News Roundup [abridged Versions Appear In The Paper Journal]

Foundation trusts turn in strong financial performance

BMJ 2006; 332 doi: (Published 23 March 2006) Cite this as: BMJ 2006;332:686
  1. Adrian O'Dowd
  1. London

    England's foundation trusts are generating major cash surpluses for reinvesting in care of patients at a time when the NHS overall is struggling financially, says a report by an independent body.

    Monitor, the independent regulator of foundation trusts, has given these NHS organisations, which have greater financial and operational freedom than other trusts, a clean bill of health for their finances, in a new report of their performance in the nine months to December 2005.

    However, one foundation trust—University College London Hospitals NHS Foundation Trust—is causing concern and was the only one of the 32 foundation trusts to have a deficit. Its board, overseen by Monitor, is currently implementing a plan for financial recovery and is in discussions with Monitor about how to turn around its £29.4m (€42.3m; $51.6m) deficit.

    Monitor's report says that foundation trusts had an aggregate deficit of £9m on a total income of £5bn, but if University College London Hospitals was removed from calculations, the remaining 31 trusts generated a £20m surplus over the nine months.

    Several NHS foundation trusts have generated “significant surpluses,” says the report. As public benefit corporations, surpluses are used to fund improvements in services.

    Monitor says it has been told by some NHS foundation trusts that strategic health authorities and primary care trusts have used the surpluses as a reason to claw money back from successful NHS foundation trusts. This behaviour, says the report, undermines the incentives that the system is designed to generate.

    William Moyes, chairman of Monitor, said: “The performance of the foundation trusts offers clear pointers for the whole of the NHS. The current reform programme, particularly patient choice and payment by results, requires providers to be financially strong, well managed, and responsive to patients and commissioners. NHS foundation trusts are meeting these criteria.”

    The NHS is expected to run up an as yet unconfirmed deficit of £750m for 2005-6, and the report says that a number of foundation trusts are voicing concerns about the ability and willingness of primary care trusts to pay for contracted activity. It is therefore possible that foundation trusts will be forced to make provision for potential non-payment for some activity, it warns.

    Sue Slipman, director of the Foundation Trust Network, which represents all 32 existing foundation trusts and 10 trusts preparing for foundation status, welcomed the report.

    “This financial rigour is enabling foundation trusts to focus their efforts on improving patient care, with a number of organisations generating surpluses to reinvest in new and better services for local communities,” said Ms Slipman.

    “The challenge now is to ensure this foundation trust success story is not stopped in its tracks. We need government to stand firm in support of a transparent, rules based system which requires all organisations to operate on a business-like basis.”

    NHS Foundation Trusts—Nine-Month Report for Period 1 April 2005 to 31 December 2005 is available at

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