Monitor’s current and future roles:

Monitor’s current and future roles:
PRESENTATION Patrick Fraher Senior Policy Advisor Carolyn May Policy Advisor Monitor’s current and future roles: a gap analysis

Agenda Monitor’s current role Monitor’s future role
Governors’ current and future roles Case studies Discussion: how to bridge the gap

MONITOR’S CURRENT ROLE

Introduction to Monitor
Established in January 2004 Our functions and powers are set out in the National Health Service Act 2006 We are independent of central government and directly accountable to Parliament We are a small organisation – circa 110 staff based in central London

Monitor’s mission ‘To operate a transparent and effective regulatory framework that incentivises NHS foundation trusts to be professionally managed and financially strong and capable of delivering high quality services that respond to patients and commissioners.’ We are currently about promoting good governance (including quality) and dealing with failure

Our core functions There are currently three main strands to our work:
Assessment: Determining whether a trust is ready to become an NHS foundation trust; Compliance: Ensuring that NHS foundation trusts comply with the conditions they signed up to – that they are well governed and financially sound; and 3. Development: Supporting NHS foundation trust development.

Assessment We receive and consider applications from NHS trusts
seeking foundation status and look at three areas: Is the trust well governed with the leadership in place to drive future strategy and improve patient care? Is the trust financially viable with a sound business plan? Is the trust legally constituted, with a membership that is representative of its local community? If we are satisfied that certain criteria are met, we authorise the trust to operate as an NHS foundation trust.

Regulating NHS foundation trusts
Once authorised, we regulate foundation trusts to ensure they comply with their terms of authorisation These are a set of detailed requirements covering how foundation trusts must operate – in summary they include: the general requirement to operate effectively, efficiently and economically; requirements to meet healthcare targets and national standards; and the requirement to cooperate with other NHS organisations.

Regulating NHS foundation trusts
In more detail they include: the NHS foundation trust’s constitution; details of the mandatory goods and services that the trust must continue to provide to patients; a list of the mandatory education and training services the trust provides; a limit on how much the trust can borrow; the proportion of the total patient income which the trust can make from private healthcare charges; and a statement of the information the trust must provide to Monitor and any other organisations.

Foundation Trusts are: Role of Monitor’s compliance team is to:
Why do compliance? Foundation Trusts are: Role of Monitor’s compliance team is to: Managed by boards and answerable to their Boards of Governors Accountable to Monitor via their ToA Accountable to commissioners via contracts Free to borrow commercially and retain surpluses Independent of DH performance management requirements Autonomous public benefit corporations not subject to Secretary of State direction Maintain, evolve and update regulatory regime / documentation Recommend to Monitor’s Board the need for any formal regulatory action Measure progress towards rectification of any failures (financial or otherwise) Consider the effectiveness of governance and proposed action to rectify the position Continually assess the risk of a foundation trust failing to meet their ToA Ensure foundation trusts comply with their ToA

The risk-based approach
Financial: Ratings 1 and 2 Governance: Red Governance: Eight pillars 1(RAG) Financial: Financial stability (1-5, 5 = low risk) Risk ratings published quarterly (and for annual plan) and indicate the potential that an FT may be in significant breach of Authorisation Monitor assesses the risk of trusts breaching their ToA. Risk of failure to comply is currently split 2 ways: Subsequent regulatory action at discretion of Monitor’s Board 1 Legality of constitution, representative membership, appropriate board roles, service performance, clinical quality/safety, effective risk & performance management, cooperation with NHS bodies & local authorities, provision of mandatory services

If Boards don’t deliver, we take action
Monitor’s intervention process Discussion Diagnosis “Informal” intervention Formal intervention stop services, etc require appointment of advisors change management or leadership

Monitor’s statutory powers
Under Section 52 of the National Health Service Act 2006, Monitor’s Board may require a trust, the directors or board of governors to do, or not to do, specified things where: OR The trust is contravening or failing to comply with any term of its Authorisation or any requirement imposed on it by Monitor, and this contravention/failure is significant The trust has contravened, or failed to comply with any term of its Authorisation and is likely to do so again, and that this contravention/failure is significant Monitor has the power to remove (or suspend or disqualify) any or all directors or members of the board of governors and appoint interim directors or members of the board of governors Monitor can also require trusts to obtain a moratorium or make proposals for a voluntary arrangement with regard to the settlement of debts (Section 53)

MONITOR’S NEW ROLE

Proposed system architecture
SIMPLIFIED Patients and public Support for complaints Publish information Elect Health & Wellbeing Boards Local authorities Elect governors Provide care Register Must be consulted Social enterprise GPs NHS FTs Private providers Fund Local Healthwatch Commission specialist services Commission Enforce minimum standards Commission Promote competition Jointly license Provide information Manage Must be consulted GP consortia Support Provide information Information Centre NICE Monitor Care Quality Commission Health-watch England Authorise Assess Allocate Guide Promote competition Set topics NHS Commissioning Board Direct Advise on standards Agree tariff and pricing Direct Provide information Annual mandate Allocate Secretary of State Provide information Sets minimum quality standards Source: Health and Social Care Bill 2011

Changes to Monitor’s current role
Assessment Compliance development Provider Of course, Monitor welcomes the Government’s intention that we will become the economic regulator for health and adult social care from April In our view, it is right to have an economic regulator which is independent of political influence, can build specialist skills and is transparent in the way it sets prices, promotes competition and deals with market failure. So what do the Government’s plans as announced in the Health and Social Care Bill mean for Monitor? I’d like to start by considering how the plans will impact Monitor’s current role. Starting with our role on assessment: Monitor will be responsible for developing a general licence setting out conditions for all relevant providers of NHS services – I’ll talk more about licensing in a moment. The Health and Social Care Bill proposes that this will replace Monitor's current role in authorising foundation trusts. However, Monitor is likely to continue to act as the registrar for foundation trusts, to ensure that foundation trusts are legally constituted (in line with statutory requirements) and to maintain basic information such as membership of their boards. Turning now to Monitor’s compliance work: Non-financial governance Under the current system, Monitor can intervene to remove the directors and/or governors of a foundation trust and to direct a trust to do specific things in the event of a significant failure. However, in the future, our new role will cover all providers so we will not have special powers over foundation trusts. The Health and Social Care Bill sets out that responsibility for quality will, in future, lie directly with providers. In practice, this means foundation trusts will rely on their own internal governance rather than on external oversight from Monitor, in its current role as regulator of foundation trusts. In order to ensure effective governance without the safety net currently provided by Monitor, the Health and Social Care Bill clarifies responsibilities and makes the directors and governors of a foundation trust more directly accountable for their decisions and for the trust’s performance. It does this by making explicit the duty of governors to hold the board of directors to account, through the chair and non-executive directors (whom they currently have power to appoint and remove). Monitor supports the Government’s long-term aim to make foundation trusts more directly accountable for the results they achieve, and welcomes proposals in the Bill for us to retain transitional intervention powers. However, we believe a step-change is needed in the capability of governors in order to ensure effective governance without the safety net which Monitor currently provides. This is a major development challenge where an early start is needed if it is to be effectively addressed over the next three years. PDC stewardship The Government currently holds an investment stake of £24 billion in foundation trusts and NHS trusts, in the form of public dividend capital and loans. The role of protecting this taxpayer investment in foundation trusts has been undertaken at arm’s length from the Department of Health, by Monitor, since Monitor was created. This has ensured that foundation trusts have genuine freedom from central government control, with a rules-based approach to oversight of taxpayers’ investment which has been free from the risk, or even the perception of a risk, of political interference. The Bill outlines that, in future, the Department of Health will establish an operationally independent banking function which will manage the taxpayers’ investment stake in foundation trusts. Monitor is pleased that the government has recognised that the important job of protecting taxpayers’ interests should be undertaken through an operationally independent banking function. Transferring financial oversight of foundation trusts to the Department of Health without ensuring the operational independence of the function would have been contrary to the overall vision of a devolved healthcare system with less top-down control. It is also important that the Secretary of State is not able to direct the operation of the banking function in order to ensure freedom from political influence in the future. In the long term however, Monitor believes that a separate, statutorily independent body should be established to carry out the ongoing role of protecting tax payers’ investments. Specifically relating to Monitor’s structure moving forward: Monitor is and will remain a non departmental public body. We will still be required to account to central Government for our use of resources and publish annual accounts Monitor will be required to report annually to Parliament to demonstrate value for public money and be accountable to the public through Parliamentary scrutiny, including through select committee inquiries And we will continue to build on our already strong working relationship with CQC Monitor will also be under a duty ensure that its regulatory activities are transparent, proportionate, consistent and targeted only at cases where action is needed. Maintain role until all FT sector Finance – PDC stewardship Finance – continuity of service Governance – safety net Focus on explaining / supporting regulatory regime FT-specific led by the sector

Monitor and economic regulation
Moving now to Monitor’s new role as outlined in the Health and Social Care Bill. Under the Health and Social Care Bill, Monitor will become the economic regulator for health and adult social care. We will license providers of NHS services in England and exercise functions in three areas: regulating prices, promoting competition and supporting service continuity. Monitor will have a duty to promote competition where appropriate, including through its licensing regime and through enforcing competition law. Firstly, on licensing. Providers who wish to provide NHS-funded services will have to be licensed by Monitor, who will assess financial viability and ensure that they are legally constituted and have clear governance arrangements. They will have a joint licence overseen by both Monitor and CQC, to maintain essential levels of safety and quality and ensure continuity of essential services – but the CQC and Monitor will retain separate responsibilities for their parts of the regime. The aim is to ensure a streamlined process that helps to minimise bureaucracy and ensures that regulation of providers is proportionate. Of course, this means that we will have to continue to work closely with our colleagues at the CQC. Monitor will have a range of powers to ensure that providers comply with their licence conditions. These will include the power to fine providers for failing to comply with licence conditions. They may also include the power to suspend or revoke a licence for failure to comply with its conditions. Turning to regulating prices: Monitor will have responsibility for regulating prices for NHS services from April Where price regulation is necessary, Monitor’s role will be to set prices or price caps for NHS funded services, like other economic regulators such as Ofgem (in energy). This is in order to promote fair competition and drive productivity. Although Monitor’s powers to set prices and license providers will only cover publicly-funded health services, these services may of course be delivered by private companies. From 2013/14, price-setting will be the joint responsibility of the NHS Commissioning Board and Monitor; the Board will be primarily responsible for designing the pricing structure, while Monitor will have primary responsibility for setting price levels. Monitor will also have an input into the structure of the payment system. This will be important to ensure that pricing is not dominated by commissioners’ interests. Health has a unique problem in that products are not bought by the end user, as in other sectors. The NHS Commissioning Board will be the closest part of the system to the end-user and it will be responsible for the overall structure of the payment systems. The Bill will create a joint process for setting prices, with Monitor and the NHS Commissioning Board each having primary responsibility for specific aspects of the process, as well as the duty to reach agreement at key stages. In other sectors, price setting has been a key lever for driving up efficiency and quality. Monitor will seek the same benefits through its role in price setting. Turning to supporting service continuity: The Health and Social Bill states that, whereas in the past the response to failure has usually been to prop up the provider as an institution, in future there will be a clear and transparent mechanism for managing provider failure, which protects services for patients but not ineffective management or poor quality care. This will allow commissioners to replace existing services with higher-quality or better value options smoothly and without risk of interruption in access to services for patients. Although primary responsibility for ensuring continuity of services will lie with the NHS Commissioning Board and local commissioners, Monitor will also play a role in ensuring continued access to key services in some cases. The Health and Social Care Bill will give Monitor a broad set of legislative intervention powers, in line with other regulated sectors, to ensure the continuity of designated healthcare services. This includes powers in extreme circumstances to enable Monitor to direct an organisation to take specific actions in order to prevent failure. Providers of essential services may be required to take part in risk-pooling arrangements to ensure that, if a provider becomes financially unsustainable, Monitor will be able to step in and keep essential services running, without having to turn to the Department of Health. The Government has said that it will not provide additional funding for failing providers. Monitor will be able to allow transparent subsidies where these are objectively justified, and agreed by commissioners. Local commissioners, providers and members of the public will be able to engage in discussions about local service delivery and take control of the decision about which services to designate for additional regulation. Monitor will offer guidance and support throughout this process. The process of designating services will start in April 2012 and should be complete in time for April 2013, when the new regime for provider failure is due to come into force. Monitor has for some time been concerned that the existing failure arrangements in health are not satisfactory and welcomes the proposals. And finally, on promoting competition: Monitor’s main duty as outlined in the Government’s plans will be to protect the interests of patients and the public in relation to health and adult social care services, by promoting competition where appropriate, and through regulation where necessary. Monitor’s powers to apply competition law will extend to both publicly and privately funded healthcare, and to social care. However, given the complexity of applying competition law in the NHS, the Government intends to bring Monitor’s powers into force initially only for healthcare, then for adult social care at a date to be decided. The Bill will give Monitor concurrent powers with OFT to apply the Competition Act 1998 in health and adult social care services. This will allow Monitor to investigate practices by individual providers or groups of providers which might restrict competition, such as actions to exclude competitors or agreements to restrict patient choice. Monitor’s role will be to ensure that competition works effectively in the interests of patients and taxpayers. To enable us to do this, like other sectoral regulators, such as Ofcom and Ofgem, Monitor will have concurrent powers with the Office of Fair Trading to apply competition law to prevent anti-competitive behaviour. The Health and Social Care Bill outlines that Competition is one of a number of levers the economic regulator will have to drive down cost and increase quality. However, there are some areas of healthcare where competition may not be appropriate, for example some very specialist care or rural communities; here the role will be to ensure efficiency, innovation and quality through effective regulation. Competition in healthcare is not a new thing in England, although few would argue that it works as effectively as it could. Barriers to market entry and exit, the lack of a level playing field between different providers, difficulties in adjusting supply to match demand, and an inability of providers to respond to fluctuating demand by amending prices, all raise questions about how far competition in healthcare can go. The answer is ‘a lot further than it has gone so far’. The potential benefits of competition for the healthcare sector, which is one of the largest sectors in the UK economy, are vast in terms of raising the productivity of the sector, delivering higher quality care for patients and lower costs for taxpayers. As mentioned, competition has delivered significant benefits in other sectors and has also been shown to improve quality within healthcare. Some of the additional benefits from competition may start to be unlocked by the OFT’s market study of the private healthcare market and the Cooperation and Competition Panel’s study of Any Willing Provider and Choice in the NHS healthcare market, but there will remain significant challenges for Monitor in this sector and gains to be unlocked by competition. Conclusion The Government has set an ambitious timetable and there is a lot of hard work to be done to turn the proposals into reality. However, although the scope of the changes is significant, we will be able to draw and build on the 20 years of experience we now have in competition and economic regulation from organisations such as Ofwat and Ofgem. Critical to ensuring that these reforms come to fruition is that politicians hold their nerve. Monitor is of course keen to rise to this challenge. Once Parliament has had its say, Monitor’s priority will be to ensure that arrangements are put in place as quickly as possible to manage the transition effectively. We are keen to move into the detailed implementation phase. Licensing providers Regulating prices Promoting competition Supporting service continuity Information collection

Monitor and economic regulation
Licensing providers Monitor will license NHS providers assessing financial viability, legality and governance arrangements. joint licence overseen by both Monitor and CQC Monitor can fine providers or suspend or revoke licences Moving now to Monitor’s new role as outlined in the Health and Social Care Bill. Under the Health and Social Care Bill, Monitor will become the economic regulator for health and adult social care. We will license providers of NHS services in England and exercise functions in three areas: regulating prices, promoting competition and supporting service continuity. Monitor will have a duty to promote competition where appropriate, including through its licensing regime and through enforcing competition law. Firstly, on licensing. Providers who wish to provide NHS-funded services will have to be licensed by Monitor, who will assess financial viability and ensure that they are legally constituted and have clear governance arrangements. They will have a joint licence overseen by both Monitor and CQC, to maintain essential levels of safety and quality and ensure continuity of essential services – but the CQC and Monitor will retain separate responsibilities for their parts of the regime. The aim is to ensure a streamlined process that helps to minimise bureaucracy and ensures that regulation of providers is proportionate. Of course, this means that we will have to continue to work closely with our colleagues at the CQC. Monitor will have a range of powers to ensure that providers comply with their licence conditions. These will include the power to fine providers for failing to comply with licence conditions. They may also include the power to suspend or revoke a licence for failure to comply with its conditions. Turning to regulating prices: Monitor will have responsibility for regulating prices for NHS services from April Where price regulation is necessary, Monitor’s role will be to set prices or price caps for NHS funded services, like other economic regulators such as Ofgem (in energy). This is in order to promote fair competition and drive productivity. Although Monitor’s powers to set prices and license providers will only cover publicly-funded health services, these services may of course be delivered by private companies. From 2013/14, price-setting will be the joint responsibility of the NHS Commissioning Board and Monitor; the Board will be primarily responsible for designing the pricing structure, while Monitor will have primary responsibility for setting price levels. Monitor will also have an input into the structure of the payment system. This will be important to ensure that pricing is not dominated by commissioners’ interests. Health has a unique problem in that products are not bought by the end user, as in other sectors. The NHS Commissioning Board will be the closest part of the system to the end-user and it will be responsible for the overall structure of the payment systems. The Bill will create a joint process for setting prices, with Monitor and the NHS Commissioning Board each having primary responsibility for specific aspects of the process, as well as the duty to reach agreement at key stages. In other sectors, price setting has been a key lever for driving up efficiency and quality. Monitor will seek the same benefits through its role in price setting. Turning to supporting service continuity: The Health and Social Bill states that, whereas in the past the response to failure has usually been to prop up the provider as an institution, in future there will be a clear and transparent mechanism for managing provider failure, which protects services for patients but not ineffective management or poor quality care. This will allow commissioners to replace existing services with higher-quality or better value options smoothly and without risk of interruption in access to services for patients. Although primary responsibility for ensuring continuity of services will lie with the NHS Commissioning Board and local commissioners, Monitor will also play a role in ensuring continued access to key services in some cases. The Health and Social Care Bill will give Monitor a broad set of legislative intervention powers, in line with other regulated sectors, to ensure the continuity of designated healthcare services. This includes powers in extreme circumstances to enable Monitor to direct an organisation to take specific actions in order to prevent failure. Providers of essential services may be required to take part in risk-pooling arrangements to ensure that, if a provider becomes financially unsustainable, Monitor will be able to step in and keep essential services running, without having to turn to the Department of Health. The Government has said that it will not provide additional funding for failing providers. Monitor will be able to allow transparent subsidies where these are objectively justified, and agreed by commissioners. Local commissioners, providers and members of the public will be able to engage in discussions about local service delivery and take control of the decision about which services to designate for additional regulation. Monitor will offer guidance and support throughout this process. The process of designating services will start in April 2012 and should be complete in time for April 2013, when the new regime for provider failure is due to come into force. Monitor has for some time been concerned that the existing failure arrangements in health are not satisfactory and welcomes the proposals. And finally, on promoting competition: Monitor’s main duty as outlined in the Government’s plans will be to protect the interests of patients and the public in relation to health and adult social care services, by promoting competition where appropriate, and through regulation where necessary. Monitor’s powers to apply competition law will extend to both publicly and privately funded healthcare, and to social care. However, given the complexity of applying competition law in the NHS, the Government intends to bring Monitor’s powers into force initially only for healthcare, then for adult social care at a date to be decided. The Bill will give Monitor concurrent powers with OFT to apply the Competition Act 1998 in health and adult social care services. This will allow Monitor to investigate practices by individual providers or groups of providers which might restrict competition, such as actions to exclude competitors or agreements to restrict patient choice. Monitor’s role will be to ensure that competition works effectively in the interests of patients and taxpayers. To enable us to do this, like other sectoral regulators, such as Ofcom and Ofgem, Monitor will have concurrent powers with the Office of Fair Trading to apply competition law to prevent anti-competitive behaviour. The Health and Social Care Bill outlines that Competition is one of a number of levers the economic regulator will have to drive down cost and increase quality. However, there are some areas of healthcare where competition may not be appropriate, for example some very specialist care or rural communities; here the role will be to ensure efficiency, innovation and quality through effective regulation. Competition in healthcare is not a new thing in England, although few would argue that it works as effectively as it could. Barriers to market entry and exit, the lack of a level playing field between different providers, difficulties in adjusting supply to match demand, and an inability of providers to respond to fluctuating demand by amending prices, all raise questions about how far competition in healthcare can go. The answer is ‘a lot further than it has gone so far’. The potential benefits of competition for the healthcare sector, which is one of the largest sectors in the UK economy, are vast in terms of raising the productivity of the sector, delivering higher quality care for patients and lower costs for taxpayers. As mentioned, competition has delivered significant benefits in other sectors and has also been shown to improve quality within healthcare. Some of the additional benefits from competition may start to be unlocked by the OFT’s market study of the private healthcare market and the Cooperation and Competition Panel’s study of Any Willing Provider and Choice in the NHS healthcare market, but there will remain significant challenges for Monitor in this sector and gains to be unlocked by competition. Conclusion The Government has set an ambitious timetable and there is a lot of hard work to be done to turn the proposals into reality. However, although the scope of the changes is significant, we will be able to draw and build on the 20 years of experience we now have in competition and economic regulation from organisations such as Ofwat and Ofgem. Critical to ensuring that these reforms come to fruition is that politicians hold their nerve. Monitor is of course keen to rise to this challenge. Once Parliament has had its say, Monitor’s priority will be to ensure that arrangements are put in place as quickly as possible to manage the transition effectively. We are keen to move into the detailed implementation phase. Regulating prices Monitor will have responsibility for regulating prices for NHS services from April 2013 from 2013/14, price-setting responsibility shared with NHS CB Monitor has primary responsibility for setting price levels. Promoting competition Monitor’s responsible for ensuring that competition works in the interests of patients and taxpayers concurrent powers with the Office of Fair Trading to apply competition law ensure efficiency, innovation and quality where competition may not be appropriate, (e.g specialist care, or rural communities) Supporting service continuity Mechanism to manage any provider failure, ensure security of healthcare services Primary responsibility for continuity of services lies with NHSCB, commissioners Monitor will play a role in ensuring continuity of certain key services Providers of essential services may be required to take part in risk-pooling arrangements

Timeline April 2011 April 2012 April 2013 April 2014 April 2015
DH work-plan to be published to map out trajectory for non-foundation trusts Early 2011 Provider Development Authority will encourage trusts towards FT status application Until 31st March 2014 Monitor to assess all remaining 120 FTs By April 2014 Final applications for FT status by now 31 Mar 2014 Monitor to retain its intervention powers for newly authorised FTs and subset of others April 2012 – April 2016 (2 years post authorisation) Monitor has no powers to scrutinise / intervene in FT governance: registrar function only April 2012 for most trusts. By April 2016 for all trusts. Monitor to assume role as economic regulator 31 Mar 2012 Non FT status to cease to exist April 2014 New regime for provider failure due to come into force DH responsible for failure regime to April 2013 Monitor to undertake process of designating services April 2012 – April 2013 New banking function to take on role of protecting taxpayers’ interests in foundation trusts TBC

GOVERNORS: CURRENT AND FUTURE ROLE

Governors: the statutory responsibilities
Appoint and, if appropriate, remove the chair Appoint and, if appropriate, remove the other non executive directors Decide the remuneration and the other terms and conditions of the chair and the other non executive directors Approve the appointment of the chief executive Appoint and, if appropriate, remove the auditor Receive the annual accounts, any report of the auditor on them and the annual report In addition the directors must have regards to the views of the governors when preparing the forward plan

And various non-statutory roles
Representing the interests of the members and partner organisations in the local health economy Holding the board of directors collectively to account for the performance of the trust Feeding back information about the trust to constituencies and stakeholder organisations who appointed them Other roles such as working with LINks, working with hospital volunteers, giving talks to members and other stakeholders, developing and reviewing the membership strategy and holding constituency meetings

Governors – future role
The Health and Social Care Bill will: Make explicit the duty of governors to hold the board of directors to account, through the Chair and Non-Executive Directors Give governors power to require some or all of the executive directors to attend a meeting Extend to FT directors the duties imposed under company law, e.g. The requirement to promote the success of the organisation Require FTs to hold an annual general meeting for its members: to discuss annual report, accounts and executive pay FT governors will need to agree any merger, acquisition, separation or other change that the FT’s constitution defines as significant FTs to be responsible for supporting governors to fulfil their role

Organisational accountability
Recent significant breaches have displayed a number of common governance failures… Issues evidenced at trusts in significant breach Seen at…. Strategic awareness Inability to identify material risks to compliance with authorisation Poor quality plans, or plans lacking credibility 1 4 5 7 8 9 1 3 6 7 9 10 Organisational accountability 1 3 6 7 9 Significant failure to deliver plan without credible mitigating factors 7 8 9 Failure to maintain appropriate assurance processes 1 Failure to maintain appropriate financial controls 2 Shaping culture Leadership failure underpinning material breach of authorisation Failure to properly assess quality risk of financial initiatives 10 Board performance Board lacks the requisite skills, competencies and experience and has not acted to address this Insufficient challenge at board level Failure to act proactively to address material breaches of authorisation 1 3 5 5 4 6 9 Key: 1 RNHRD 2 Mid Staffs 3 HWPH 4 Colchester 5 Gloucester 6 Basildon 7 Dudley 8 Wigan 9 Milton Keynes 10 Poole Source: regulatory letters to FTs in significant breach

How aware are Governors of their prospective change in role?
% Fully aware 50.5% Slightly aware 32.9% Not really aware 10.4% Not at all aware 5.3% Not sure 0.9%

And how ready to take on additional responsibility?
% Yes fully prepared 63.6% Not sure 21.1% Not at all prepared 3.0% Would want further training 11.2% Don’t know 1.0%

CASE STUDIES

BRIDGING THE GAP

How are we going to bridge the gap?
Ideas from the room..

How are we going to bridge the gap?
Working with your Boards: Putting in place what works for you May be very different from another trust Communication is key Training providers: As provided by the trust – statutory duty FTN, FTGA Possible national coordination, but unclear at this point National guidance: From DH, regulators Other: Networking with other FTN governors Networking with school governors, LINks etc

APPENDIX

Reporting I: annual submissions
Financial plans Medium term strategy Membership data & strategy Self certifications Mandatory services & education and training provision Plans should cover the next three years and will be the basis of monitoring in-year performance Monitor will use plan information to generate trusts’ annual risk ratings and borrowing limits

Regulatory documents (1)
Mandatory Compliance Framework Monitor consults and updates this annually NHS Foundation Trust Annual Reporting Manual Prudential Borrowing Code (PBC) Additional Guidance Applying for a Merger Involving an NHS Foundation Trust: Guide for Applicants Audit Code for NHS Foundation Trusts Variation of the Terms of Authorisation: Guidance for NHS Foundation Trusts NHS Foundation Trust Accounting Officer Memorandum Guidance for NHS Foundation Trusts on Co-operating with NPfIT

Regulatory documents (2)
Best practice advice: Managing Operating Cashflow in NHS Foundation Trusts NHS Foundation Trust Code of Governance NHS Transactions Manual NHS Foundation Trust Model Core Constitution Risk Evaluation for Investment Decisions Information on Service Line Reporting and Service Line Management

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