News / Monitor ‘not raising bar’ for FTs

Foundation trust regulator Monitor has insisted that the increase to its downside efficiency assumptions does not mean a raising of the bar for would-be FTs.

The regulator announced revised assumptions at the end of April to be used in assessing FT applications and for risk rating investments undertaken by FTs.

Chief operating officer Stephen Hay told Healthcare Finance that the changes reflected the current economic outlook and policy framework.

‘By changing our assumptions we are not raising the bar for applicant trusts or telling them to make cuts. We are maintaining the standards of financial viability required to achieve foundation trust status,’ he said.

‘We acknowledge that these are more testing circumstances than in previous years, but we are asking applicants to plan for conditions that will also apply to existing foundation trusts.’

The changes mean the assessor case assumes an efficiency requirement of 4.7% compared with the previous 4%, while the downside assumption jumps from 4.5% to 6.5% (rising to 7.1% in 2015/16).

The assumptions take account of an updated view on cost pressures plus the potential impact of policy changes such as the continued use of a marginal rate for emergency activity and new readmission penalties.

Rather than raising the bar for aspirant FTs, Mr Hay said failure to change the assumptions would have effectively been ‘lowering the bar and increasing the risk of failure’.

However, he said that if an individual provider could mitigate against the risks and this was ‘backed up by evidence-based planning’, this would be taken into account in the assessment.

l Stephen Hay will address the HFMA?FT Finance conference in Brighton on 23-24 June. Details at www.hfma.org.uk