2nd opinion: No solid foundation

On 1 July, a second wave of hospitals acquired “foundation” status, among them Sheffield’s Northern General and its related units. My eye was caught by remarks made by the trust chief executive.

Now was the time, as one of the city’s largest single employers, he said, for Sheffield Teaching Hospitals to begin to grapple with the South Yorkshire regeneration agenda.

The foundation trusts – Sunderland, Homerton, Bradford and Doncaster – are situated in disadvantaged areas, so maybe hospitals can take on a leading role in urban renewal.

But it is likely to be realised at a private sector price. Foundation hospitals haven’t been “privatised” but their boundary with the private sector is expected to be open and fluid; they could act, in some run-down areas, as a magnet for private capital into new diagnostic units, for example.

Some fear that jeopardises the principles of the NHS. It’s conceivable these newly autonomous hospitals will become more active players in urban property markets. They have new freedoms to borrow in the capital markets and may seek accommodation for clinical and ancillary staff near to base. That could mean opportunities for registered social landlords, many of which already have links with the NHS.

But there’s an emerging problem. The rhetoric surrounding foundation trusts is all about choice, autonomy and “a dynamic, market-oriented vision of change”. To some people that means less of the “social”, as in social housing, and more of the private, as in owner occupation and upscale renting.

To ask what that might mean for RSLs is to pose a far-from-new question, which the National Housing Federation has been seeking to answer. But it’s still one that cuts to a fundamental point, to do with the balance between public and private interest and finance in the make-up of RSLs and the related balance between rental and sale housing.

I’ve cheated a bit. That phrase about a market-oriented vision of change comes from a speech last week at the Joseph Rowntree Foundation’s centenary bash given by Bruce Katz, an American guru on neighbourhood renewal. Chancellor Gordon Brown, who also spoke at the event, likes that kind of talk.

Katz, who is a vice-president of the prestigious Brookings Institution in Washington DC, wasn’t thinking about health so much as a formula for lifting poor neighbourhoods out of difficulty.

The lesson from the USA was centred around the extent to which private sector investors are funders of affordable housing, managers of mixed-income developments, and owners of businesses employing neighbourhood residents.

These broader, market-oriented relationships, Katz concluded, are the most important measure of success for neighbourhood interventions.

Katz was addressing regeneration, not specifically housing, but you could make a number of quick inferences from what he said about the need to break up single-tenure estates and even subsidised acquisition of rental property.

Gordon Brown prefers American gurus to any other kind; you will rarely hear him listening to experts on city life or social housing in Europe. The Katz formula appeals. Were he to become Labour leader, assuming Labour wins the next election, there would probably be an intensification of the existing focus within urban policy on market solutions, albeit under the cover of “public-private partnerships”.