Most foundation trusts are now limited to a private income of about 2%.
The foundation trusts must create an elected board including representatives from the local community to oversee their work.
In 2002, Labour created foundation trusts to run hospitals.
The hospital was one of the first Foundation Trusts and is generally considered to be of a high quality.
Monitor, which regulates foundation trusts, has also produced a critical report into corporate governance.
It was established in 2004 to authorise foundation trusts and is directly accountable to Parliament.
If satisfied that certain criteria are met, it authorises them to operate as foundation trusts.
The plan to close the Foundation Trust is in contrast to most large charitable foundations that have no set closure date.
Every hospital to become a foundation trust.
The initial promising results were thus not repeated by all the other trusts which eventually were given permission to become a foundation trust.
