Out-Law News 2 min. read
09 Jun 2015, 10:39 am
Monitor, who licences and regulates healthcare providers in England, has proposed increasing its scrutiny of trusts' financial performance as part of changes to its Risk Assessment Framework. It also intends to improve the practical support that it offers to trusts that need it, including through turnaround advice, leadership training and 'buddying' arrangements, according to a consultation on its proposals.
As part of its revised approach, the regulator would also focus on cutting the amount spent by the NHS on agency staff and management consultants, said David Bennett, Monitor's chief executive.
"The scale of the operational and financial challenge facing the NHS means we cannot proceed with business as usual," he said.
"Our revised regulatory approach will send a strong signal to all foundation trusts about what they should focus on, including reducing the costs of agency staff and management consultancy. It will also enable us to step in earlier where a foundation trust is in danger of getting into difficulty, or is failing to make maximum use of its resources. This approach will complement the practical help and support we will continue to offer foundation trusts in order to reduce the risk that they get into financial difficulty or that we need to intervene formally," he said.
The Risk Assessment Framework sets out the approach that Monitor uses to oversee the compliance of the autonomous NHS foundation trusts that it regulates with the financial sustainability and governance requirements of their licences. Foundation trusts are currently rated against two metrics: one based on their ability to provide a continuous service and one based on the way that they are managed.
Monitor has proposed re-introducing two previously-used measures to the framework: one tracking foundation trust deficits and another financial planning accuracy. Foundation trusts' ratings on these measures would be combined with their existing continuity of service ratings to produce a new financial sustainability and performance risk rating, with appropriate regulatory responses depending on where the foundation trust is ranked from 1-4. According to the consultation, this would allow Monitor to intervene where there is "uneconomical or inefficient use of resources" instead of only if there is a short-term risk to solvency as at present.
The new risk measurements would also allow Monitor to implement the same spending limits on agency staff and consultants that will be applied elsewhere in the NHS. This new approach would automatically apply to all foundation trusts found in breach of their licence on financial grounds. From July, total agency staff spending for each NHS trust in financial difficulty will be capped; with a maximum hourly rate set for agency doctors and nurses hired by any trust. Use of agencies not on approved pricing frameworks would be banned, while any contracts for external consultants over £50,000 would require regulatory approval.
More specific criteria for testing foundation trusts' corporate governance and efficient use of resources would be introduced under the revised Risk Assessment Framework in due course, Monitor said. In addition, a series of new financial triggers would enable it to take regulatory action earlier if a foundation trust is in deficit, is failing to deliver on its financial plan or is not providing vale for money.
A consultation on the proposed changes to the framework closes on 1 July.