Concerns that foundation trusts are submitting over-optimistic forecasts of their performance have been borne out by the latest figures.

More than half of the foundation trusts rated amber for governance at the end of June had claimed to be on course for a green rating at the start of the financial year.

The findings, revealed in Monitor's quarterly review today, has led chair Bill Moyes to warn that if trusts continue to predict unrealistic performance, boards will face independent reviews, starting as early as December.

The regulator has already expressed concern that some annual plans for 2007-08 did not match performance (see full story here).

Mr Moyes told HSJ this week: 'We were a bit sceptical that foundation trusts were being unrealistic in their assessments of their ability to deliver all the targets and I think it is borne out by these figures.

'You have to assume the worst will happen or something close to the worst and if doesn't then have a party. But too often they have a party and then discover actually that the worst has happened.'

Boards had to listen to information from managers, he said.

His comments came as the NHS Confederation's foundation trust network published a survey of vice-chairs of boards of governors showing 85 per cent are influencing trust priorities and policies and nearly two-thirds are challenging policy decisions of the corporate boards.

Monitor's review states the greatest service performance challenge remains year-on-year reduction in MRSA, which 22 trusts out of 69 failed to reach in quarter one.

Three trusts were rated red for governance and 39 rated green.

Two trusts received a financial risk rating of two, putting them in 'significant breach' of their terms of authorisation.

The overall surplus for foundation trusts was£88m at the end of the quarter.

The report warns of an 'increasingly urgent need' for commissioners to clearly set out what they will seek to buy in the future.