Feature / Introduction to...performance management (trusts)

The NHS Performance framework was introduced in 2009 and applies to acute, ambulance and mental health trusts (non-foundations). Each organisation is given two equally weighted ratings – one for finance and one for quality of services. In 2012/13 it is based largely on existing national indicators and mandatory data collections.

The finance assessment is based on data from the Financial information and management system (FIMS), submitted quarterly. The Department of Health uses the data to report the NHS revenue and capital position to Parliament and the public in The Quarter.

The finance indicators are divided into five sub-domains: forecast outturn (40% weighting); year-to- date financial performance (25%); financial processes and balance sheet efficiency (20%); underlying financial position (10%); and initial planning (5%).

The framework was applied on a quarterly basis but from 2012/13 it is applied monthly. This is to closely align the framework with monthly assessment of trusts’ progress on their tripartite formal agreements (TFAs) – which describe their path to gaining foundation status.

The framework results inform the TFA rating (red, amber or green). Results for both ratings are published in The Quarter.

The TFA and performance framework ratings are combined to categorise trusts as ‘performing’, ‘performance under review’ or ‘underperforming’. Where the framework scores a trust as ‘performance under review’ in either domain, PCTs must intervene. SHAs lead the remedial intervention if a provider is categorised as ‘underperforming’.

There are several overriding rules. For example, if an acute trust is forecasting a year-end operational deficit greater than plan or is unable to make loan repayments due to lack of cash, it cannot score higher than ‘underperforming’. If a trust’s year to date operational deficit varies adversely from plan by 2% or £5m, whichever is smaller, the best it can achieve is ‘performance under review’. This is also the case if it is forecasting a year-end operational deficit less than or equal to plan.

The Department has told SHAs that the performance framework does not discharge them from other duties. If, say, an organisation is performing under the framework but the SHA has lost confidence in its board, the SHA can intervene to address the problem.