An increasing number of applications for foundation trust status are being turned down first time round because they are not up to scratch, it has emerged.

Foundation trust regulator Monitor said it was unhappy at a drop in the number of applications being passed at the first attempt, from 65 per cent in 2006-07 to 61 per cent in 2007-08.

"We continue to have concerns about the quality and preparedness of organisations coming into our assessment process," said a spokesman.

The regulator also hit out at the "erratic" rate at which trusts were being referred for foundation status by strategic health authorities.

The criticism came ahead of the publication of Monitor's end-of-year report, which shows big variations in the number of foundations in each strategic health authority region.

At the end of March this year there were 89 foundation trusts in England, including six authorised in the first three months of 2008.

There were just two in the South East Coast region - 12 per cent of acute and mental health trusts in the region - compared with 16, or 42 per cent, in the North West.

In the North East, seven trusts, equating to 70 per cent of trusts entitled to bid for foundation status, had succeeded.

The report shows foundation trusts performed well financially in 2007-08, achieving a total net surplus of£514m before exceptional costs and total revenues of£16.3bn.

They also exceeded national goals for waiting times by the end of March 2008 but there was continued variation on targets to reduce MRSA.

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