The strong financial performance of foundation trusts last year proved the merits of giving successful trusts greater autonomy, Monitor chair Bill Moyes has claimed.

Speaking as the independent regulator reported the trusts generated a£75m surplus in the first nine months of 2006-07, he said: 'Monitor believes that these results... further highlight the merits of the foundation trust system which gives autonomy, and therefore greater responsibility, to boards.'

The surplus compares favourably with the£13m forecast surplus for the rest of the NHS this year. Eight foundation trusts achieved a financial rating of either four or five, the two highest scores, and a green governance rating.

But two foundation trusts - Moorfields Eye Hospital, and Peterborough and Stamford - have been given a red governance rating. A Monitor spokesman said that Peterborough was 'a cause for concern' after a 'number of breaches of the six-month waiting target' and that Moorfields had missed three 'priority one' governance targets.