WIREDGOV

On October 1, changes to the way the cap on the private patient income of NHS foundation trusts is enforced came into operation as a result of the Health and Social Care Act 2012. Monitor has written to the chairs and chief executives of each of the 144 foundation trusts in England outlining how these new arrangements will affect them.

In the past the limit on the amount of income that foundation trusts could earn from private patient work had to be set out in the terms of authorisation issued to each organisation by Monitor. From now on, the limit is directly enshrined in the legislation and Monitor will continue to have a role in ensuring foundation trusts comply.  

Under the previous legislation, each foundation trust had its cap set individually, in many cases at the level of private income achieved ten years ago. Now the 2012 Act obliges foundation trusts to make sure that the income they receive from providing goods and services for the NHS (their principal purpose) is greater than their income from other sources.

The Act also obliges foundation trusts to publish information on all their non-NHS work and to explain its impact on the delivery of goods and services for the NHS.  In addition, any foundation trust that wishes to increase the share of its income from non-NHS sources (including  private work) by more than five percentage points in any one year must obtain prior approval from their governors.

Foundation trusts are obliged to comply with the law under their continuing terms of authorisation. Monitor can therefore act to ensure compliance, not only with the 2012 Act but also with the National Health Service Act 2006.  A condition requiring foundation trusts to ensure that they are able to comply is proposed as part of the licence that Monitor will issue to foundation trusts from next year, replacing the current Terms of Authorisation.