Next day briefing: advanced foundation trust programme – guide for applicants
13 November 2025
This briefing encourages our members to respond to the consultation. It summarises the contents of the draft guidance, highlights our influence so far, and gives our view of the proposals.
Governance
Advanced foundation trust programme – guide for applicants
On 12 November 2025, NHS England (NHSE) published a draft Advanced foundation trust programme guide for applicants which is out for consultation until 11 January 2026. Advanced foundation trust (AFT) is the name for what the 10-year health plan (10YHP) referred to as a ‘new FT’.
The draft guidance sets out the rationale for the programme, and proposed eligibility criteria and assessment process. It also sets out the assessment process for readiness to hold an integrated health organisation (IHO) contract.
This briefing encourages our members to respond to the consultation. It summarises the contents of the draft guidance, highlights our influence so far, and gives our view of the proposals.
NHS Providers will be submitting a formal consultation response. If you have points you would like included in that response, please email them to Izzy Allen, senior policy advisor (governance) by 13 December.
The draft guide for applicants
The first half of the draft guidance contains the rationale for the programme, more detail about proposed AFT freedoms and flexibilities, and an overview of the assessment and eligibility criteria, and the assessment process.
The second half sets out in two detailed annexes the factors to be assessed and types of evidence that could be used to demonstrate readiness for both becoming an AFT and an IHO contract holder. Eligible trusts interested in becoming an AFT should contact their NHSE regional teams.
Rationale
As set out in the 10YHP, the aim of the AFT programme is to redistribute power to the frontline, using a rules-based approach to re-empowering provider boards. Autonomy must be earned, and good performance will be incentivised and rewarded. Aspirant AFTs will be expected to focus on their core purpose, ensure quality of care is not compromised, and if approved, use their greater autonomy to improve population health and tackle health inequalities, as well as playing a proactive role in delivering the three shifts. Organisations that prioritise their own status or organisation will not pass the AFT test. The 10YHP’s aspiration that all NHS providers will be AFTs by 2035 is reiterated.
Freedoms and flexibilities
AFTs will benefit from three ‘core freedoms’:
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Strategic and operational autonomy: characterised by ‘a different relationship with the centre and regions’ which frees up provider management and leadership bandwidth, including a more strategic approach to annual planning.
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A capability-based regulatory approach: AFTs will be given more time to address performance issues where they arise. Boards will have clarity about what is expected of them, including the triggers for capability concerns. Oversight will be both dynamic and rules-based starting in 2026/27. AFT status can be removed where standards and provider capability drop. AFTs will go through reassessment every five years.
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Financial flexibilities: capital flexibility, able to retain and reinvest aggregate revenue surplus, excluding deficit support funding, accumulated since 2024/25, in capital projects. Capital autonomy, with business case approval not required for up to £100m capital department expenditure limit (CDEL) spend. Revenue flexibility, limited to non-recurrent spending to support implementation costs linked to capital investment and transformation, of RDEL surpluses accumulated since 2024/25, subject to having enough cash reserves.
In addition, only AFTs will be able to apply for IHO contract holder status, and AFTs will ‘benefit from a greater leadership role locally and nationally’, which might include sharing best practice and innovation, and supporting other providers’ improvement work.
Eligibility and assessment criteria
Both existing FTs and NHS trusts will benefit from the freedoms above if they are eligible, apply and are approved to be AFTs. NHS trusts given AFT status will be expected to convert to FT legal form once new health legislation is passed. Additional information including a proposed constitution will be required, and a commitment that there has been no material reduction in performance or new capability issues.
Eligibility criteria are:
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NHS Oversight Framework (NOF) segments one or two, for two consecutive quarters.
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Care Quality Commission (CQC) rated ‘good’ or ‘outstanding’ with no site/service ‘inadequate’, with contemporary assurance sought from CQC to mitigate issues around timeliness of assessments.
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Provider capability of at least amber-green.
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Support of local Integrated Care Boards (ICBs) and NHSE region.
NHSE regional teams will confirm which trusts are eligible to apply for AFT status and IHO contract holder status.
‘Existing local knowledge’ and third-party information will be used by the regions to supplement the harder eligibility criteria (such as NOF, CQC) outlined above. This will include ‘commitment to partnership working, population health, reducing health inequalities and neighbourhood health services’. To identify potential IHO contract holders, organisational maturity, leadership, relationships and financial risk management will also be factored in by the regions, alongside the ‘likelihood of support from system partners’ in health and local government.
Trusts with shared leadership arrangements, including group models, must demonstrate eligibility and apply individually.
Key assessment criteria for AFT status are:
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Is the trust well led, collaborating with system partners to improve population health and tackle inequalities, and responsive to local communities?
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Does the trust provide high-quality services with robust quality governance in place?
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Is the trust financially sustainable with a focus on productivity improvement? This includes a medium-term financial plan demonstrating a high likelihood of an adjusted surplus position in year one, and a sustainable surplus by year three.
Key tests for those applying for IHO designation, in addition to those for AFT status, include:
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A strategic vision to improve population health outcomes.
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Consideration of operating models and governance structures, including management of associated risks, needed of an IHO contract holder.
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Appropriate awareness of cross-sectoral quality governance and risk management.
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Understanding of the principles of good commissioning, the skills to deliver contracting and procurement at a large scale, and appropriate financial governance plans.
Annex 1 sets out detailed AFT assessment criteria, highlighting where there is alignment to the provider capability self-assessment process (and therefore should not require additional work), relevant board assurance statements, and ‘business as usual’ as well as additional evidence that providers might use to support their application. Annex 2 details additional criteria for organisations wishing to take on an IHO contract.
Assessment process and possible outcomes
Trusts will submit documentation including a medium-term financial plan and signed board statements. Submissions are likely to include internal audit reports, board assurance framework, board/committee papers, and reports of any external reviews.
An NHSE assessment team will be assigned to each applicant and will review the documentation, working ‘in a collaborative and flexible way’ with applicants. Board members will need to be available to participate.
The assessors will prioritise applications based on their capacity. Assessment may commence immediately if there is an available slot or take longer. A letter will be sent to trust confirming the assessment timetable, with the expectation that the process will take a minimum of four months. An indicative timeline is included in the draft guidance, with meetings with key applicant board members taking place around three months into the process.
There will also be third-party and stakeholder interviews, board and committee observations, and interviews with key stakeholders and relevant external bodies. A letter of assurance will be sought from the CQC, and the CQC’s continuous intelligence monitoring will be considered to mitigate significantly dated CQC reviews.
There will then be a final board-to-board meeting, undertaken between the provider board and NHSE executives plus individuals drawn from a panel of independent members.
The assessment team will recommend whether to approve the application to this independent panel which makes the final decision.
Applications may be approved, deferred or rejected. For approvals where further action is needed, a side letter detailing this may be sent along with an approval letter. A deferral decision will include the length of deferral and the actions or conditions that need to be met before the application can be approved. Rejected applications will need to re-commence from the beginning once eligibility conditions are met.
Our view and influence so far
We have engaged extensively with both NHSE and the Department of Health and Social Care (DHSC) about the emerging operating model and provider sector, including ‘new FT’ (now AFT) status and IHOs, since the publication of the 10YHP. We are extremely grateful for their ongoing engagement.
We have also published on the topic; most recently Reinventing FTs and creating IHOs: autonomy, accountability and flexibility, which has been well received by NHSE and DHSC.
Our view on the draft guidance restates issues and opportunities already raised with NHSE and DHSC about the overall policy direction. We also highlight some specific considerations that we would particularly welcome members’ perspectives on. We reserve line-by-line feedback, where appropriate, for our formal consultation response.
The policy intent
We strongly support the government’s commitment to empowering and enabling NHS organisations to deliver, and understand the AFT programme is part of implementing that commitment. We are also highly supportive of developmental review processes that add value and drive meaningful improvement.
This guide sets out what is essentially a process for the revalidation of existing FTs and a pre-validation of NHS trusts, pending legislative changes that may lead to the removal of councils of governors. The new assessment criteria reflect the aspirations of the 10YHP, marking a departure from the original FT authorisation process. We acknowledge the guide’s emphasis on collaboration over competition (while noting that other aspects of government policy pull in the opposite direction), and its assertion that this process should not distract from core care delivery.
We understand the rationale for reassessing provider readiness for self-governance, especially after a decade of centralised oversight. The draft guide’s commitment to AFTs undergoing revalidation every five years implies that the NOF, board capability assessment and CQC inspection regimes do not and will not sufficiently assure the centre of providers’ organisational fitness: we agree that in their current form, these tools are not fit for this purpose. However, we would note that the AFT process adds a further evaluation process to the NHS at a time when there is a commitment to streamlining and reducing duplication.
Given current operational and financial pressures and need to transform models of care, it is essential that the programme delivers tangible benefits, for providers, for the taxpayer and most of all for patients.
Member feedback on the AFT concept to date suggests:
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Strong support for reduced micromanagement, with reservations about the impact on performance that the freedoms outlined can have in practice. Members are more likely to point to reforming financial flows, improving crumbling estate, enhancing digital capacity and capability, resolving workforce supply and wellbeing issues, among other enablers, as the real drivers of better performance.
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Interest in AFT status as a pathway to an IHO contract, though clarity on the IHO model is still needed: the rationale for its role among other delivery models remains unclear.
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Capital freedoms are welcome, although there is scepticism about their viability in the current climate.
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Doubt about the feasibility of increased autonomy, especially in the context of NHSE’s abolition and likely centralisation of regulatory and oversight powers under the secretary of state.
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Trusts are likely to take up AFT status where it is available to them, especially where they are encouraged to apply by their regulator.
We would greatly value further member perspectives on the burden and benefits this programme will bring.
The draft AFT eligibility and assessment criteria and process
We strongly support the focus on provider capability throughout and welcome the balance of factors relating to readiness to support the three shifts and integration alongside core corporate and quality governance, workforce and other considerations. It is helpful that the criteria align with the expectations in The Insightful Provider Board.
On the assessment, we welcome the use of criteria that can apply across providers of all sectors.
There are some criteria that will necessarily require subjective judgement and where adopting a fair and consistent approach will be important, for example around ‘commitment to partnership working, population health, reducing health inequalities, and neighbourhood health services’, and ‘contribution to national priorities in the 10-year health plan and effective plans to use the expected autonomy and freedoms’. We also note the requirement for applications to be supported by ICB(s) and query how any disputes might be resolved.
Expecting providers to submit plans demonstrating how they will use their new freedoms presupposes that the freedoms are essential to deliver trust and system plans. This may not necessarily be the case.
There is still no detail on how the independent panel undertaking the final decision-making board to board assessments will be selected, who it is accountable to, and what powers it will have to guarantee its independence. The importance of the independence of the panel is recognised here, and this should also be recognised when regulating trusts and ICBs.
The draft IHO assessment criteria and process
We will comment on the assessment criteria more extensively once more detail is available about IHO contracts. The commitment to review the IHO criteria once the first contracts are developed is pragmatic.
It is positive that the IHO assessment is an extension of the AFT one and can be undertaken concurrently or at a later date. For prospective IHO contract holders it makes sense that the ICB(s) must approve (and likely be deeply involved in) the application, since ICB(s) will commission the provider.
Since the guide confirms that an IHO is a contractual delivery mechanism, the guidance could be clearer that the assessment is not to designate a provider as an IHO (as a distinct type of organisation) but as capable of holding an IHO contract.
The relationship between ICB capability and assessing a provider capable of holding an IHO contract would benefit from further clarification. Policymakers must decide whether an IHO contract is an advanced form of commissioning that only very capable ICBs should undertake, or whether it can be used to improve care in cases where there is a lack of commissioning capability.
Responding to the consultation
Responses to the consultation are due by 11 January 2026 and can be submitted online. We are grateful for any insight members can share with us to inform our own response on your behalf.
Please email izzy.allen@nhsproviders.org by 13 December if you have points you wish us to include.