Foundation trusts believe they can grow their annual earnings until 2012 by keeping pay bills down.
Their latest three-year plans predict slowing income growth until 2011-12 but say pre-tax earnings will continue to grow quickly.
The earnings contribute to foundations’ annual surpluses, which are predicted to grow from a total of £339m in 2008-09 to £444m in 2011-2012.
However, Monitor has warned their predictions “may prove to be optimistic” given likely NHS investment cuts.
Monitor chief operating officer Stephen Hay said: “As funding begins to tighten, areas of financial and operational weakness may start to appear in some trusts.”
Foundations predicted average revenue increases of 4.2 per cent in 2009-10, 2.1 per cent in 2010-11 and 1.6 per cent in 2011-12.
However, they expect total pay costs to grow by just 1.5 per cent in 2010-11 and 0.8 per cent in 2011-12. The current pay deal would give staff covered by Agenda for Change a 2.25 per cent pay rise in 2010-11.
Earnings before interest, taxes, depreciation, and amortisation are predicted to grow by 9.1 per cent in 2010-11 and 6.3 per cent in 2011-12.
Monitor said the reason for an increase in earnings as a proportion of income was “income growth offset by lower pay cost growth”.
Monitor said foundations had to consider the impact of more severe restrictions on income.
A spokesman said they should look at commissioners’ plans but would have to make more critical judgements about how realistic they were.
He said: “There has to be an assessment by the providers as to how far they can rely on commissioning plans over the next few years.”
*Heatherwood and Wexham Park Hospitals foundation trust’s projection of a 9.9m deficit in 2009-10 has resulted in it being given the highest possible risk rating for finance. The trust put it down to poor planning; contract disputes and challenges worth £7.5m in 2008-09 from Berkshire East PCT; funding changes including the introduction of the tariff HRG4; and investments in services.