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Monitor and NHS Foundation Trusts London Scrutiny Network 14 November 2008 William Moyes

Monitor and NHS Foundation Trusts London Scrutiny Network 14 November 2008 William Moyes Executive Chairman Monitor. Agenda. 1. NHS foundation trusts - context - accountabilities - performance 2. Monitor’s role - assessment - compliance

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Monitor and NHS Foundation Trusts London Scrutiny Network 14 November 2008 William Moyes

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  1. Monitor and NHS Foundation Trusts London Scrutiny Network 14 November 2008 William Moyes Executive Chairman Monitor

  2. Agenda • 1. NHS foundation trusts • - context • - accountabilities • - performance • 2. Monitor’s role • - assessment • - compliance • 3. The foundation trust governance model • - members • - governors • 5. How we work together…

  3. NHS foundation trusts • Monitor’s role • The foundation trust governance model • How we work together…

  4. A devolved healthcare system • Purchasing • Payments • Provision • Policy, national standards andbudget setting DH SHA • Performance • Management • Operational space • Transactions • PbR • Contracts • Purchasers • NHS commissioners(distinct from PCTs) • Patient choice • Providers • Primary care providers • NHS foundation trusts** • Independent sector Monitor • Stewardship • Consumer protection CQC CQC

  5. DH Commissioning Local Views Governors FT Parliament Probity/ Value / Performance NHS foundation trusts: accountability structure Parliament FTs are accountable locally, to the regulator, and to Parliament. SoS has no power to direct FTs Ministers SHA PCT Compliance with ToA Contracts Monitor Members Monitor has powers to - Replace Boards - Require Action if they breach ToA

  6. NHS foundation trusts are independent public bodies Nature Freedoms • Public benefit corporations – not for profit • Primary business is health care (for NHS) • Public money – majority investor, majority income • Retain surpluses • Borrow commercially • Decide own strategy and services • Negotiate staff contracts

  7. Main obligations of an NHS foundation trust • Exercise its functions effectively, efficiently and economically • Comply with its constitution • Comply with the terms of its contracts with commissioners • Compliance with any guidance issued by Monitor. This includes Monitor’s Compliance Framework, which identifies the key national targets and standards set out in the Operating Framework with which trusts must comply. • Provide identified mandatory goods and services • Provide identified mandatory education and training • Remain a going concern • Comply with its private patient income cap AND Co-operate with other NHS bodies and local authorities

  8. have over 1.2 million members • employ over 300,000 staff NHS foundation trusts: current position 107 NHS foundation trusts authorised as at 1 October 2008 • deliver c. £20 billion of services • 44% of acute trusts and 54% of mental health trusts are now NHS foundation trusts “It is our clear ambition that in future hospital care will be provided by NHS foundation trusts.” - Lord Darzi, NHS Next Stage Review

  9. NHSFTs are increasing their profitability…

  10. …have reduced MRSA rates overall year-on-year… 29% reduction 89 Foundation trusts 2006/7 89 Foundation trusts 2007/8 29% reduction Total number of MRSA cases 89 Foundation trusts 89 Foundation trusts 2008/9 Actual 2007/2008 Actual 2006/2007

  11. …and perform well against Healthcare Commission standards • Of 42 trusts rated ‘excellent’ for both quality of services and use of resources, 38 were FTs • 52% of FTs were rated ‘excellent’ for quality of services Annual Health Check 2007-08 • 75% of FTs were in best & better performing categories Maternity review • 21 out of top 30 trusts are FTs • All top 5 trusts are FTs Acute inpatient survey Healthcare Commission self declaration on core standards 2007-08 • 72% of FTs declared full compliance against all standards • Higher percentage of FTs declaring full compliance with all core standards than last year

  12. NHS foundation trusts • Monitor’s role • The foundation trust governance model • How we work together…

  13. Five key functions of Monitor • Assessment • Assess applications for FT status and issue authorisations • Approve mergers between FTs • Compliance • Assess annual plans • Award risk ratings • In-year monitoring • Prevent withdrawal of services and disposal of essential assets • Intervention • Intervene if FT has significantly breached Authorisation • Act on Healthcare Commission ‘special measures’ • Information & assurance • Set financial reporting framework and audit code • Present consolidated accounts to Parliament • Publish performance data quarterly • FT development • Provide support on FT development eg governance code and service line management • Contribute to operating framework, model contract and implementation of Payment by results

  14. Monitor’s authorisation process • Two year working capital review • Review of long term (5 years) strategy and finances Business plan review Review of governance aspects: - Legally constituted • Effectively governed Governance review • Assessors pressure-test assumptions and forecasts • Independent advisors involved • Board-to-Board meetings Robust challenge process Possible outcomes - Authorisation - Rejection - Deferral

  15. Compliance regime: light touch, risk based, proportionate and low cost • Philosophy • Components of Compliance Framework • Annual plan • Risk evaluation and ratings • Finance • Governance • Mandatory services • 1. Annual • assessment • & risk rating • Self-regulation • Proportionality • Transparency • 2. Robust • in year • monitoring • Regular reports • Exception reports • Intelligence network • Trust-based approach • Confidentiality • Authorisation is not a licence • Monitor can use statutory powers to require specific actions if: • FT in danger of breaching / has breached its Authorisation • failure is ‘significant’ • 3. Intervention • Minimal duplication of regulation • Minimal information requirements

  16. FT Boards are the frontline of regulation… They need to: • understand all aspects of trust performance (financial, operational, clinical) • identify and address problems swiftly, decisively and knowledgably • create a culture where quality and safety are taken seriously • The board’s duties do not end with financial stewardship. • Boards must oversee: • Overall Mission – Vision, Values, Aims & Priorities • Strategy • Leadership • Quality • Safety • Patient Satisfaction The board’s responsibility for ensuring and improving care cannot be delegated to the medical staff and executive leadership.

  17. …but if Boards don’t deliver, we take action • Monitor’s intervention process • Discussion • Diagnosis • “Informal” intervention • Formal intervention • stop services etc • require appointment of advisors • change management or leadership

  18. Intervention – formal and informal In the last four years we have intervened on nearly 30 occasions*, both formally and non-formally, on both financial and non-financialissues Informal: Board functionality Formal interventions Informal: Financial Informal: Service Delivery • UCLH • City Hospitals Sunderland • Homerton • RNHD • Moorfields • Countess of Chester • Gateshead • Sherwood Forest • Tavistock and Portman • Royal Devon & Exeter • Peterborough & Stamford • Derby P’borough & Stamford Poole Hospital Moorfields Mid Staffordshire Moorfields Lancashire Teaching Clatterbridge Calderdale and Huddersfield Doncaster & Bassetlaw Gloucestershire Hospitals Royal Marsden Peterborough & Stamford • RNHRD (2008) • Bradford (2004) * On some occasions more than once at the same trust

  19. NHS foundation trusts • Monitor’s role • The foundation trust governance model • How we work together…

  20. The NHS foundation trust governancemodel • The board of directors: the chair of the board of directors also acts as the chair of the board of governors. Board of governors: elected by members to represent patients, public, staff. Also includes appointed representatives from organisations in the local community. • Members: patients, service users, staff, and the general public from the local community.

  21. NHS foundation Trust members • FTs are accountable locally to patients, staff and communities through their membership and boards of governors. This local accountability is key to the FT policy. • Between them, FTs have over 1.2 million members and The PM has said he wants to see 3 million FT members by 2012 • Monitor’s Compliance Framework requires FT to demonstrate they are developing a representative membership by providing information on membership size and movements, and analysis of current membership  

  22. NHS foundation trust governors • FTs’ accountability to their local community comes via their board of governors as well as through membership. The majority of an FT’s board of governors must be elected by public members. • Foundation trusts have approximately 3,400 governors • Board of governors on average comprises between 25 and 40 representatives and is likely to be made up of: • Public governors (51-55%) must form the majority. Can include patients, carers & service users • Staff governors (15-20%) must have at least three • PCT (5%) must appoint a governor from a PCT it provides services for • Local authority (5%) at least one governor must be appointed from one or more local authority • Appointed governors (15-20%) e.g. universities; local constabulary; voluntary services groups; Job Centre

  23. Foundation trust governors havesignificant statutory powers: • • appoint or remove the chair and non-executive directors; • • approve the appointment of the chief executive; • • decide the remuneration and allowances, and other terms and • conditions of office, of the chair and other non-executive directors • • appoint or remove the trust’s auditor; • • receive the trust’s audit report; and • • scrutinise the trust’s annual plan.

  24. NHS foundation trusts • Monitor’s role • The foundation trust governance model • How we work together…

  25. OSC can report to Monitor on any of these issues: • inadequate consultation • variation to ToA not in the interests of the • local community • FT not co-operating with local authorities Report OSCs review and scrutinise any matter relating to the planning, provision and operation of health services in the area of the committee’s local authority Regulate Scrutinise FT Consult • FT must consult with OSC if it wishes to vary its • ToA to result in a substantial change to the pprovision of goods or services • Must respond to any report or recommendation pmade by OSC within 28 days The big picture: how we work together • OSC • Monitor • Monitors compliance with ToA • (including co-operation with local • authorities) • Approves changes to ToA • Can compel FT to consult further • with OSC

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