Foundations are older and wiser, but have they flown the cage yet?

They were the radical edge of Tony Blair’s public sector reforms, born out of the government’s recognition that targets and inspection would deal with the incompetence of the worst public services, but never liberate entrepreneurship and innovation in the best.

Freeing the top performers to fly was seen as the most effective way to stimulate improvement throughout the system.

Foundation trusts were the high-water mark of Blair’s third way; an attempt to prise apart a monolithic state structure with the levers of choice and competition, while holding true to the guiding principle of the NHS - free at the point of need.

Leading a foundation trust is one of the toughest jobs in public sector management. Winning freedom from the grip of the strategic health authority by surviving the Monitor vetting process is just the beginning.

“Winning freedom from the grip of the SHA by surviving the Monitor vetting process is just the beginning”

Emerging on the other side with strong finances, effective governance and sound business planning, foundation trusts find themselves in the oxymoronic world of the managed market, where every player is still feeling its way - experimenting with new freedoms, deploying management skills more commonly found in the private sector, and developing an intimate understanding of the local health economy.

Yet the experiences of the last five years have been merely the birth pains of the new system. A small elite among the new trusts are now exploring the full limits of their potential, with a handful aspiring to be truly world class. This would not have happened if they were still in the grip of the health secretary. On this crucial measure the foundation experiment has succeeded.

And with rare exceptions foundation status has demonstrably driven management quality and ambition.

The challenge for foundation

trusts is to have the courage to exploit their freedoms to the full, taking risks to meet the triple challenges of rising public expectations, contracting funds and changing patterns of healthcare. The challenge for government is to hold its nerve as the recession bites and not wreck the engine driving quality, choice and innovation.