The government has said it will change the Health Bill to clarify and extend Monitor’s compliance powers over foundation trusts, and require governors to approve private patient income.

The Liberal Democrats called for the first change last week, while plans to relax controls on FTs’ private income have been highly controversial in recent months.

The proposed amendments are the latest of many which ministers have been forced to accept since the bill was introduced in January 2011.

A letter from health minister Earl Howe to peers today sets out amendments which say even when Monitor is operating fully under its new powers, it will be able to direct foundation trusts to change their boards, where it is “satisfied [that otherwise] the trust will fail to comply with the conditions of its licence”.

It will not mean Monitor maintains the same FT compliance regime as it has under current law, but the government said the change “clarifies” the regulator’s future powers.

Another change would mean Monitor’s current more extensive powers over FTs - previously intended to disappear automatically between 2014 and 2016 - will only be removed once the health secretary makes a further parliamentary order.

The government is also making a change on the controversial issue of FTs’ income from private patients.

The changes would mean FTs would have to declare in their annual plans any intention to increase non-NHS income. Their board of governors would “have to be satisfied that any plans… would not to any significant extent interfere with [its] principal legal purpose to provide NHS services”.

If there was a plan to increase non-NHS income as a proportion of the FT’s income by 5 percentage points or more, it would “have to be agreed by a majority of the governors in a vote”, the Department of Health said.

Earl Howe said in his letter to peers: “The amendments are designed to respond to the concerns we have heard about Monitor’s transitional intervention powers over foundation trusts and about foundation trusts’ ability to earn non-NHS income.”

It is unclear whether Lib Dem peers will continue to press the other changes they called for last week. These include an attempt to exclude the NHS from European competition law; and a duty on healthcare providers to cooperate.

Meanwhile, HSJ understands the government is set to accept an amendment under which Monitor would publish a regular “black list” of health services which are at risk of failure so need to be reconfigured, and work to ensure they are reconfigured.

The Lords will begin continue report stage debate of the bill tomorrow.