Image caption There are concerns about a two-tier NHS

NHS hospitals in England will be free to use almost half their hospital beds and theatre time for private patients under government plans.

A recent revision to the ongoing health bill will allow foundation hospitals to raise 49% of funds through non-NHS work if the bill gets through Parliament.

Most foundation trusts are now limited to a private income of about 2%.

The Health Secretary says the move will benefit NHS patients but Labour claimed it could lead to longer waiting lists.

The amendment to a clause of the Health and Social Care Bill was made shortly before Christmas by Health Minister Earl Howe.

Commenting on the move, Health Secretary Andrew Lansley said lifting the private income cap for foundation hospitals would directly benefit NHS patients.

Health and Social Care Bill Introduced into Parliament on 19 January 2011

Main theme is to change commissioning of NHS services, giving GPs more control of the NHS budget

Concerns led to a Government 'listening exercise' in the summer

The bill then progressed through the House of Commons

Further examination of the bill is to take place in the House of Lords in 2012

"If these hospitals earn additional income from private work that means there will be more money available to invest in NHS services," he said in a statement.

"Furthermore services for NHS patients will be safeguarded because foundation hospitals' core legal duty will be to care for them."

But Labour's shadow Health Secretary Andy Burnham claimed the move could mean longer waits for NHS patients.

He said: "This surprise move, sneaked out just before Christmas, is the clearest sign yet of David Cameron's determination to turn our precious NHS into a US-style commercial system, where hospitals are more interested in profits than people.

"With NHS hospitals able to devote half of their beds to private patients, people will begin to see how our hospitals will never be the same again if Cameron's Health Bill gets through Parliament."

Critical services

A cap on the amount of income hospitals can raise from private patients was put in place by Labour in 2003, amid political controversy over the setting up of foundation hospitals, which have more freedom to decide how their services are run. All NHS hospitals are set to become foundation hospitals by 2014.

...the Government has consistently assured us that the NHS is safe in their hands, but if allowed to go ahead, the removal of the cap could lead to the fundamental erosion of key NHS principles Dr Peter Carter, RCN

The cap has prevented hospitals from expanding their private work beyond the proportion earned in 2002. It varies from hospital to hospital, but is limited to about 2% in most hospitals.

In a small number of specialist hospitals, such as the Royal Marsden, the limit is set much higher, at around 30%. Health secretary Andrew Lansley has long said he will abolish the cap but it has been unclear how much private work would be allowed.

Proponents of the move have pointed out that the Royal Marsden is rated one of the best NHS providers while taking up to around a third of its income from private activity.

But critics are concerned that NHS patients would get a poor deal under the proposals, as foundation trusts with large financial deficits seek to take on more private work.

Dr Peter Carter, chief executive and general secretary of the Royal College of Nursing (RCN), said it was "a seriously worrying development".

"At a time when the health service has to make significant efficiency savings, it is only natural, that given the option, providers will look to maximise their income through private patients," he said.

"This will undoubtedly lead to a situation whereby those who can afford to pay will get faster access to better treatment, with increased waiting times and a decrease in quality for NHS patients."

He said existing NHS providers could be left to deliver critical services, which are the most expensive and challenging to run.

He added: "Really, it doesn't get much more serious than this; the Government has consistently assured us that the NHS is safe in their hands, but if allowed to go ahead, the removal of the cap could lead to the fundamental erosion of key NHS principles.

"The very heart of these principles being that access to care should be on the basis of clinical need, regardless of ability to pay."

Dual role

But the chief executive of the health thinktank, the King's Fund, Chris Ham said hospitals had generated funds from private patients for many years, and it was possible to provide high quality care to both NHS and private patients in the same hospital.

"The cap is only a significant consideration for a minority of hospitals," he said.

"These hospitals should report annually on how they are ensuring NHS patients do not lose out if the cap is either removed or at a relatively high proportion of income."