Despite opposition from within his own party, Tony Blair is vowing to push ahead with hospital reform. STEPHEN LEWIS speaks to York Hospital's new chief executive Jim Easton about what foundation status would entail.

TONY Blair has just been given a bloody nose over foundation hospitals. He may have been the unexpected darling of the Labour Party conference after his barnstorming leader's speech, but that didn't stop him losing a conference vote on the issue. Labour activists appear to share the popular suspicion that Mr Blair in the business of creating a two-tier health service.

He will still push the reforms through. He told us he doesn't have a reverse gear after all. And just as he's not for turning, so public distrust about the whole thing has not managed to deter health bosses at York Hospital from pushing ahead with an application for foundation status.

Jim Easton, the hospital's new chief executive, refuses to be drawn into saying outright that he's a supporter of foundation hospitals. The application is only preliminary, he stresses. If the hospital's application is approved - which is likely, because of its consistent performance in meeting Government targets - local people will be consulted before any final decision is made.

That note of caution aside, he's clearly an enthusiast. Which, given his background, is not surprising.

At 39, Mr Easton is young to be shouldering the burden running of a major hospital. He has the slightly cheeky, puckish face of an Ian Hislop - and appears refreshingly open and approachable, if understandably a little cautious in talking to the media so early into his new job.

His CV is impressive. He has worked in the NHS for 16 years, joining as a junior clerical staff, and doing a range of administrative jobs in everything from primary care to hospitals and mental health.

Most recently, he worked as a senior civil servant with the Department of Health, where he was essentially responsible for NHS modernisation in the north of England.

Modernisation? His face looks a little pained. "Oh no, what a thing to say to the media...!" he groans.

He may be reluctant to be labelled as an out-and-out moderniser, but it is clear that he thinks foundation status could bring benefits.

He identifies three. Foundation status would give local people a greater voice in the running of the hospital, he says. It would unlock access to private funding for much-needed redevelopment. And it would make it easier for the hospital to recruit and retain quality staff.

Private funding? Competition for staff? Doesn't it all sound a bit like privatisation by the back door? Not at all, says Mr Easton - and launches into what amounts to a passionate defence of the Government's plans.

Foundation hospitals will still be part of the NHS, he stresses, and committed to everything that entails.

"This is not some kind of divorce from the NHS family. We would not be independent. We would be interdependent, with family doctors, with our neighbouring hospitals in Harrogate, Scarborough and Leeds. We would not, as a foundation trust, be in competition to take staff from those other institutions."

What would foundation status involve, then? Firstly, he says, the hospital would effectively be taken out of Whitehall control and into the 'ownership' of the local community. It is too early to be precise about how that would work, but he envisages local people paying a nominal joining fee - perhaps £1 - to become a member of the York Hospital Foundation Trust.

The membership would then appoint a board to run the trust, which would in turn appoint a chairman and chief executive. The great benefit about such a system, he says, is that it would make the hospital more accountable to and responsive towards the local community.

"I would place my trust in the community of York and Selby more than Whitehall to guide the future of this hospital," he says.

Membership would probably be restricted to those who lived in the hospital's catchment area; but apart from that, there would be no limit on numbers. The more members the better. "This is about creating a real sense of community engagement," he says.

And would hospital members get priority treatment over non-members? Absolutely not. Membership would be more a responsibility - about taking a role in shaping the hospital's future. But the hospital would remain committed to providing the best care possible to whoever walked through its doors.

As it should and must. So what about this business of 'unlocking' access to private cash? Wouldn't there be a danger of the hospital getting itself in hock to the private sector?

He doesn't think so. Foundation trusts would still be regulated, to make sure they didn't borrow unwisely. But at least they would have access to funds for much-needed development.

York hospital has done well in the past couple of years, he says, securing something like £14 million for improvements such as the new eye unit and reception area. But hospitals are always competing for a limited pot of NHS cash - and because of its success in the oast few years, York may find itself at the back of the queue if it asks for more money, for example to upgrade the hospital's wards.

Being able to access private cash may speed up such improvements. The money would have to be paid back - but then so, in effect, does money borrowed from the public sector, through capital charges.

It is cheaper to borrow from the public sector; but to balance that, there are constraints. It is a difficult equation, but as a foundation hospital, the opportunity would at least be there.

"I'm not saying we would get x-million pounds," he says. "But it would open up more opportunity for us to do some of the work that is vitally important."

All well and good for York hospital. Few people would argue that, excellent as the quality of care may be, some of the wards have seen better days. But what about those accusations that foundation hospitals would undermine the NHS by creating a two-tier health service, the foundations and the rest?

To be honest, he says, there are a multitude of tiers in the NHS already. In his last job he had to travel a lot.

"And if I had had an accident in different parts of the country, I would have received different standards of care." That is even true with, for example, cancer services, he says.

What the Government reforms aim to do, he insists, is first set guaranteed standards of care, across a range of measures, that every NHS patient should be able to expect regardless of where they live.

Foundation hospitals would then simply have a chance to exceed those standards. "We would have the flexibility to build on that and try to develop areas of excellence," he says. "I have no problems with that."

Updated: 09:24 Thursday, October 02, 2003