It is easier to increase autonomy for public hospitals than to increase local accountability. Hospital managers are likely to be interested in making decisions with less central government control, whilst mechanisms for local accountability are notoriously difficult to design and operate. Further consideration of internal governance of FTs is needed. In a deteriorating financial climate, FTs should be better placed to make savings, due to their more business-like practices.
New governance arrangements for NHS Foundation Trusts (FTs) aimed to replace centralized state ownership of acute English hospitals with a new form of social ownership. Under this, trusts would exist as independent public interest organizations on the model of mutuals and co‐operative societies. Assessing the impact of the new arrangements on the management structure of four acute hospitals, we demonstrate that FTs have failed to deliver social ownership and local accountability on this model. We suggest that policy‐makers should re‐frame the governance apparatus associated with mutualism and social ownership in terms of the concept of meta‐regulation. By re‐framing governors as meta‐regulators, regulatory institutions would acquire new powers to steer FTs towards sustainable forms of compliance via non‐coercive, non‐intrusive means.
In addition to introducing markets and market-like structures into public services, New Labour wished to promote the involvement of users and the public in decision-making in other ways than as individual consumers. One way was to involve the public in the governance of organizations. This could be done by removing public services from state control, and transferring them to mutual ownership; or by increasing public involvement in the governance of public bodies. NHS foundation trusts (FTs) were presented as mutuals. Our study shows FTs are not mutuals, as they continue to be owned by the state. Moreover, staff of FTs were generally not engaging with the new governance structures. In general, there was mixed experience of the new structures enabling governors to increase accountability of the hospitals to the public. On the other hand, having a membership did enhance the legitimacy of FTs, as opposed to other NHS organizations. The findings of the study are of current interest as the coalition government is continuing with the policy of FTs, and also encouraging mutuals and other forms of public involvement.
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