First 10 foundation hospitals announced

The first hospitals to be granted foundation status - allowing them to be run like businesses with freedom from government control - were announced today.

Out of 12 hospital trusts shortlisted, 10 have been successful including four in the South-East: Moorfields Eye Hospital, Homerton University Hospital, The Royal Marsden, and Basildon and Thurrock University Hospitals Trust.

Immediate plans to improve services include the creation of the world's biggest children's eye centre at Moorfields, and the replacement of radiotherapy equipment at The Royal Marsden.

Only trusts with the highest rating of three stars were allowed to apply for foundation status, which gives them more independence to set their own budgets, buy services from the private sector and borrow money.

They are answerable to local representatives and will be monitored by an independent regulator instead of the Department of Health, but they remain within the NHS.

The first trusts were chosen by the independent regulator. More will be announced in July.

Critics of the scheme say it will lead to a two-tier NHS, with the best performing trusts keeping money they save, leaving those who really need cash to go without. But supporters say foundation hospitals will ensure services are provided efficiently and reduce waiting lists.

The chairman of the regulating body, Bill Moyes, said: "The hospitals will have to deliver on national priorities, reduce waiting times and tackle big killers like coronary heart disease and cancers, but they will have freedom to manage themselves and respond to local health needs."

He said foundation hospitals will be expected to operate more like businesses.

Ian Balmer, chief executive of Moorfields, said foundation status would enable the children's centre to be ready by 2006.