15 December 2006
Foundation trusts' financial performance in the first half of this year was better than expected, but they should be prepared for a tougher second six months, their regulator Monitor said this week.
Foundations produced an aggregate surplus of £36m in the period up to September 30 – £25m more than planned.
Their financial clout was demonstrated again this week as the Heart of England Foundation Trust's acquisition of the financially troubled Good Hope Hospital moved a step nearer.
It could be completed by April 1 and foundations believe many more acquisitions will follow as non-foundations seek a way to recover their deficits.
Despite their strong overall performance, 11 were in deficit. The biggest remains at University College Hospital London but Monitor was satisfied with its recovery to date – it had reduced its deficit from £36m at the end of March to £9m at the end of September. Thirty-seven trusts had surpluses.
However, Monitor said problems were looming. Foundations continue to be in dispute with primary care trusts over payments for patient treatment above the levels specified in contracts.
As a result, provision for bad debts increased by £13.3m to £25.9m. The regulator said the number of non-emergency patients could fall as PCTs try to cut their deficits later in the year.
A Monitor spokesman told Public Finance: 'We are aware the PCTs have their own funding issues and for this reason we would expect that demand may be managed in the remainder of the year to bring activity in line with planned levels.'
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