Foundation Hospitals will have more freedoms

The reforms, the brainchild of Health Secretary Alan Milburn, will give the managers of the best-rated hospital trusts more financial and administrative freedoms.

Although the key legislation to set them up has not yet been passed, ministers expect them to be up and running within a year.

However, the leaders of Unison, which represents thousands of NHS staff, are bitterly opposed to the change, saying that foundation hospitals will create a "two-tier" health service.

On Monday delegates to its annual conference in Harrogate endorsed a motion condemning the policy.

The "so-called freedoms" given to the new hospitals would be at the expense of spending on other parts of the health service, delegates heard.

They are concerned that foundation trusts will be able to "poach" key staff from non-foundation trusts by opting out of the NHS pay system and offering better wages.

Political attack

Foundation hospitals have attracted political opposition within the Labour Party, with 129 MPs signing an Early Day Motion against the reform.

Among the most high profile opponents of the policy is former Health Secretary Frank Dobson, who told the conference the initiative was "in a mess".

He said: "Foundation hospitals will be like a cuckoo in the local NHS, developing their own priorities at the expense of everybody else.

"They will be able to borrow from the private sector and, if they get into a mess, will have to be bailed out at the expense of the rest of the NHS."

Unison's health officer Karen Jennings said Health Secretary Alan Milburn was wrong to be pressing ahead with the plans.

She said: "We will now mobilise opposition to foundation hospitals."

The government says that the extra freedoms offered to foundation trusts, such as the ability to take out loans, will improve health services, making them more accountable to local people.

It insists that there would be no "elitism" within the NHS.

'Phoney reform'

Meanwhile, a think tank has suggested that the shift to foundation hospitals would create "phoney competition" in the NHS.

The independent group Reform suggested that that more radical changes to the structure of the NHS would be needed.

Ruth Richardson, from Reform, said: "Foundation hospitals simply preserve the same structure.

"What you need is a dramatic shift that will put the money into the hands of consumers."