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Full report: Monitor: Regulating NHS foundation trusts

The health sector regulator Monitor has achieved value for money in regulating NHS foundation trusts, and has generally been effective in helping trusts in difficulty to improve, according to the National Audit Office.

Monitor was created in 2004 as the independent regulator for NHS foundation trusts and its remit has now been expanded with significant, high profile new responsibilities, including that of ensuring continuity of services for patients. Its traditional role of regulating NHS foundation trusts is becoming more challenging as the NHS efficiency drive puts trusts under increasing financial pressure. At the same time, the focus on care quality and effective regulation is greater than ever in the wake of the problems at Mid Staffordshire NHS Foundation Trust.

Today’s report highlights that Monitor has rigorous processes and standards, which it has adapted and strengthened, for assessing NHS trusts applying for foundation trust status. NHS trusts are finding it more challenging to meet the standards Monitor applies during the assessment process, with only two trusts being authorized during 2012-13. At the end of December 2013, 147 trusts had attained foundation trust status, with 98 NHS trusts remaining.

Few NHS foundation trusts have got into difficulty soon after being authorized, indicating that Monitor’s assessment decisions have been sound. Just three trusts have breached their regulatory conditions within 12 months of being authorized. Today’s report warns, however, that the growth in risk in the foundation trust sector may put unsustainable pressure on Monitor’s capacity to regulate trusts in difficulty or to maintain continuity of services. An all-time high of 25 trusts were in breach of their regulatory conditions at 31 December 2013.

Monitor’s interventions have helped trusts in difficulty to improve. It is difficult to assess Monitor’s impact because of the range of influences on a trust and the difficulty of demonstrating what would have happened if the regulator had not taken action. But staff at ‘case study’ trusts told the NAO that they took faster or more effective action, or both, because of Monitor’s interventions than they would otherwise have done.

Monitor’s interventions have worked well where a trust’s underlying issues are internal, such as poor leadership or financial management. Its influence, however, has been less effective where a trust’s problems are down to underlying issues in the local health economy, such as where commissioners are also in financial difficulty. In recent months the regulator has changed how it intervenes in such cases, and has in some instances started working with commissioners, the local authority and the NHS Trust Development Authority to address these wider issues.

“Monitor has done a good job in regulating NHS foundation trusts. Its processes for assessing NHS trusts are robust and its judgments have mostly been sound. It has helped NHS foundation trusts in difficulty to improve and trusts have regularly taken radical action, such as changing their chair or chief executive, in response to Monitor’s interventions.However, bigger challenges lie ahead for Monitor, as it takes on its significant new responsibilities that stretch across the whole health sector. In addition, as Monitor itself recognises, it needs to adapt how it works with other bodies to tackle underlying local weaknesses that increase the risk of individual trusts failing, either clinically or financially.”

Amyas Morse, head of the National Audit Office, 26 February 2014

Notes for Editors

147

NHS foundation trusts at 31 December 2013

25

NHS foundation trusts in breach of their licence at 31 December 2013

£48m

Monitor's budget for core running costs in 2013-14

337

staff employed by Monitor at 31 December 2013

3

NHS foundation trusts breached their regulatory conditions within 12 months of being authorised

16 per cent

of NHS foundation trusts rated at 30 September 2013 as being at highest risk of governance failure

6 per cent

of NHS foundation trusts rated as being at highest risk of financial assessed on their position at quarter two of 2013-14

98

NHS trusts had not achieved foundation trust status at 31 December 2013

Notes for Editors

1. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.

2. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 860 staff. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of almost £1.2 billion in 2012.