A financial analysis by York University's Centre for Health Economics shows differences in financial performance between foundation trusts and non-foundation trusts did not change when they were created in 2004. It says: 'The foundation trust policy per se has not made a significant difference to their financial management.'

A review of evidence about other potential benefits of foundation status found little evidence of progress. The report, Health Policy Matters, says: 'The evidence on the extent to which the potential benefits have been achieved in practice is not, so far, particularly promising.

'Local responsiveness and accountability has room for improvement; there is limited evidence of enhanced staff morale; and the regulatory regime may not be allowing for as much autonomy for foundation trusts as initially predicted.'

Maria Goddard, professor of health economics at the centre, claimed its study was the first robust analysis of foundation trust finances. She admitted the analysis was based on data from 2004-05 as newer data was unavailable. Foundations no longer have to make detailed submissions to the centre and regulator Monitor will not release data that it says is commercially confidential.

But Monitor rejected the findings, citing recent figures showing 'a sustained trend of improved financial performance'. A spokesperson criticised the 'limited data' and 'short period' the analysis used, pointing out only 10 NHS foundation trusts (out of 73 currently) were operating in the 2004-05 period.

To download Health Policy Matters, click here