St George’s Healthcare Trust has had its foundation trust application paused by Monitor because of concern over its financial performance.
The regulator has deferred the south west London acute trust’s bid until March because the trust “does not yet meet all the financial standards expected”.
The trust must demonstrate it is on track to achieve a surplus by the end of the financial year.
It has agreed with the NHS Trust Development Authority to deliver a £6.9m surplus, but had a surplus of £1.5m according to its latest finance report, which covers October.
Monitor said the delay would allow the trust to finalise new borrowing arrangements. The regulator also expects the trust to put additional financial measures in place to ensure services will be protected if its finances worsen.
The trust was given a “good” rating by the Care Quality Commission in April and Monitor has judged that it is well led.
Miranda Carter, executive director of provider appraisal at Monitor, said: “We are deferring a final decision on whether St George’s should become a foundation trust for a short period whilst it finalises its new funding arrangements.
“When St George’s becomes a foundation trust we want to ensure it is in the strongest possible financial position.”
A statement from St George’s said that over recent years it had “turned around its financial position” and had paid off a “significant historical debt”.
It added: “However, this has left little for contingencies and so the delay will give the trust an opportunity to prove that it can deal with and sustain any downturn”.
Trust chief executive Miles Scott said: “Achieving foundation status is harder now than ever; the bar has been raised, and for the right reasons. We accept the high standards Monitor expects of us in terms of service provision, governance and financial management. A short delay now will enable us to strengthen our balance sheet so that we can deal with any ups and downs in NHS finances without impacting our clinical services or our plans for major investment.”
The trust’s chair, Christopher Smallwood, added: “We are very pleased to have got so far and to be so close to our goal. I regard our application as a benefit to us – we have learned much from inspections and have greatly enjoyed the growing relationship with our communities that come from creating a membership organisation.”