Health regulator Monitor’s effectiveness has been brought into question by an influential group of MPs.
The regulator “must get better” at identifying NHS hospital trusts at risk of failure, the public accounts committee has said.
Its latest report highlighted the large proportion of foundation trusts, which Monitor regulates, that are in financial difficulties.
Around a quarter of foundation trusts predicted that they would end the 2013-14 financial year in deficit, the report said.
The MPs also said that Monitor’s credibility is “damaged” by a lack of experience in the NHS among staff.
Just seven of Monitor’s 337 staff have a background in medicine and only 21 have had experience working in the health service.
Margaret Hodge, chair of the public accounts committee, said: “These are tough times for the NHS.
“The number of NHS foundation trusts in difficulty is growing, and this casts doubt on Monitor’s effectiveness as their regulator.
“Over a quarter of foundation trusts, 39 out of 147, were predicted to be in deficit at the end of 2013-14, evidence of the increasing financial challenges they are facing.
“By December 2013, 25 trusts – one in six – were in breach of the conditions set when they were awarded foundation trust status.
“These trusts are suffering from serious financial pressures, poor leadership or both, and some have been allowed to go on struggling for more than four years.
“Monitor has got to get much better at identifying and taking radical action in trusts at risk of failure. However, its effectiveness is undermined by a lack of frontline NHS experience.
“Only seven of Monitor’s 337 staff have a clinical background and only 21 have experience of running or working in the NHS, which damages Monitor’s credibility and ability to diagnose problems and develop solutions.
“It is currently spending £9m a year out of its £48m budget on consultants to fill gaps in expertise.”
The MPs made a string of recommendations for the regulator.
They said that it must take faster action in trusts where problems have been identified. Some with difficulties in leadership or finances have been allowed to struggle on for “too long”, they added.
The report also said that the regulator should set out how it will fill gaps in its staff expertise.
Meanwhile it called on the Department of Health to review regulatory arrangements to ensure that Monitor and other regulators do not overlap or miss any problems.
David Bennett, chief executive at Monitor, said: “This criticism comes in the wake of a report from the National Audit Office which said Monitor provided value for money in regulating foundation trusts and was generally effective in helping them to improve.
“However, the committee does put its finger on some of the difficult issues the NHS faces as rising public demand and expectations of healthcare put pressure on the budget. As the regulator, Monitor is not responsible for the tough financial circumstances in which trusts find themselves.
“Although the foundation sector as a whole is currently in surplus, a minority of trusts do face complex operational and leadership challenges, including issues about the quality of care patients receive. We are working hard with our NHS partners to support trusts in solving all these problems. We acknowledge there is always room for improvement, and we are already taking action along many of the lines recommended by the committee.”