MPs cast doubt on Monitor’s effectiveness

4 Jul 14
The Public Accounts Committee has cast doubt on the effectiveness of Monitor as the regulator of foundation trusts after warning that the number of hospitals getting in financial difficulty was growing.

By Richard Johnstone | 4 July 2014

The Public Accounts Committee has cast doubt on the effectiveness of Monitor as the regulator of foundation trusts after warning that the number of hospitals getting in financial difficulty was growing.

Financial pressuresbeginning to hit services in England, a King’s Fund quarterly survey has found.

Examining Monitor’s work regulating foundation trusts – which was its main duty before the government’s Health and Social Care Act expended its remit in April 2013 – committee chair Margaret Hodge said it had to get better at taking action in trusts at risk of failure.

‘Over a quarter of foundation trusts, 39 out of 147, were predicted to be in deficit at the end of 2013/14, evidence of the increasing financial challenges they are facing,’ she said.

‘By December 2013, 25 trusts – one in six – were in breach of the conditions set when they were awarded foundation trust status.

‘These trusts are suffering from serious financial pressures, poor leadership or both, and some have been allowed to go on struggling for more than four years.’

Much faster intervention should be taken, the PAC concluded, with quicker investigations and faster, more decisive turnaround action.

The watchdog’s job was becoming harder as more foundation trusts get into difficulty, but Hodge also warned that its effectiveness was also being undermined by a lack of frontline NHS experience.

‘Only seven of Monitor’s 337 staff have a clinical background and only 21 have experience of running or working in the NHS, which damages Monitor’s credibility and ability to diagnose problems and develop solutions.’

As a result, the body was spending £9m of its annual £48m budget on consultants to fill gaps in expertise, and MPs highlighted recruitment was being hindered by different terms and conditions of service at the watchdog than in the NHS.

This inhibited integration, the Monitor: regulating NHS foundation trusts report stated, as the regulator struggled to recruit staff with a health background due to the inability to transfer accrued NHS pension rights. The committee called on the Department of Health, in conjunction with the Cabinet Office and Treasury, to remove these disincentives.

Hodge also warned that the expansion in Monitor’s remit to include a wider duty to protect and promote the interests of patients and ensure service continuity could be dangerous.

‘This creates a risk of actual or perceived conflicts of interest. For example, in setting prices for NHS-funded care, Monitor will need to balance its responsibility to support the financial viability of NHS foundation trusts with the objective of promoting more care outside hospitals in the community in the interests of patients.

‘Monitor must demonstrate how it will prioritise the protection of patients’ interests above those of NHS foundation trusts, to allay concerns that its new responsibilities are conflicting.’

Responding to the report, Monitor chief executive Dr David Bennett said the committee highlighted the difficult issues the NHS faced as rising public demand and expectations of healthcare put pressure on the budget. He has already highlighted that the NHS faces a £30bn funding challenge.

‘As the regulator, Monitor is not responsible for the tough financial circumstances in which trusts find themselves,’ he said.

‘Although the foundation sector as a whole is currently in surplus, a minority of trusts do face complex operational and leadership challenges, including issues about the quality of care patients receive. We are working hard with our NHS partners to support trusts in solving all these problems.’

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