National Health Service foundation trusts are on the way to generating a surplus of nearly £200 million for 2007/2008, and total membership is expected to hit 1.5 million by the end of the financial year further strengthening local accountability, according to a report by watchdog Monitor.

Capital expenditure of £921 million is being sunk into projects that will directly benefit patients and staff, the regulator says, but adds that it is encouraging foundation trusts to consider other investment opportunities, such as developing innovative service delivery and investing in high-calibre staff, to drive further improvements in patient care and implement longer term strategic plans.

“NHS foundation trusts have the freedom and opportunity to use their cash reserves and access to borrowing to deliver better services for patients…However, historically, NHS foundation trusts have underspent on their planned investment programmes and uncertainty about commissioners' plans will continue to influence decision making and may act as a brake on investment," commented Bill Moyes, Chair of Monitor.

Performance management?

The report also calls for those boards of trusts failing to meet healthcare targets to identify how cash reserves and borrowing freedoms could be used to boost performance, and suggests the introduction of independent review of board self-certification, if boards are not able to demonstrate how they will meet their objectives. This proposal, Monitor says, is based on a number of situations where trusts have failed to meet certain goals despite declaring that they could do so.

But Sue Slipman, Director of the Foundation Trust Network, is wary of this suggestion: “Foundation Trusts would be concerned if this marked a move away from [Monitor’s] role as a risk-based regulator towards direct performance management. The focus should be upon FT corporate boards retaining responsibility for addressing legitimate concerns.”

“Monitor's approach to risk regulation has played a significant role in enabling FTs to achieve their potential,” she said, concluding: “Overall, we know foundation trusts are using their financial freedoms and better governance arrangements to take the NHS in a new direction...Monitor's findings reflect these achievements.”