29 August 2008
NHS foundation trusts are aiming to make surpluses totalling £339m this financial year — more than 90% up on last year's predicted levels, the regulator Monitor has revealed.
The largely autonomous NHS bodies are set to spend the excess cash on service improvements, takeovers and competing to provide primary care services.
Monitor's Review of NHS foundation trusts' annual plans 2008/09 is based on the projections produced by 89 trusts that had secured foundation status by March 31. It said the 89 planned a total surplus of £339m, compared with the £177m predicted by 69 trusts last year.
But this year's expected figures are below the sum of £560m actually retained by the foundations at the end of 2007/08. Monitor said the £383m difference between last year's planned and actual surplus figures was largely because commissioners had referred more patients than the minimum numbers stipulated in contracts.
However, in this financial year, reduced activity levels, reflecting commissioners' attempts to shift patients from hospital to primary care settings, would mean an increase in total revenues of only 1%, the regulator said.
The 89 foundations also held almost £2.3bn in total cash balances at March 31, a figure that is expected to be cut to £1.8bn by the end of the financial year.
Monitor's report said a substantial chunk of this was set to be invested in major capital projects. It cited Guy's and St Thomas' Foundation Trust's plan to pump £287m into improving its estate over the next three years.
Foundation trusts were also looking to expand into new areas, with some 'positioning themselves to compete for and then deliver' primary care services, the report noted. 'Mergers and acquisitions are also planned to underpin strategic development and
delivery of expanded or diversified services,' it added.
Sue Slipman, director of the Foundation Trust Network, said the larger planned surpluses were to be expected because foundations were now more mature organisations and were making greater efficiencies.
But the trusts were also planning to cope with 'risks in the system', including the advent of financial penalties for missing government targets and the unpredictable effects of the Patient Choice scheme.
'They are certainly not investing the whole of their surpluses — that wouldn't be prudent. But they are... investing reasonable sums,' she said.
Monitor's executive chair, William Moyes, said: 'Evidence emerging from several trusts suggests they are beginning to better understand risks and potential opportunities, and design increasingly ambitious plans.'
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