Reinventing FTs and creating IHOs: autonomy, accountability and flexibility
Earning autonomy
The idea of earned autonomy is not new. NHSE has long used regulatory powers to impose licence conditions and enhanced oversight (i.e. restrictions on provider autonomy) in line with provider performance against subsequent oversight frameworks. The imposition and removal of these restrictions is arguably a form of earned autonomy – albeit one that is not well aligned with the founding purpose of FTs as autonomous bodies.
While the original presumption was that FTs had greater autonomy than NHS trusts because they had been through a rigorous authorisation process (and had councils to provide ongoing checks and balances), the plan envisages an NHS where restrictions are lifted incrementally as performance improves. In this way it is positioned as a reward for “good” trusts and an incentive for boards to improve. However, autonomy is better understood not as a reward, but as a mechanism to ensure the system is well run, by devolving decision-making power as close as possible to the front line. As such, it should be grounded in board capability – the ability to run services and manage risk effectively - not just operational or financial performance at a point in time.
The plan's commitment to removing restrictions on the statutory freedoms of existing FTs is very welcome, but appears to apply only to high-performing organisations. There is not yet a commitment to remove the blanket restrictions currently curtailing some of FTs' legal powers[vi]. Although more detail has not been given, it is reasonable to assume that the performance measures used to award or restrict boards' freedoms will be those in the NOF[vii].
It is therefore vital that the measures of performance are sufficiently accurate and are measuring the right things to give confidence that high performing boards can safely and sustainably lead their organisations without intervention from the centre.
For this to be the case, it will be necessary to take a different approach to the NOF in 2025/26, which gives a clear focus on this year’s planning guidance priorities, and as a result is primarily a short-term performance management tool[viii].
Point in time assessments against performance metrics do not measure whether a board is a safe pair of hands[ix]. Effective board leadership does not always guarantee immediate results, just as poor leadership does not always lead to instant problems. In the short term, even the most capable boards can face serious performance challenges beyond their control, while less capable boards might appear to be doing well due to favourable circumstances. In the medium to longer term effective boards should deliver better performance, all things being equal. Awarding freedom to act on the basis of operational and financial performance – even if the metrics are sound – is therefore risky.
We need to separate out to an extent capability from performance. Obviously they are linked – but probably not as tightly as people think!
Recognising that "good" boards may preside over poor performance, and poor boards preside over good performance is important.
Removing any license conditions and other restrictions on the existing powers of FTs, where they are high performing, is of course welcome, but still conflates operational and financial performance measures with measures of board performance.
The problem with hands off regulation as it has happened is (as Penny Dash articulates) the regulation is not joined up, so a trust can be pulled in opposite directions...
...It also does not lead to excellence but concentrates on compliance. Largely because it sets out a series of minimum standards that one has to achieve, that rapidly becomes tick box. Most clinical teams benefit from rigorous and evidence based peer review.
Instead of focusing on performance, any system of earned autonomy should emphasise the capability of trust boards, and examine the factors that determine capability. These include: strategic leadership, culture and behaviours, corporate and clinical governance, responsiveness to patients, resource efficiency, and the board’s insight into organisational performance. Greater freedom to act should be awarded to organisations that can demonstrate they are well-led in these ways.