I have already indicated that piloting is unnecessary and unacceptable. Piloting would not achieve the radical and comprehensive reform that is required to deliver the freedoms and local accountability central to the Government's policy.
Interestingly enough, the chairman of the Audit Commission does not seem to agree with the noble Lord, Lord Clement-Jones. I quote briefly from a piece in his name in the Health Service Journal on 9th October. He stated:
"In Bournemouth, I said the often ill-informed debate about foundation trusts (but certainly not the policy) was a red herring—a distraction from the challenge of improving the NHS by devolving power to the front line. The Audit Commission supports the principle of foundation trusts because they would be part of a more locally owned and managed service which would, in turn, be more responsive to the community and the individuals it serves".
There is more, but I am sure that the noble Lord will be able to check the source in the Health Service Journal of 9th October.
Clearly, we will learn from the experience of the first wave applications. Many of the characteristics of piloting will be evident in the rollout of NHS foundation trust status. For example, the sourcebooks on governance, HR, finance and so on are not static documents and will be updated as we gain experience of the process. I have already given a commitment that we will ask the regulator to conduct a review of governance arrangements in the light of first wave experience.
The amendment allows only seven NHS foundation trusts to be established in the next two years, which would considerably increase the risk that a two-tier system would be created within the health service. That is quite unacceptable to the Government. We want NHS foundation trusts to be a policy for the many not the few—noble Lords may have heard that phrase before. Eligibility for NHS foundation trust status should be based on merit, as we have repeatedly said. As hospitals improve and gain the skills that they need to operate as an NHS foundation trust they should be able to apply for NHS foundation trust status and move quickly to it.
On our first day in Committee, I explained that by the end of 2004, if all current applicants for NHS foundation trust status are successful, well over 25 per cent of the population of England will be able to benefit from trusts that are NHS foundation trusts, and will be eligible to participate in the governance arrangements of at least one NHS foundation trust. Only a fraction of that number would be included if a pilot scheme were adopted on the basis proposed by the noble Lord. We should not exclude all those people from benefiting from the devolution of power and the real opportunities to participate in the governance of their local hospital that come with NHS foundation trusts status, simply because of an arbitrary cap on numbers as part of a pilot scheme.
The noble Lord's proposal would choke off all those coming forward, such as mental health trusts. Many of the 80 mental health trusts would be able to apply for NHS foundation trust status, as applicants in 2004–5. We are already talking to some of those mental health trusts—they want to know more about the process. The amendment would break the considerable momentum to become NHS foundation trusts. I know that the noble Lord likes to present the process as a steamroller being driven from Richmond House, but he overestimates our capacity to dragoon all those people into coming forward.
Many people, even as we speak, are considering their options. There is a real momentum, and we do not want to disappoint the growing numbers of local people who want to move in that direction and have local freedoms and the involvement that it provides. The amendment is progress halting, and certainly does not seem to capture the support of the chairman of the Audit Commission.