The Monitor chief executive has emphasised the need for its regulation to be flexible to respond to new types of provider, and to the need for change in the NHS.

David Bennett was speaking to the Foundation Trust Network conference on Tuesday.

He said it planned to be more flexible in assessing foundation trust applications and regulating providers.

Mr Bennett said there would be a shift of emphasis from assessing trusts’ five year financial plans to examining organisations’ capability, such as their ability to plan.

He said: “We need to shift our focus more towards looking at the capability of applicant trusts not just on their current and immediate term performance.”

He said there were “some other drivers of performance [than past performance and detailed plans] especially in this uncertain world that we need to look at”.

“We need to be risk aware, not risk averse,” he said.

Mr Bennett gave the example of assessing recently formed NHS organisations providing both health and social care, which were “not really going to have a long track record”. If it tried to apply its past tests to these “the whole thing will grind to a halt”, he said.

He set out indications of Monitor’s future strategy for its role, which it is expected to set out in full in in coming months.

Meanwhile, FTN chief executive Chris Hopson had earlier in the day warned that the NHS needed to make “rapid, radical reform” to services in response to lack of resources. In particular he highlighted the prospect of major cuts to hospital budgets under the government’s plans to pool large sums of NHS funds with local authorities in 2015-16.

He said: “[Providers] can’t go on pretending provider can carry an ever increasing risk – for example expecting 6-7 per cent savings from the acute sector if that is what happens under the integration transformation fund [which will see budgets pooled with local government]”.

Care Quality Commission chief executive David Behan, also speaking at the event on Tuesday, said his organisation would begin inspecting its first community and mental health trusts under its new regime after Christmas. Monitor has said it will not authorise any trusts to become FTs until they have undergone the new CQC checks.

However Mr Behan, asked about the issue, suggested community trusts could face difficulty being approved anyway.

He said: “There has been a lot of debate… A lot of community trusts should be looking at us [yourselves] to say, ‘Are we going to get through this anyway?’”