The Department of Health is overhauling the process for checking whether a trust is ready to apply for foundation status to avoid “embarrassing” the health secretary, HSJ has discovered.

HSJ has also learned the DH had originally planned to examine whether the private finance initiative was a barrier to 24 organisations becoming foundation trusts, rather than the 22 it actually investigated.

In January the DH’s provider executive group was told changes were needed to the process used to check trusts’ readiness to become a foundation, “to avoid embarrassing the secretary of state by supporting a ‘no hoper’ or a trust which fails early after authorisation (e.g. Mid Staffs)”.

Although the government has since relaxed the April 2014 “drop dead date” for all trusts to become foundations, it still “expects” trusts to achieve the target.

In May a DH provider executive group team was given responsibility for streamlining the process leading up to a Monitor application. In June consultancy Deloitte was brought in to develop the aspirant foundation trust assessment framework.

A June paper from provider leadership development head Laura Roberts said the DH would build a list of approved consultants to apply the framework to trusts.

The assurance framework is due to be tested in pilot sites in early July and a list of assured suppliers is due to be created by the end of the month.

Research by HSJ has revealed that the DH’s initial list of trusts whose application for foundation status is threatened by expensive PFI schemes consisted of 24, not 22, organisations. It originally included Royal Liverpool and Broadgreen University Hospitals Trust, and East Lancashire Hospitals Trust – both of which could have bigger PFI burdens than those remaining on the list.

The names of the two additional trusts appear in the DH’s original tender document for the work on PFI and foundation status, which was released under the Freedom of Information Act. McKinsey won the contract and is due to report on the issue this week.

East Lancashire is already making unitary payments on its £109m PFI and the average payment it will make over each of the next three financial years amounts to 3.8 per cent of its turnover.

This is higher than the proportion of turnover at one trust that is on the McKinsey list. North Bristol’s average is 2.99 per cent.

The Royal Liverpool PFI scheme receivedf Treasury sign-off in June and plans to announce a short-list of bidders at the end of July.

A DH spokeswoman would not comment on why Royal Liverpool and East Lancashire had been taken off the McKinsey list.

The tender document asked bidders to “highlight issues to raise with Monitor in terms of their assessment regime with any suggestions for potential variations”.