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Realistic planning helps foundation trusts to survive difficult period, says regulator

NHS foundation trusts have reported a good overall financial performance despite a more challenging economic environment, according to a new report published recently by Monitor. At the beginning of 2010/11 Monitor identified a number of key challenges that could present significant risks to foundation trusts.

In NHS Foundation Trusts: Review of Twelve Months to 31 March 2011 Monitor reviews performance against these challenges and reveals that risks have largely been mitigated.

However, performance against waiting time targets for cancer continues to present the most significant service challenge for foundation trusts. Monitor has indicated this could lead to trusts breaching the terms of their authorisation if their performance does not improve.

Overall, there was a reduction in formal regulatory action taken by Monitor in 2010-11 compared with the previous year. Financial performance has broadly followed plans. Delivery of Cost Improvement Plans (CIPS) – identified as a key challenge for 2010-11 – was behind plan, but did represent a marked improvement compared to previous years.

Key points from the performance review include:

  • NHS foundation trusts reported a net surplus (before impairments) of £406 million;
  • Cost Improvement Plans (CIPs) were 7% behind plan (an improvement from 11% at quarter four 2009/10);
  • CIPs delivered at quarter four represented 3.9% of operating costs; behind plan (4.4%), but an improvement from 2009-10 when CIPs represented 3.0% of operating costs;
  • 70 foundation trusts (51%) declared no target breaches at quarter four (compared to 44% at quarter three);
  • Of those trusts breaching targets, 28 foundation trusts  are breaching cancer targets; and
  • The average financial risk rating (FRR) is 3.5, slightly above planned 3.4 (5 equals lowest risk, 1 equals highest risk).

Commenting on the results, Monitor’s Chair, David Bennett, said:

 "At a time when there is much discussion about the future arrangements for the NHS, it is absolutely vital that foundation trusts maintain their focus on the day job. The results for the past twelve months are encouraging, but we know that the most significant challenges are yet to come. Trusts must continue to strive for improvements in efficiency, whilst improving the quality of care they provide.

"We know that some issues remain challenging, such as achievement of cancer targets. While targets aren’t a definitive measure of quality and safety they are there to improve access to services for patients and it’s important that they are met.  We are clear that where trust Boards are unable to improve their performance we will act.

"The results for the year suggest a marked improvement in planning from foundation trusts. This is a good example of a devolved system working. Monitor does not set arbitrary levels of savings or performance-manage trusts. Instead we encourage them to produce realistic plans, based on discussions with their commissioners, ensuring the demands of the local population are met."

You can read the review here.


  • For further information please contact Michael Moruzzi, Media and Stakeholder Relations Manager, on 020 7340 2438 or
  • Monitor is the independent regulator of NHS foundation trusts. We were established in January 2004 to authorise and regulate NHS foundation trusts. Monitor is independent of central government and directly accountable to Parliament. Information about Monitor’s current role is available on our website:
  • Follow Monitor on Twitter @MonitorUpdate

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