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Foundation trusts increase cash as patient care declines

Foundation trusts, a flagship of the labour government’s National Health Service reforms, are building a growing cash mountain that they appear unable or unwilling to invest in improved services. The sums involved are up by more than £300m from about £1bn at the end of the last financial year to £1.32bn in the first three months of this year.

Much of the money is concentrated in a minority of the 67 foundation trusts, and some of it appears to reflect prepayment for work not yet done.

The surplus exceeds the £1bn being forecast for the rest of the NHS. Foundation trusts account for only about a third of acute and mental health spending.

Some of the cash is simply working capital but a significant part of it could be invested in new or improved services.

Reporting the first quarter results, Monitor, the foundation trust regulator, said their financial strength put foundation trusts “in a good position to invest in reshaping services for the benefit of their communities”.

But they were reluctant to do so yet because it was not clear what primary care trusts – the chief commissioners of care for patients – wanted to buy.

“There is an increasingly urgent need for clear indications from commissioners about their healthcare purchasing intentions,” said Bill Moyes, Monitor’s chairman. Without certainty about long-term requirements, trust boards were reluctant to invest.

The lack of clarity, he said, is “having an impact on the timing of significant investment decisions”.

But while Monitor says the lack of investment is not all the fault of foundation trusts, it also takes them to task for not using some of the money to invest in better environments for patients and ensuring they hit healthcare targets.

Twenty-two of the 67 are behind targets for the reduction of hospital-acquired infections, and some are behind on other government targets. A significant number are failing to make progress, having forecast in their annual plans that they would.

With the judgement of foundation trusts’ performance relying on a degree of self-certification, Mr Moyes warned that Monitor would put independent review teams into hospitals where boards appeared to make overly optimistic progress predictions.

The Foundation Trust Network – the body that represents foundation trusts – said it would be “concerned” if that “marked a move away from its role as a risk-based regulator towards direct performance management”.


The revelation from Monitor that fudged financial fiddling is still rife in the NHS reminds Health Direct of our posting on Patricia Hewitt’s distorted financial observation.

On June 07, 2007 Health Direct posted: NHS figures show 510m Pound annual surplus as the NHS apparently made a small surplus in 2006/07, figures unveiled by Health Secretary Patricia Hewitt showed.

The NHS recorded a surplus of £510 million, the data showed. However, 22% of NHS organisations are still in debt and unable to balance their books. The gross deficit of the NHS stood at £911 million, down from £1.3 billion in 2005/06.

To offset the deficit and create the surplus, regional health bosses have been building up cash reserves.

They took millions of pounds from primary care trust (PCT) budgets and held back £450 million from training and public health budgets.

Dr Jonathan Fielden, chairman of the British Medical Association’s Consultants’ Committee, said: “While the NHS may be in credit today, the journey to balance the books has wreaked havoc on the NHS and is a return to boom and bust health economics.

Professor Janet Finch, chair of the Universities UK health and social care policy committee, said: “On the face of it, today’s announcement is good news. But take a closer look at the Strategic Health Authorities’ ‘strategic reserves’ and they seem to consist of funds from the education and training budgets. If things continue in this way, it will be a disaster for patient care and health service morale. “