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Back to the future: is the NHS Foundation Trust model relevant?

Congratulations to St George’s University Hospital, which this week was authorised as a Foundation Trust (FT) by Monitor. This is a great achievement and a reflection of considerable hard work. It is the fourth FT authorisation in five months after a long hiatus because of the changing CQC inspection regime. However, in the Interim Partners office, the authorisation announcement sparked the question: does Foundation Trust status or the ambition to achieve it remain relevant?  


My personal opinion is that it does not. Alan Milburn announced the creation of Foundation Trusts in 2002 to enable earned autonomy for NHS leaders and organisations, as well as increase quality and clinical standards.  Foundation Trusts have the ability to borrow, invest and retain surpluses and are accountable to patients, staff and the local communities the Foundation Trust serves. Initially, NHS Trusts which had been awarded three stars by the now defunct star rating system were allowed to apply for Foundation Trust status. I believe Milburn was right to create Foundation Trusts. The ambition to reward high performance with increased autonomy intrinsically makes sense.

However, my view is that the FT model itself is now out of date and doesn’t respond to the healthcare demands of today. The financial context in which the NHS finds itself has changed. Between 2001/02 and 2004/05 NHS spending growth stood at 8.7% in real terms, compared to between 2010 and 2014 when it stood at 0.6%. Organisations must find ways to increase efficiency and reduce costs to generate financial surplus and consequently, attaining FT status is more difficult than in the ‘boom’ years.

Second, the failure of Mid Staffordshire NHS Foundation Trust demonstrated an example of where a Foundation Trust failed to deliver quality care or effective performance.  The combination of a deteriorating financial position and increased movement towards new models of care means that the traditional hospital and NHS Trust boundaries, relics from the 1960s and 1990s, are breaking down. The provision of healthcare is becoming more fluid and the NHS Five Year Forward View is committed to not “pretend that a single new model of care should apply everywhere”.

It has been suggested that 47 NHS Trusts will not achieve Foundation Trust status with an independent future.  When such a number cannot achieve a goal surely it’s wrong to presume that the favoured model is without fault? As Bill Moyes, the former Chair of Monitor said in the summer of 2014, “If one third of the hospital system is permanently not demonstrating good viability and good governance, is that telling you something about actually how the system should run as opposed to how we thought it should run?”

Today, assessing Monitor’s Foundation Trust ratings system, 22% of FTs have a continuity of service rating (CSR) of either one or two (one indicating that a Trust is most at risk of failing to carry on as a going concern). In terms of governance, 29% are ranked as either red or under review by Monitor. 18% of FTs have both a CSR of two or one and are red or under review. Given the number of FTs in financial distress or with low governance ratings, surely the model of aspiration needs to be reframed. Whilst FT status was a noble intention to enable higher clinical standards and locally accountable decision making, we must, 13 years later, go back to the future and focus on new ways of meeting challenging 21st century healthcare demands.

I would welcome your thoughts on either the sustainability or relevance of the FT model, or suggestions on how you think the provider landscape may or should change in the years ahead.

David Rason is the Consultant for Healthcare at Interim Partners.

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