Monitor’s role and the new licence for NHS providers 2 October 2012

1. Monitor’s role and the new licence for NHS providers2 October 2012 Sue Meeson Director of Public Affairs and Communications

2. Outline • How Monitor’s role is changing • The new provider licence • How this will affect NHS foundation trusts

3. Health and Social Care Act 2012 Monitor (pre 2012 Act) Monitor (post 2012 Act) Responsible for FT assessment, governance and financial standards Main duty: to protect and promote the interests of people who use health care services Monitor is changing

4. Health and Social Care Act 2012 Monitor (pre 2012 Act) Monitor (post 2012 Act) Core activities Assess NHS Trusts for FT status Regulate FTs by ensuring leaders focus on strong governance and financial viability • Achieve main duty by: • Promoting provision of health care • which is effective, efficient and economic, and • which maintains or improves the quality of services. Monitor is changing

5. Health care oversight system Monitor (incl. CCP) Care Quality Commission Professional Regulators Protection of the public and patients National Institute for Health & Clinical Excellence NHS Commissioning Board Department of Health NHS Trust Development Authority

6. Monitor’s responsibilities Health and Social Care Act 2012 Monitor FTs Pricing Choice and competition Integrated care Continuity of services Enabled through the New Provider Licence

7. Patient interest central to every decision • Protect and promote interests of people who use health care services • Areas of particular interest to patients • Choice and competition • Integrated care • Safeguard protected services

8. Why the licence matters Main duty Provider licence • Places obligations on providers of NHS services, related to our responsibilities to • Set prices, with NHS CB, for NHS-funded care • Enable integrated care • Prevent anti-competitive behaviour which is against the interests of patients • Support commissioners to maintain service continuity • Oversee governance of FTs • To protect and promote the interests of people who use health care services • Key part of this is the provider licence

9. Aging population Patients Pressures on public finances Patient / public expectations Technological developments Context for licence • Help ensure provision of NHS health care is economic, efficient and effective, while quality is maintained or improved • Important in • protecting a world class NHS • dealing with pressures and challenges

10. Licence framework • Licence delivers a regulatory framework to achieve economic, effective and efficient provision • Each component is important, and the components interact with each other Example: Pricing creates incentives to efficiency and effectiveness of integrated care Pricing Integrated care Example: Pricing incentives will have no impact if providers are always given financial support : a continuity of service regime is needed Continuity of service Choice and competition Example: patient choice can drive up quality by making providers more responsive to patient needs

11. New provider licence obligationsConsultation – 31 July to 23 October 2012 General Integrated Care Pricing Choice and Competition Governance for FTs Continuity of Services

12. General conditions Pay fees if requested Provide and publish information Directors and Governors are fit and proper persons Apply transparent eligibility and selection criteria Operate effectively, efficiently and economically Information Pay fees Ensure Criteria 3 Es

13. Pricing conditions Engage with commissioners on local modifications to the tariff Comply with Monitor’s National Tariff document Record and provide information (including cost data) Audit information to ensure accuracy of data Information Assurance Comply Engage

14. Integrated care conditions Allows providers and commissioners to develop approach to suit local patients’ needs Positive obligation to take all reasonable steps Three options Broad prohibition - not do anything detrimental Prohibition on blocking integrated care A B C Prefer B

15. Choice and competition conditions Avoid anti-competitive agreements and conduct Give information and respect rights to choose FTs notify OFT of planned mergers Choice Competition Mergers

16. Continuity of services conditions Prudent financial management Early warning of provider distress/failure Commissioners to plan for provider distress/failure Protected services in event of provider failure Resources remain available for protected services Incentivise Ensure Provide Support Safeguard

17. Foundation trust conditions XXX XXX XXX XXX Provide information for FT registrar Registration Fees Pay fees for FT registrar role, if requested Information Provide information to advisory panel Maintain good governance practices Governance

18. Implications for NHS FTs • FT licences issued automatically April 2013 • No need to apply Licences April 2013 • Licence replaces Terms of Authorisation • Commissioner Requested Services initially same as mandatory services • Conditions on governance - FTs only Points of interest

19. Implications for NHS Trusts • NHS Trusts exempt under DH proposals • New FTs issued licenses instead of Terms of Authorisation when authorised as FTs Licences April 2014 onwards • Overseen by NHS Trust Development Agency (NTDA) • Expected to meet standard conditions in provider licence (except FT conditions) • Action to address any failings through NTDA Points of interest

20. Implications for FT Governors • Hold non-executive directors to account • Represent interests of FT members and public • Vote on proposals to merge, acquire, separate and dissolve • Vote on proposed increases to non-NHS income above 5% p.a. Governors • Oversee FT financial stability and governance • Power to change FT directors and governors Monitor

21. How will the licence work in practice? Guidance for commissioners on Commissioner Requested Services Guidance on the Risk Assessment Framework Guidance on Licence Enforcement

22. Timeline Today Department of Healthconsultations Opportunity forSecretary of Stateveto HSCAassent January 2013 Spring 2012 Summer 2012 Summer 2012 Late 2012 April 2013 April 2014 Risk Assessment Framework Provider licence consultation FTslicensed Other providerslicensed Guidance for commissioners on Commissioner Requested Services Enforcement Guidance Management of risk pool to be consulted on in 2013 NB Timing subject to the responses to the consultation and significant external events

23. Consultations – Monitor and Department of Health • Current Monitor • NHS provider licence (31 Jul - 23 Oct) • Guidance for commissioners (16 Aug - 8 Nov) • Current Department of Health • New licensing regime for providers of NHS services (15 Aug - 22 Oct) • Proposals for commissioners to deliver best value (15 Aug - 26 Oct) • Future Monitor • Enforcement guidance (late 2012) • Risk assessment framework (late 2012) • Risk pool (2013)

24. Licence consultation • Consultation on Licence Conditions • 31 July 2012 - twelve weeks to 23 October 2012 • Welcome views from all stakeholders • Written responses by 23 October 2012 • Workshops in Sept and Oct on consultation • Still to run for FTs and NHS Trusts • 10 October Leeds • 11 October London • More detail on website

25. Monitor’s role and the new licence for NHS providers2 October 2012 Sue Meeson Director of Public Affairs and Communications