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

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Presentation on theme: "PRESENTATION Monitor’s current and future roles: a gap analysis Monitor’s current and future roles: a gap analysis Patrick Fraher Senior Policy Advisor."— Presentation transcript:

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

2 Agenda Monitor’s current roleMonitor’s future roleGovernors’ current and future rolesCase studiesDiscussion: how to bridge the gap

3 MONITOR’S CURRENT ROLE

4 4 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

5 5 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

6 6 Our core functions There are currently three main strands to our work: 1.Assessment: Determining whether a trust is ready to become an NHS foundation trust; 2.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.

7 7 Assessment We receive and consider applications from NHS trusts seeking foundation status and look at three areas: 1.Is the trust well governed with the leadership in place to drive future strategy and improve patient care? 2.Is the trust financially viable with a sound business plan? 3.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.

8 8 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.

9 9 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.

10 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 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 Role of Monitor’s compliance team is to:Foundation Trusts are: Why do compliance?

11 The risk-based approach 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 Financial: Ratings 1 and 2 Governance: Red Financial: Ratings 1 and 2 Governance: Red Governance: Eight pillars 1 (RAG) Financial: Financial stability (1-5, 5 = low risk) 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

12 12 If Boards don’t deliver, we take action Monitor’s intervention process 1.Discussion 2.Diagnosis 3.“Informal” intervention 4.Formal intervention stop services, etc require appointment of advisors change management or leadership

13 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)

14 MONITOR’S NEW ROLE

15 Proposed system architecture 15 Secretary of State NHS Commissioning Board GP consortia Patients and public Social enterprise GPsNHS FTs Private providers Monitor Care Quality Commission NICE Information Centre Health- watch England Sets minimum quality standards Agree tariff and pricing Annual mandate Allocate Authorise Assess Allocate Guide Commission Manage Jointly license Promote competition Provide information Enforce minimum standards Register Provide care Direct Commission specialist services Provide information Commission Promote competition Set topics Advise on standards Elect governors Local authorities Local Healthwatch Support Health & Wellbeing Boards Fund Must be consulted Provide information Publish information Must be consulted SIMPLIFIED Source: Health and Social Care Bill 2011 Elect Support for complaints

16 Changes to Monitor’s current role AssessmentCompliance Provider development Finance – PDC stewardship Finance – continuity of service Governance – safety net Maintain role until all FT sector Focus on explaining / supporting regulatory regime FT-specific led by the sector

17 Changes to Monitor’s current role AssessmentCompliance Provider development Finance – PDC stewardship Finance – continuity of service Governance – safety net Maintain role until all FT sector Focus on explaining / supporting regulatory regime FT-specific led by the sector

18 Monitor and economic regulation Licensing providers Regulating prices Promoting competition Supporting service continuity Information collection

19 Monitor and economic regulation Licensing providers Regulating prices Promoting competition Supporting service continuity 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 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. 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) 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

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

21 GOVERNORS: CURRENT AND FUTURE ROLE

22 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

23 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

24 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

25 Recent significant breaches have displayed a number of common governance failures… 2525 Strategic awareness Organisational accountability Shaping culture Issues evidenced at trusts in significant breach Board performance Significant failure to deliver plan without credible mitigating factors Leadership failure underpinning material breach of authorisation Failure to properly assess quality risk of financial initiatives Inability to identify material risks to compliance with authorisation Poor quality plans, or plans lacking credibility 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 Failure to maintain appropriate assurance processes Seen at…. Source: regulatory letters to FTs in significant breach Failure to maintain appropriate financial controls RNHRDMid StaffsHWPHColchesterGloucester BasildonDudleyWiganMilton KeynesPoole Key:

26 How aware are Governors of their prospective change in role? % Fully aware50.5% Slightly aware32.9% Not really aware10.4% Not at all aware5.3% Not sure0.9%

27 And how ready to take on additional responsibility? % Yes fully prepared63.6% Not sure21.1% Not at all prepared3.0% Would want further training11.2% Don’t know1.0%

28 CASE STUDIES

29 BRIDGING THE GAP

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

31 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

32 APPENDIX

33 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 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

34 Regulatory documents (1) Mandatory Compliance Framework Monitor consults and updates this annually Compliance Framework Monitor consults and updates this annually NHS Foundation Trust Annual Reporting Manual Prudential Borrowing Code (PBC) 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

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


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