The financial problems faced by NHS foundation trusts (FTs) will become worse over the next few years, according to Monitor.
The economic regulator’s review of FTs’ annual plans states that far from being a legacy of their NHS trust past, the financial malaise of FTs is set to intensify as their cost-cutting measures reduce their income.
Without positive service redesign, Monitor says, the 20% spending cuts planned by FTs over the next five years will not improve their financial health.
It notes that the financial gap between more and less successful FTs is widening, with the latter including many based at district hospitals, carrying PFI debts or in deprived areas.
“We expect an increasing number of trusts could be placed in significant breach for financial reasons,” said Stephen Hay, Monitor’s Chief Operating Officer.
According to the regulator, FTs “need to be making significant changes in the way services are delivered, including further service reconfiguration and consolidation of suppliers”.
The financial plans of FTs forecast a 1% decline in income overall in the next three years, with no increase in acute care activity (compared with an average annual growth of 4.5% in recent years).
The review predicts that at least 17 FTs will receive a red rating (indicating a serious risk of breaching their authorisation terms) in 2012–13. “We expect there will be more,” it warns.
According to David Stout, Deputy Chief Executive of the NHS Confederation, Monitor’s report shows an urgent need for service redesign towards more integrated and community-based care.