Monitor has ordered a review of the financial viability of a number of small and medium-sized foundation trusts, in a process described by one chief executive as “cloak and dagger”, HSJ can reveal.
The foundation trust regulator would not confirm the number of organisations subject to the review, which is being undertaken by consultancy firm McKinsey. However, the chief executives of three trusts privately confirmed to HSJ their trust was included.
All have an annual turnover of £230m or less and are district general hospital trusts, but not all foundations trusts smaller than this are being assessed.
The investigation was triggered by the annual plan review process, under which foundation trusts submit three-year plans each June. Monitor will order a “second stage review” of some of these plans if specific concerns emerge about its contents.
The regulator’s summary of the annual plan reviews, released last month, said 13 trusts had been selected for
the second stage reviews but “this year [it had] further developed this stage of the process, resulting in a more targeted and in-depth review, with an emphasis on diagnosing underlying problems”.
It would not confirm how many of the 13 were part of the viability review.
The summary document said: “We expect trusts will also need to be making significant changes in the way services are delivered, including through system reconfiguration and consolidation of suppliers.”
The viability reports are due to be submitted to Monitor by the end of September.
The news comes after the Department of Health indicated that challenging efficiency savings could continue to be required beyond the 2015 end-point originally set out under the quality, innovation, productivity and prevention programme.
A Monitor spokeswoman declined to comment on the viability review’s terms of reference but said its “findings will be shared with the sector later this year”.
Burton Hospitals Foundation Trust chief executive Helen Ashley told the £165m-turnover organisation’s board meeting last month that Monitor had asked it to “provide a progress update in the development of a strategy to address concerns over its future sustainability” - although Monitor has denied that Burton is one of the trusts facing a viability review.
Three days after asking the trust for a response chief executive Helen Ashley said in a statement: “The trust is developing a stategy to address future sustainability and we are updating Monitor on the progress of key work streams at our monthly progress review meetings.
“Work on this strategy is due to be completed in November when it will be presented to the board.”
One trust’s chief executive told HSJ the process had been “very cloak and dagger” and the consultants had asked for large amounts of workforce and activity data.
The past week has also seen one non-foundation trust announce it was not viable as an independent organisation, while another declared its preferred partner for merger. Barnet and Chase Farm Hospitals Trust selected the Royal Free London Foundation Trust as its preferred partner and Bedford Hospital Trust has announced it was looking to partner with a foundation trust.