It is widely accepted that the target for all trusts to become foundations by December 2008 will not be met. But what is the future for those that will not make the grade?

As our feature this week makes clear (to read the feature, click here), regulator Monitor will not change its rules, except to clamp down on applications from trusts that are not up to scratch. Chair Bill Moyes is unequivocal about what this means: trusts that do not measure up can never be financially viable.

Payment by results, which underpins foundation trusts' rationale, is partly to blame for blockages in the system. While the introduction of tariffs was always likely to be clunky and over-simplified initially, the government needs to work harder and faster to iron out its anomalies.

But while improving payment by results should lead to more certain financial footing for specialist trusts, which argue that their inadequately rewarded specialist work is leading to avoidable deficits, other trusts must face facts: their future is in doubt.

Strategic health authorities must prioritise bringing salvageable trusts up to scratch and begin conversations that encourage the rest to remove their heads from the sand.

Trusts, too, must take the initiative. The Department of Health mantra of the moment - 'look out, not up' - applies in this case as much as any other. Those that are not viable need to act now if they are to restrict damaging local publicity while services are taken over or wound down.

As the pain of previous reconfigurations has shown, it would be better for trusts to devise their own merger or takeover plans than have them imposed.