Foundation Trusts
How has ONS classified NHS Foundation Trusts
NHS Foundation Trusts will be classified in the public sector as central government bodies. The same classification now applies for NHS Trusts.
NHS Foundation Trusts are a new type of organisation, called a 'public benefit corporation'. They will be established by legislation currently passing through Parliament. This decision is therefore provisional until the legislation is completed, since details may change.
Instead of shareholders, NHS Foundation Trusts will have members. Some control of the trusts will rest with their directors and members, the majority of whom will be from the private sector. This set up has similarities with the model adopted for Network Rail.
However, the trusts’ ability to determine its general corporate policy will be restricted by government's involvement via legislation and regulation. These regulations are many and significant, leaving very little scope for changing the corporate policy of each hospital. The ONS has judged that this involvement is sufficient to determine that the trusts are government controlled.
In these circumstances, it is customary practice for the ONS to use international guidelines to come to this judgement. As in the case of the private sector Network Rail, the classification has been agreed by Eurostat – the body responsible for statistics in the European Union. This agreement is important, as the classification can affect important policy measures such as public sector net borrowing, and the measures used to monitor the Maastricht Treaty protocol on excessive government deficit and debt.
ONS has received information concerning the treatment of NHS Foundation Trusts in other accounting systems used by government and concluded that the respective treatments do not raise questions of apparent inconsistencies between the different systems.
The reclassification of NHS Trusts to central government will require changes to some entries in the National Accounts. These will be introduced at the earliest opportunity in line with the ONS policy on National Accounts revisions. This is expected to be the June 2004 Blue Book.
The ONS has produced a detailed article, giving further explanation of this decision, which can be reached via the link.
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