The existing cap on NHS foundation trusts’ private income has been described as “too restrictive by the director of the NHS Confederation’s foundation trust network.

Monitor, the independent regulator of NHS foundation trusts, has issued a consultation on the interpretation and application of the private income cap. It is currently set at the level of the percentage of their income generated by these activities in the ‘base year’ – 2002-3. Trades union UNISON had threatened Monitor with a judicial review of the practice, unhappy with the not-for-profit bodies being set up by some FTs to circumvent the ruling. The judicial review is on hold pending the consultation.

Unison: wrong interpretation
Unison claim that Monitor's handbook interprets private income too narrowly by implying that only charges and services imposed and delivered by the foundation trust itself count towards the cap. FTs which establish separate entities through which private activities would be channelled. Although the income ends up with the foundation trust - either through a donation or a contract - it does not count as private income.

Unison head of health Karen Jennings said: 'Monitor's manual fails to comply with the Health Act. We believe the manual should state that "private patient income" covers any income arising howsoever from the provision of private services, whether by the foundation trust itself or by the other body.'

Obstacles to Darzi
But Sue Slipman, director of the NHS Confederation’s foundation trust network, has argues in their submission to the consultation that the cap puts serious obstacles in the way of building integrated care services – a major theme of Lord Darzi’s Next Stage review High-quality healthcare for all. Teir submission also suggests that it restricts patient choice y reducing PCTs’ ability to commission new or additional local services, and that it may impinge on FTs’ legal obligations under any future EU cross-border directive on healthcare.

The submission points out the unique unsuitability for mental health trusts, since it is currently set at zero. This leaves the mental health FTs unable to enter back-to-work programmes of the kind the Government is seeking, while non-FT mental health trusts can do so.

Sue Slipman said, “foundation trust income from all sources – including from private patients – is used to benefit NHS patients. The only possible option we could endorse in the consultation is to maintain the status quo.

“Our response makes it clear there is a real danger that altering the patient cap is going to seriously jeopardise our ability to deliver on the government’s policy agenda – be it through Lord Darzi’s next stage review, choice or even the European healthcare directive”.