHS.

AHHRM president Elaine Way believes the scheme will give HR professionals
greater autonomy to be creative and make a difference. "Our understanding
is that all managers in foundation trusts – including HR directors – will be
much freer from central direction or guidance," she said.

"However, although they will be able to use these freedoms to be
innovative, they must act within the overall NHS ethos of being a good employer
and involving staff in decision-making – an approach AHHRM supports and

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