25 November 2005
Deficits in foundation trusts are almost twice as large as those in NHS trusts, the first year's consolidated accounts from the regulator Monitor has revealed.
The first year's accounts show that the 25 foundation trusts that have been in operation for more than six months ran up an accumulated deficit of £37m between April 2004 and March 2005, representing 0.9% of their income. NHS trusts are £250m in deficit, representing 0.5% of their annual income.
Yet a spokesman for Monitor said the accounts showed that foundation trusts were strengthening their finances, adding that, unlike NHS trusts, they did not have a duty to break even and were allowed to go into deficit to fund strategic investment.
Monitor also emphasised that the trusts only moved into deficit after they paid £97m of capital charges to the Department of Health on the value of their fixed assets.
Seven out of the 25 foundation trusts failed to meet all the national targets on issues such as waiting lists. These were: Barnsley, Basildon and Thurrock, Cambridge, Derby, Gloucester, Heart of England and Liverpool Women's. Monitor has requested details of their plans to improve their performance.
Bill Moyes, Monitor executive chair, said: 'Our review shows that NHS foundation trusts have made a sound start and laid the foundations for improving services to patients… there is sound evidence already that they are using their operational and financial freedoms to improve services.'
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