Laying the foundation for business in the NHS

4 July 2002

UK: At the the end of May the Secretary State for Health announced plans to allow best performing (three star) NHS trusts to apply for foundation status and run as not for profit businesses from April 2003.

Alan Milburn's proposals were widely covered. The Independent on May 22 reported that such trusts would have to conform to NHS standards and be subject to inspections, but they would be able to borrow money from the commercial markets, set up joint venture companies and keep proceeds from selling land.

With laundry services seemingly back on the NHS agenda in general LCN conducted a brief straw poll of personal views as to see how any changes in funding for these trusts might impact on laundry services.

At Kettering General Hospital, board member and director of facilities James Hayward's personal view was that the quality of laundry services in any hospital (foundation status or not) should be the same, first class. Good quality clean linen can make a difference to the patients' experience.

More choice

The full implications of the proposals situation were not yet clear, but Mr Hayward thought that foundation hospitals might have more choice on the way linen services are provided and the conferring of foundation status could encourage more partnerships.

"At Kettering General we are part of the largest linen consortium in the country. We pride ourselves on the high quality of the linen." But this has been at a cost and has meant investing in good management and a good specification.

"As a consortium, we work together. All laundry is contracted out. There are about eight trusts in the consortium. We have one common spec and one price structure. We employ a person to manage the contract and have pool linen so all trusts share the same linen."

He believed that hospitals shouldn't wait for foundation status before pursuing this route.

Investor in service

"As a consortium we're a big investor in the laundry service and can have an input into the quality."

Would Kettering want to become a foundation hospital? "We're currently a two-star hospital and working to become a three-star in the next 12 months. We would then review the criteria and the benefits of being a foundation hospital."

A broader view of the long-term implications came from another informed source within the linen services sector.

The ability to set up joint venture companies and keep profits from selling land could have a significant effect in the long term.

  More freedom

"The shortage of finance has meant that we operate on the basis of using the available funding, so the freedom allowed to foundation status could make a difference," said this source. However, they thought that changes would not impact for some years.

"The NHS is slow, so I don't expect it make to any difference to any trust in the immediate future. In the medium term it could, given the developing national concern about the acute shortage of laundry provision and its effect on contingency planning." Although far too early to form a subjective view, the proposals held potential for trusts to take a different view on available funding.

Asked specifically about suggestions that foundation hospitals might be able to sell off land for profit and whether this could have a negative impact on in-house provision, John Duffy, operations manager at East Kent took a slightly different angle, pointing out that the stage of selling of sites was largely passed.

Laundries are coming on to the NHS agenda, so they are not as vulnerable now as they used to be.

The pressure now is from the drive for beds in acute hospitals (where in house laundries are often sited), and their search for more space for clinical services.

Paul Gibson, linen services manager at the Royal Bolton hospital, agreed that the stage of selling off of land had largely passed. His own view was that foundation status would make a difference for the hospital concerned rather than the laundry. But it could mean more local decision making. In-house laundries have to compete with medical colleagues for funding. The medics usually win. However, more freedom to make capital investment decisions locally could work in laundries' favour.

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