Foundation status could no longer be withdrawn from trusts in the event of financial failure under new amendments to the Health Bill.

The amendments, published by ministers this afternoon, contain extensive details on the “continuity of services” regime for foundation trusts, and also include provisions for failing trusts to be put into administration.

According to a briefing note, the regime will prevent financially unsustainable FTs from reverting to ministerial control “by removing the ability to de-authorise an FT”.

The notes say: “As a last resort, in the unlikely event where previous interventions had been unsuccessful and a provider became unsustainable in its current form, Monitor would trigger the ‘continuity of services’ regime and appoint a suitably qualified person (‘administrator’) to take control of the provider’s affairs.”

Under previous plans, all trusts’ essential services would have been “designated” to remain open in the event of a provider failing. That provision has been removed. Instead, commissioners will act only where a provider becomes unsustainable. Commissioners would be responsible for identifying where the withdrawal of services would have a “significant adverse impact” on health or would impact on health inequalities.

When a “trust special administrator” had been appointed, they would prepare a draft report to Monitor, recommending how to secure continued access to services, in line with requirements determined by the commissioner.

A 30 working day consultation would then follow, in which the views of patients, the public, staff, health and wellbeing boards, HealthWatch and other appropriate parties would be sought.

The Care Quality Commission would provide an assessment of the provider’s services, to identify concerns over quality and patient safety, and would expect the administrator to secure endorsements from commissioners and relevant clinical advisors. Views of the Independent Reconfiguration Panel would also be sought.

Monitor’s final report would be submitted to the secretary of state, who would have a right to veto where the TSA had failed to follow due process. The health secretary could also veto the plans where commissioners had failed to secure continued access to services for the local community, or failed to secure services that were good enough or offered good value for money.

The amendments have also removed a provision, set out in earlier drafts of the bill, to extend insolvency law to foundation trusts.

Guidance published by the DH clarified existing plans to allow Monitor to create a “risk-pool” to “secure continuity of essential services if a provider becomes unsustainable”.

It said this pool could be funded by compulsory “insurance-type” levies on providers and commissioners based on the risk of failure. This “would create an incentive for providers to become more sustainable and thus reduce their levy,” it said.