Monitor has called for the NHS to speed up the rate of bids for foundation trusts, despite the prospect of cash cuts and major service reconfigurations.

In the regulator’s annual report executive chairman Bill Moyes says it is a “great concern” that half of hospital trusts are not good enough to pass its tests.

Monitor had planned to assess up to 80 trusts a year by 2009, but only 43 were put forward by the Department of Health during 2008-09 - two fewer than the previous year.

Twenty-six were authorised in 2008-09. In the previous year there were 30.

Mr Moyes has said he believes in a lot of cases trust boards simply need to make foundation status a higher priority.

However, changes in demand made likely by the recession, and the greater need for reconfigurations to increase efficiency, have set some trusts back and may make some untenable in their current form.

In the report Mr Moyes also calls for “realistic plans” to be found for trusts that are unlikely ever to be authorised.

A Monitor spokeswoman said the impact of the recession would highlight organisations that are “not sustainable” but the regulator was “not going to put numbers on” those unlikely to gain foundation status.

“But we still see too many coming to us with unprepared boards. We would like a more concerted effort,” she added.

NHS South East Coast has the lowest proportion of foundations after London. The strategic health authority’s head of provider development Sue Egerton said all its trusts were capable of becoming foundations in their current form, though some were still to prove they could pay back historic debt.

She said the region’s pipeline had improved, with four authorisations in 2008-09, compared with none the previous year, and it expected five this year.

Ms Egerton said investment cuts should not affect the need to become foundations: “We would like to think it is not a [one off] project, it is a part of how you run an organisation.”

Foundation Trust Network director Sue Slipman said issues including handling of private finance initiative payments and historic debt, and potential major service reconfigurations left some trusts uncertain about their future.

She said: “There are some real policy issues. No matter how well ‘prepared’ some organisations have been they are not going to make it to FT status.”

FT progress so far

Number of foundations at 31 March (as proportion of potential foundations in brackets)
● North East 8 (80%)
● North West23 (63%)
● South West 15 (63%)
● Yorkshire and the Humber 13 (62%)
● East of England 14 (56%)
● South Central 6 (43%)
● West Midlands 11 (42%)
● East Midlands 5 (42%)
● South East Coast 6 (38%)
● London14 (35%)