Most NHS providers are “extremely unlikely” to be able to obtain a credit rating, and the proposal is likely to be unacceptably costly to the health service, the NHS Confederation has warned.

Monitor, which would become the healthcare sector regulator under the NHS reforms, has advanced proposals to make all NHS providers maintain an “investment grade” rating from one of the three major ratings agencies. The grade would measure trusts’ financial strength as part of the regulator’s licensing regime.

But confederation deputy chief executive David Stout warned: “It is extremely unlikely that most existing providers of NHS funded services would be able to achieve the proposed rating. They are primarily a process for rating credit risk and differentiating credit quality, and we are unconvinced that they are an appropriate proxy for patient protection.”

He added: “Some organisations we have talked to say they have experience of this issue and have talked about figures of £200,000 to get an initial financial rating. If you apply that across the NHS you are looking at an unacceptable cost.”