WIREDGOV

Monitor has announced it is increasing regulatory scrutiny at The Royal National Hospital for Rheumatic Diseases NHS Foundation Trust due to its worsening financial position. The decision is based on the Trust's inability to comply with the following conditions of its authorisation as a foundation trust:

• The general duty to exercise its functions effectively, efficiently and economically.

The Trust has taken steps to reduce its costs and improve efficiency, but is facing significant structural challenges resulting in financial problems many of which  are beyond its immediate control. The Trust is financially challenged due to its small size and the limited number of specialist services it provides. This restricts its opportunities to achieve economies of scale, and makes it more vulnerable to relatively small changes in the number of patients it treats.

Monitor does not believe that actions taken by the Trust alone can address the financial problems therefore a long-term strategy is required. It should be noted that Monitor has not identified any significant governance failing as part of its decision. The Care Quality Commission has no outstanding concerns regarding the quality of patient care at the Trust.

As a result of the decision, Monitor is requiring the Trust to take several actions to address its concerns. These include requiring the Trust to develop and deliver a robust plan that clearly identifies its financial position, and ensuring it secures the funding necessary to support the Trust while it prepares a plan for its chosen strategic option. The Trust will remain under close scrutiny and is required to report to Monitor on a regular basis.

Monitor's Chief Operating Officer, Stephen Hay, said:

"The most important thing for patients is that they have access to the services they need. All trusts face different pressures depending on their local environment and changes in demand for their services. In this case, there is no single cause for the problems, but the relatively small size of the Trust and limited number of specialist services it provides are important factors.  That is why the Trust is focused on delivering a long-term strategy setting out how these services will be provided in the future."

Notes for editors

• For media enquiries please contact Michael Moruzzi on 020 7340 2438
• A copy of Monitor’s decision to find the Trust in significant breach is available here
• More information about how Monitor regulates foundation trusts is available here
• Monitor was established in January 2004. It is independent of government and accountable to Parliament. Monitor’s functions and powers are set out in the National Health Service Act 2006.
• Monitor is now on Twitter - follow us @MonitorUpdate