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Review of foundation trusts’ plans suggests challenging period ahead
NHS foundation trusts have identified the key challenges they will need to meet in a new report published today by Monitor, the independent regulator. In the Review of NHS Foundation Trust Annual Plans 2011/12, Monitor highlights the key issues and trends that it has identified in the plans submitted by individual foundation trusts.
The plans reveal that foundation trusts are facing their most challenging period with an increase in pressure across the sector, although Monitor believes this is to be expected given the tough financial climate. Particular challenges come from the need to deliver significant savings year on year while improving the quality of care, and the need to integrate successfully large numbers of community services transactions.
Monitor requires foundation trusts to produce realistic plans, based on discussions with their commissioners, to help them identify potential challenges and ensure the needs of patients are met. Each plan contains a financial forecast for the next three years and a one year assessment of governance risk, which reflects the overall effectiveness of an NHS foundation trust's leadership.
The 2011/12 Review of Annual Plans reveals:
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an increase in the number of foundation trusts forecasting the lowest financial risk ratings (FRR), with 11 forecasting an FRR of 1 or 2 at the year end (a rating of ‘1’ is highest risk and ‘5’ is lowest risk). This compares with four in the 2010/11 annual plans;
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foundation trusts are planning to deliver cost improvement plans of 4.4% in 2011/12 and similar levels during the following two years;
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income growth of 7.5% is forecast in 2011/12 as a result of Transforming Community Services (TCS) transactions. However, from 2012 onwards income is forecast to decline by around 1% per year for the following two years;
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following intensive TCS transactions activity across the foundation trust sector in 2010/11, 53 foundation trusts are integrating community services in 2011/12, with 31 significant transactions and 22 smaller transactions. This could result in a potential increase in financial and governance risk as services are integrated;
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57 foundation trusts forecast a governance risk rating of amber-red (27) or amber-green (30), this compares with 31 in the 2010/11 annual plans; and
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of the ten foundation trusts currently in significant breach, three are forecasting a return to full compliance in 2011/12.
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Commenting on the report, Monitor’s Chair, Dr David Bennett, said:
"The challenge of reducing costs must be met, but it is essential that good patient care is at the heart of this. This year we have put extra focus on identifying the potential risks to quality that could result from each trust’s plan.
"The evidence we have seen in foundation trusts’ plans suggests they are not planning to make savings by treating fewer patients or reducing the level of care for patients. Instead they plan to make them through more efficient working on the front line and by reducing administrative or clerical costs. We are very clear with foundation trusts that savings cannot be made by compromising on quality.
"In my discussions with foundation trust leaders they are telling me that they anticipate the need for more radical service redesign, whether within their own organisations or across health economies. Where this is evidence-based and clinically appropriate, it can be an important way of delivering better quality patient care, for example, by moving services to newer facilities, and also achieving the objective of improving efficiency in the NHS."
Notes
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For media enquiries contact Michael Moruzzi: michael.moruzzi@monitor-nhsft.gov.uk or 020 7340 2438
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Monitor authorises and regulates NHS foundation trusts ensuring they are well-managed and financially viable in order to deliver high quality healthcare for patients.
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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.
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