The failure of a failure regime: from insolvency to de-authorisation for NHS Foundation Trusts

This paper examines the failure of a ‘failure regime’ for NHS Foundation Trusts. More particularly, it considers the proposals to create a failure regime for NHS Foundation Trusts that were set out in the Health and Social Care Act 2003, and that drew explicitly on the Insolvency Act 1986. These proposals were subsequently abandoned in favour of a regime based on a notion of ‘de-authorisation’. This case is of considerable interest, as the category of failure has come to saturate public life, while the ideas and instruments for conceptualising and calculating failure have not received the attention they deserve. This paper suggests that failing and failure do not have the objectivity and inevitability often associated with them, and that both are formed out of a set of calculative practices and financial norms that allow complex processes of mediation between domains and desired outcomes. It is important, we argue, to analyse the roles played by metrics such as ratio analysis and risk indexes, for it is through these that this mediation takes place. It is important also, we suggest, to explore that happens when attempts are made to model ‘failure regimes’ for public services on ideas and instruments designed for the corporate world. Further, we argue that it is important to examine the co-creation of new entities, and of the failure regimes for regulating those entities. We suggest that the case examined here has implications that go beyond the domain of healthcare, and that it highlights important issues concerning the role that ‘exit’ models can play in the regulation of public services. 1 This paper was initially written for the CARR/Score Workshop, ‘Organizing, Shaping and Creating Markets’, Stockholm Centre for Organizational Research, Stockholm, 16-17 April 2010. The work conducted for this Discussion Paper was part of the programme of the ESRC Centre for Analysis of Risk and Regulation. The authors wish to thank the three anonymous reviewers, Andrea Mennicken and Mike Power for their comments and encouragement with this project.