Coalition reform agreement sees deadlines extended and relaxed

Its response to the NHS Future Forum also extended Monitor’s regulation of foundation trusts until 2016 but offered no further guidance on a failure regime for financially challenged trusts.

The April 2014 “drop-dead” date for foundation trusts has been abandoned with the response document saying: “It will not be an option to stay as an NHS trust, but there will no longer be a blanket deadline in the bill for abolishing NHS trusts as legal entities.”

Instead, organisations must become foundations “as soon as clinically feasible, with an agreed deadline for every trust”.

There are 137 foundation trusts with 116 other trusts still to go through the authorisation process.

The response document said there were “concerns about the practicality” of the plan to create “designated services”, whose operation would be guaranteed by Monitor but for which commissioners would pay a premium. The bill would be amended accordingly.

The bill had envisaged disputes between commissioners and providers over designation of services being settled by tribunal.

Foundation Trust Network director Sue Slipman warned: “If we lose the ‘drop dead’ date it will dissipate focus. The government should keep the deadline but allow an exceptions regime where trusts can demonstrate that they could be viable for authorisation within a short time of the final date.”

A lawyer from a firm that advises trusts looking at mergers and acquisitions as a way of gaining foundation status said: “It takes some of the pressure off a snap merger that there might otherwise have been – especially for the trusts with no obvious partner.”

He added that the problems at the stricken care home provider Southern Cross could mean the government will consider a financial stability element to licensing providers of NHS services.

KPMG partner Martin Munro said: “For some, there is simply too much to do to make the changes to make them into – or part of – well governed, clinically and financially sustainable organisations. The challenge, as ever, is how to maintain focus and a sense of urgency when there isn’t a hard deadline.”

The chief executive of a trust in the foundation pipeline told HSJ: “‘As soon as clinically feasible’ is quite open-ended. They have gone further than I expected in easing the deadline.”

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