In an exclusive interview with HSJ ahead of the publication of Monitor's annual report today, Bill Moyes sounded a cautionary note intended for new health secretary Alan Johnson and prime minister Gordon Brown.
The regulator was 'concerned' about policy direction for foundation trusts and for the overall reform programme, he said.
'At the moment, there is a lot of ambiguity as to whether the new ministerial team wants to drive forward; we are detecting tendencies to pull things back to the centre and we are a bit worried about that.'
Mr Moyes said there was 'anxiety in the system in all sorts of areas'. There was a danger that ministers would 'signal a more centralising approach' to 'control or calm down the atmosphere'.
On commissioning, Mr Moyes said there was now a question as to whether commissioners started to control the shape of provision or whether they 'described' a pattern of services and let providers 'react'.
He said the system was at a crossroads. He welcomed health minister Professor Sir Ara Darzi's review of the NHS in London and said he hoped it would set a precedent nationally.
'We could either see the work of Sir Ara opening up commissioning so it focuses on need, evidence, what a cost-effective care pathway is, what would be a sensible pattern of services to meet need and then let providers respond to that with their own ideas, or it could go back to a system in which everything is managed centrally and the autonomy of foundation trusts is gradually eroded.'
He also raised concerns that regulator Ofcare would have the power to register and deregister foundations.
Under current proposals, Ofcare would be allowed to register and deregister NHS and private providers. However, Mr Moyes has called on the government to hand that power to Monitor for foundation trusts.
'We think there will be a very large number of cases where deregistering a whole hospital is not going to be a credible sanction and that therefore what will be required in practice is the kind of tough intervention that we already have,' he said.
He called for a system where Ofcare would alert Monitor if it had concerns about the performance of a foundation trust and Monitor would be given the power to intervene using its existing statutory powers.
'We can use our powers of authorisation and intervention to force providers to act quickly; we can enforce new managers and boards and bring in external consultants if necessary.'
He warned that the two regulators had to have a clear role and not 'squabble'.
'We are concerned about the possibility of both the new regulator and us having enforcement powers. There is a grey area. If the government gets it wrong then we think a very effective system we have built up will be damaged,' he said.
In a further recommendation he said strategic health authorities should 'provoke competition'.
'There is a tendency in some areas for SHAs to see competition as something of a problem because it creates new capacity; they see their role as managing existing organisations rather than using competitive pressures to force change.'
University College London Hospitals foundation trust chief executive Robert Naylor said there was increasing evidence that foundation trusts were delivering what they were set up to do, 'which is improved clinical services and getting closer to the populations they serve'.
'The financial results of foundation trusts are significantly better than our NHS colleagues and we are delivering considerable results,' he said.
'Some foundation trusts are three years old, some are just three weeks - it is a developing programme which will be incremental over time.'
A report by the Foundation Trust Network this week said the trusts were 'demonstrating their potential for innovation'. NHS Foundation Trusts: the story so far, shows that foundation trusts are using their financial freedoms and governance arrangements to their advantage.
According to the report, 52 per cent of chairs and chief executives said governors were central to making sure trust boards were accountable to patients, stakeholders and the local community. Almost a quarter said their new freedoms had enabled them to implement projects 'previously beyond their reach'.
However, the report concludes there 'is still a long way to go' and has called on the government to offer further support and commitment.
Foundation Trust Network director Sue Slipman told HSJ foundations must be left to be autonomous.
'We would not want to be undermined, there are dangers and the potential for limiting [autonomy] by tying foundation trusts into local area agreements,' she said.
She added that surpluses generated by foundation trusts over the last financial year also meant they were able to improve the patient experience and innovate more swiftly.
See 'It's a question of trust: will the new ministers devolve power?'
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