Headlines: November 8th, 2005

NHS trusts wanting to apply for foundation status have been told they will have to “raise their game” to meet new financial diagnostic checks set out by the Department of Health. The new programme will be rolled out to all acute trusts to improve financial management in the health service and to test which potential applicants are ready before they make the transition to foundation status.The Health Secretary, Patricia Hewitt, has also announced that two star acute, specialist and mental health trusts will be able to submit applications for foundation status but they will be expected to meet the same rigorous standards demanded by Monitor, the independent regulator that authorises applications, before any of them can achieve the new status.

Patricia Hewitt said that because the Healthcare Commission was moving to the Annual Healthcheck performance rating system in next year to replace the current star ratings, this was an appropriate time to revisit the entry requirements for foundation trust applicants. Concerns about financial management in some parts of the NHS had also encouraged the Department to develop a new financial diagnostic tool with Monitor.

She said the programme aimed to drive a culture of improved financial management across the NHS and to give trusts a clear indication of any areas that needed improvement before they embarked on the application process. Monitor, she said, decided which trusts received authorisation and the application process would be just as rigorous.

“Trusts will only be successful in their application for foundation status if they raise their game to the current level required by the independent regulator. But with changes in prospect for the Healthcare Commission’s performance rating system we are broadening the base for applicants because the three star requirement is too restrictive,” Patricia Hewitt said. There was no question of lowering the bar or relaxing standards because performance ratings had been used only to identify which trusts should be invited to apply. They were not part of the formal authorisation criteria for foundation status.

“Applicants will have to demonstrate their financial and clinical viability and sustainability as well as their overall capacity and capability to take on additional freedoms and flexibilities in the same way that current NHS Foundation Trusts do,” she added.

Sue Slipman, Director of the Foundation Trust Network which represents the 32 existing NHS Foundation Trusts, said it was looking forward to supporting trusts preparing for foundation status through a range of initiatives to share the learning and successes of the first wave of successful applicants. She saw the new financial health check as a step forward in helping more NHS trusts to change their status.