Authorisation and deauthorisation

Authorisation

The plan implies that both NHS trusts and existing FTs will require authorisation as new FTs, though the wording is slightly ambiguous[x]. This is another area where our FT members, in particular, are urgently seeking clarification.

The requirements for authorisation are set out broadly in the plan:

• Excellent delivery on waiting times, access, quality, and financial management 
• Higher productivity than peers 
• A proven commitment to partnership working 

This is a markedly different approach to Monitor-era[xi] authorisation, which required trusts to have an overall Care Quality Commission rating of good or outstanding and then assessed overall sustainability, leadership, governance and financial viability – not just performance metrics. In short, it looked at the whole organisation and its likely sustainability in the future to satisfy itself that a trust was able to self-govern. 

Trust leaders who recall the early days of the FT model under Monitor reflect positively on the impact of both the reduction in oversight and the freedom to allocate surplus funds for patient benefit. If the rationale behind opening a new FT pipeline is to reap the benefits of a more autonomous provider sector, then – for the same reasons as argued above in relation to how existing FTs might earn back their statutory freedoms - organisational capability and capacity in the round, as opposed to performance against specific metrics at a point in time, ought to be the criteria for authorisation of trusts and FTs as a new FT. 

The requirement to demonstrate higher productivity than peers suggests that not all trusts can achieve new FT status – as by definition half of the sector will perform below average. This may work initially, but is at odds with any policy aim for all providers to be designated new FTs by 2035, as. all providers cannot be better than their peers. This has been noticed by trust leaders: 

Equally, care will need to be taken when determining how to fairly and meaningfully assess 'commitment to partnership working'. Partnership working should be undertaken in pursuit of worthwhile objectives, not for its own sake. 

For NHS trusts, authorisation unlocks legal powers: strategic autonomy, board control, surplus retention, and borrowing rights. Existing FTs of course already have these powers, although they are largely restricted at present. 

Two things are unclear. Firstly, whether it is authorisation as a new FT or the lifting of restrictions under the NOF that is intended to be the driver of improvement (or both). And secondly, whether there is much incentive for better-performing FTs in particular to be authorised as new FTs at all. The prize of becoming an integrated health organisation (IHO), which is considered below, might provide part of the answer, at least for those providers that see this as part of their future. 

Deauthorisation

Monitor had the power to deauthorise FTs back to NHS trusts until 2012 but never used it. This power was removed by the 2012 Act and replaced by the Trust Special Administrator regime for both FTs and NHS trusts. Monitor and subsequent regulators have instead preferred the use of tools like licence conditions, undertakings, statutory transactions (mergers, acquisitions etc) and leadership changes[xii].

Frequent deauthorisation based on fluctuating NOF metrics would be both extremely disruptive and unnecessary, as autonomy can already be restricted using regulatory powers.[xiii]

For this reason, it is essential that the new regulatory system gives struggling providers time to improve before considering de-authorisation. It is hard to envisage in practice a new FT performing so badly that deauthorisation would be preferable to placing the organisation under new leadership, for example. The policy intent behind reintroducing deauthorisation remains unclear – for example whether it is a driver of improvement or a public safeguard? To avoid undermining confidence and stability, it is important for national policymakers to be clear about what it is for, and that it will only be used in extreme circumstances where there is no viable alternative. This will be especially important if FTs are central to local system design.  

The plan’s proposed independent panel to ‘oversee’ the authorisation process is welcome and should help ensure transparency and reduce political influence. To be credible, the panel will need appropriate powers so it can enforce suitable transparency, objectivity, consistency, and fairness, and its independence should be safeguarded in law.