Foundation Trust AGM

I attended a session of the Swindon & Marlborough NHS Foundation Trust AGM last night. The FT was launched at the end of last year as part of the government “health market” in which “independent” Trusts compete with each other, and private companies, for patients. The Chair of the Trust and the Chief Executive spoke of “difficult times ahead”, expecting cutbacks in funding. They thought, however, that there were advantages in FT status, the most important of which, they said, is that they are accountable to us as members rather than to NHS bureaucrats. “Difficult decisions” would have to be made, but would be done “in consultation with our governors and our members”.

One of the consequences of “independence” as a FT was that they would not be able to turn to the government for money if they got into difficulties. The Trust had, therefore, to set up an overdraft facility in case they did.

The Financial Director reported on the fact that 90% of bills were paid within 90 days, and said that there was a move towards payment within 10 days, a directive from the Department of Health. In the discussion which followed the presentations a member commented that paying the bills in 10 days “doesn’t make business sense”. They should keep it to 30.

Picking up on this, I made the observation that that this raised the fundamental contradiction at the heart of the government’s system, with its ‘health market’, and trusts “competing for patients”. Was it to act in its own interests, regardless of the consequences for other organisations, or should it act as “part of the NHS family” (in the words of the Chair). Would competition over-ride cooperation? The Trust would have to struggle with this contradiction over the next period. I said I hoped that acting as part of “the NHS family” would dominate over the drive for surpluses.

In responding to my comments (and a question about the arrangements for the overdraft facility) the Financial Director informed us that they had a 2 year deal with a bank which cost £100,000. For this they would have available for use an overdraft facility of £13 million. Should they have to draw on it the rate of interest would be slightly below the LIBOR(inter-bank lending rate).

Of course, if they did not need to draw on it then they would have spent £100,000 for nothing (my words, not hers); money which would have otherwise been available for services.

The Chair expressed his view that their first responsibility was to the patients. So long as this Board remained in place then that would remain the case. He compared the position of an FT with that of a Co-op; the “dividend” was the service to the patients. An FT was a “public benefit corporation” which could only use the surplus for improving services, though he thought that “the discipline of being more business-like” was probably to our advantage.

The chief executive expressed her concern about the future of the NHS. She said she thought we were going to face very difficult times in the next six years. She thought that the only way “we are going to survive” is working together with other NHS providers. “We want to work in the spirit of the NHS.”

The Great Western Hospital in Swindon is probably in a better position than hospitals in metropolitan areas where there is a greater chance of losing work because there are more hospitals to compete. Even so, we were informed that the trust would lose around £2 million of work diverted to an ISTC.

So far as accountability is concerned, the fact is that neither members nor governors have real power. We were told that the governors and the Board had developed a good working relationship. Yet it is a fact that constitutionally and practically executive power rests with the Board. The real test of accountability will come if and when there is a significant disagreement between the Board and the governors. So far as accountability to the members is concerned the current structures are inadequate. A 2 hour AGM in which presentations last more than an hour provides insufficient time for a serious discussion as opposed to questions from the members and answers from the top table.

Likewise the members’ meetings – at least the one I have attended – took up too much time with presentations and too little for discussion. There were plenty of critical comments, but the whole affair was too rushed.

I don’t say that this has been done by design. But the test of accountability lies in the ability to stop a decision before it has been taken, rather than to criticise after the event. The structures set up in promise of accountability will be severely tested in the face of a financial crisis and “difficult choices” which may impact on the service provided.