Foundation trust regulator Monitor claims it has saved the NHS millions of pounds by maintaining its high bar for approving providers for foundation status.

In a report published today, the regulator estimated its tough assessment process had saved around £275m at just nine of the 122 NHS organisations it has authorised.

Lowering the bar for applicants will not help the NHS to meet its long term challenges

The bulk of the savings stemmed from the improved cost efficiencies and scaled back capital expenditure plans trusts are often asked to make if they are among the one in three that fail their first attempt to apply for foundation status.

The report looked at the cases of nine NHS organisations whose applications were deferred. By comparing their planned efficiency savings before their applications were deferred with their actual and planned savings after their subsequent successful applications, Monitor calculated the nine would save the NHS around £275m by 2012-13.

Details of the estimated savings per trust show a wide variation, ranging from a small decrease in savings at one to an extra £109m at King’s College Hospital in London. This variation meant the regulator could not extrapolate the £275m found across the nine organisations to the 40 or so which have had assessments deferred.

Although the evaluation was written by Monitor itself, the methodology for distinguishing savings attributable to its work as opposed to trusts’ own efforts was independently reviewed and used external consultants.

Monitor executive chair Bill Moyes said the savings attributable to the regulator’s input showed the assessment bar “cannot and should not be lowered if we are serious about removing inefficiency in the NHS”.

He said: “Lowering the bar for applicants will not help the NHS to meet its long term challenges of affordability and high quality care for all.”

The claimed savings imply Monitor - whose funding was around £14.5m last year - comfortably saves the NHS more than it costs.

But there was no evidence the organisations continued to improve their financial and other performance faster than non-foundations once they had been approved. This echoed the findings of an earlier evaluation by the Healthcare Commission and Audit Commission.

HSJ understands Monitor considers this acceptable, as its regime is geared to set a minimum standard, not to drive continued improvement. But the report’s action plan says the regulator will now develop comparators for monitoring the ongoing performance of foundation trust boards.