NHS Foundation Trusts. Eligibility Criteria and Timetable

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1 NHS Foundation Trusts Eligibility Criteria and Timetable

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3 Contents 1. Summary Context NHS Foundation Trusts Timetable and Support for applications Preliminary applications Annex A: Report on your Current status

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5 1. Summary 1.1 This document provides an update on the development of NHS Foundation Trust policy. It sets out the timetable for the preliminary application from NHS Trusts and contains the initial material that will need to be included in preliminary applications for foundation status. The full application packs will be distributed to interested parties at a later date and the Department of Health will host an event on applications in October. 1.4 In October, the Department of Health will host an event on NHS Foundation Trusts. At this event an application pack will be issued for preliminary applications for foundation status. Applicants will subsequently be shortlisted and provided with support to make detailed, final applications by March In summary, NHS Foundation Trusts will be: Part of the NHS family, providing healthcare to NHS patients within a framework of national standards but not line managed by the Department of Health; Held to account locally by the communities they serve and through cash for performance contracts - based on regulated price tariffs; Inspected by CHAI to a set of national standards along with all NHS and independent healthcare providers; Provided with new governance structures to reflect the different relationships with patients, staff, the local community and other key stakeholders in order to enhance accountability within the local community; Given additional freedoms; Established as free-standing legal entities. 1.3 Attainment of 3-stars in the NHS Performance Ratings will be the minimum requirement to apply for foundation status. There will be a rigorous selection and application process for NHS Foundation Trusts. Criteria for assessing applications will cover financial management, clinical standards, responsiveness to patients, leadership and management; and commitment and support from clinical and other staff and local stakeholders. 3

6 2. Context 2.1 Delivering the NHS Plan set out the strategy for taking forward the development of the NHS where investment plus reform will equal results. The NHS now has a firm financial foundation with guaranteed increases in resources over the next 5 years - an annual average increase of 7.4% in real terms, raising the expected level of health spending to 9.4% of GDP easily on a par with the average in Europe. 2.2 But extra resources alone will not be enough to transform the NHS into a truly 21st century health care system. Reform of the structures of the service and the way in which it is delivered is also necessary to provide a coherent framework of: High national standards and clear accountability; Devolution of power and resources to the front line to give health professionals who deliver care the freedom to innovate; Increased flexibility between services and between staff to cut across outdated organisational and professional barriers; Clearer incentives to improve; and A greater diversity of service providers and choice for consumers purchaser of health services for the population, but NHS healthcare no longer needs to be delivered exclusively by line managed organisations. 2.4 The NHS Plan made it clear that organisations that performed well would receive more freedoms. The principle of earned autonomy was created to provide incentives to organisations to improve. NHS Foundation Trusts are the clearest example of this regime of earned autonomy, providing real freedoms to those 3-star NHS Trusts that want to apply. 2.5 The further changes announced in April in Delivering the NHS Plan complement and drive home earlier reforms. NHS Foundation Trusts sit squarely within this framework. 2.3 Substantial progress has been and is being made in establishing this framework through the development of the National Service Frameworks, the establishment of NICE, the introduction of Primary Care Trusts and the changes in the contracts for all staff which are currently being negotiated. The introduction of greater choice for patients, first in cardiac surgery this year and then more widely, and the establishment of Diagnostic and Treatment Centres provided both by the NHS and UK and overseas private providers serving NHS patients, are further steps along this road. As capacity expands, patients need to be offered greater choice. The NHS will remain the public 4

7 3. NHS Foundation Trusts 3.1 NHS Foundation Trusts will be free-standing organisations with greater freedom to deliver better services to NHS patients. They will unleash local entrepreneurialism and innovation whilst providing healthcare services to NHS patients within a framework of national standards. 3.2 NHS Foundation Trusts will have a clear and overriding commitment to work for the public benefit by delivering healthcare to NHS patients. There will be a legally binding lock to stop them from selling off their NHS assets. This means that any surplus they make could not be distributed outside their organisation nor for purposes other than those for which they were established. In this way, public assets can only be controlled by organisations established to serve the public good. They will also have a clear set of public service values and principles, like those which are followed in the NHS and which serve the public and patients well. Their purpose will be to fundamentally serve NHS patients; providing treatment that is free and based on need, not ability to pay. They will be part of the NHS family but no longer subject to direct line management and control from Whitehall 3.3 NHS Foundation Trusts will be constituted as separate entities providing a lock on their independence. This is intended to avoid the freedoms of NHS Foundation Trusts being eroded by intervention from the Department of Health. In this way they will be released from Whitehall interference. The Secretary of State for Health will not have the power to direct NHS Foundation Trusts, nor will he be involved in appointing board members. 3.4 Accountability for service delivery and stewardship of the organisation will be delivered in a number of ways such as; Inspection by CHAI Governance arrangements which will give greater accountability to their local community as accountability to Whitehall reduces Hard edged cash for performance contracts with commissioners 3.5 Inspection: NHS Foundation Trusts will be required to co-operate with inspections carried out by CHAI. The purpose of these inspections will be to ensure that appropriate standards in the provision of health services are being met. The standards applied will be the same as those used for inspecting other NHS Trusts. The results of inspections and the analysis of the NHS Foundation Trust s comparative performance will be made public. 3.6 Governance: As accountability to Whitehall decreases so accountability locally will increase. NHS Foundation Trusts will operate governance arrangements that give local stakeholders patients, people in the local community, staff and partner organisations (such as PCTs and local authorities) real opportunities to influence the overall stewardship of the Trust and its strategic development. Each NHS Foundation Trust will have to set up clear arrangements for better ensuring community involvement in the running of the organisation than currently prevails. Membership of the boards will be determined locally rather than nationally. 3.7 Performance contracts: Commissioners will be able to hold NHS Foundation Trusts to account for service delivery and for their contribution to delivering on local health strategies and meeting targets through legally enforceable arms-length contracts. Contracts will encompass both incentives for good performance and penalties for poor performance, alongside a focus on quality of care and not just volumes of activity. In order to assist PCTs in their commissioning role and to provide greater consistency and transparency, there will be a common set of contract tools available to PCTs for use when negotiating contracts with NHS Foundation Trusts. 5

8 3.8 NHS Foundation Trusts will be well placed to take advantage of the new system of payment by results to be introduced into the NHS. Under this system, money will follow patient choices and NHS Foundation Trusts, with short waiting times and high standards, will be well placed to increase their income from NHS commissioners. 3.9 NHS Foundation Trusts will be able to embark on future NHS PFI procurements in line with existing Department of Health policy and standards In giving NHS Foundation Trusts greater freedoms to bring about benefits for patients, it is essential that this supports partnership working and the development of services through clinical networks. To achieve this, applicants for foundation status will be expected to demonstrate that they have the support of PCTs and health authorities, and to indicate how increased organisational autonomy will be reconciled with the development of partnerships NHS Foundation Trusts will be free to recruit and employ their own staff but will continue to benefit from participation in wider agreements negotiated by or on behalf of NHS employers collectively. They will be expected to maintain high standards of employment practice. NHS Foundation Trusts will, however, be free to act independently in offering additional rewards in recognition of individual, team or organisational performance. They will also have maximum freedom to apply the flexibilities of new pay systems Staff working in NHS Foundation Trusts whose employment is transferred from another NHS organisation will retain their existing terms and conditions of employment. Their continuous service, which determines their eligibility for various rights and benefits, will be preserved NHS Foundation Trusts will be expected to play their part in the education and training of health professionals and of the wider workforce. As major local employers of health professionals, they will also be expected to contribute to the effective working of Workforce Development Confederations and postgraduate deaneries and to work in partnership with Higher and Further Education Institutions. 6

9 4. Timetable and Support for applications 4.1 There are two key stages of your application: Preliminary application; and, Full application. The following paragraphs give an indication of the timetable for the application process and outlines the support that will be provided to applicants. 4.2 The Department of Health will provide support to NHS Trusts in their applications for foundation status. In October we intend to invite all Chief Executives from 3-star acute Trusts to a learning event. At this time we will address issues on the preliminary applications arising from this document, as well as providing more detail about how we envisage NHS Foundation Trusts operating. At a later stage, further support will be provided to shortlisted candidates in preparing their detailed, final applications for foundation status and then on into the early stages of implementation. 4.4 The timetable for the application process is as follows: 2002 October November December 2003 March July 2004 April Event for 3 star acute Trust applicants. Closing date for preliminary applications for NHS Foundation Trust status. Applicants shortlisted. Final applications submitted. Successful applicants established as shadow NHS Foundation Trusts. Subject to legislation, the first NHS Foundation Trusts become fully operational. 4.3 In addition, we will be providing support to PCTs in their involvement with applications for foundation status. This support will continue into the early stages of implementation when we will be focusing on those organisations that will be contracting with the first wave of NHS Foundation Trusts. 7

10 5. Preliminary applications 5.1 Preliminary applications for foundation status will be in the form of a report on the NHS Trust s current status. This report will require a combination of supporting numerical information backed-up with narrative. NHS trusts will be asked to provide evidence of their current performance and working practices in six key areas: Evidence of responsiveness to patients Evidence of high clinical standards and sound clinical governance arrangements The existence of high quality leadership and management The commitment and support of clinical and other staff Effective partnership working and stakeholder support Evidence of a sound underlying financial position. Further details of the likely requirements are provided in Annex A. 8

11 Annex A: Report on your current status The preliminary applications will be assessed using performance data and a report on the applicant s NHS Trust current status. The report will need to contain information on the following six areas: Section 1 Section 2 Section 3 Section 4 Responsiveness to patients Quality of Care Leadership and management Commitment and support of clinical and other staff Section 5 Partnership working and stakeholder support Section 6 Finance Set out below are the specific areas we expect to see covered in their report. Section 1: Responsiveness to Patients 1.1 NHS Foundation Trusts are being established to enable high performing organisations to offer services that are responsive to patients. Applicants will need to demonstrate that they have a track record of achievement in this area. In the preliminary applications, 3-star NHS Trusts will demonstrate this by success against the patient focused measures included in the performance ratings and evidence that the NHS Trust s services produce consistently good experiences for patients, judged by the results of the annual survey of patient experience. Beyond this, applicants are asked to provide evidence of the following: b. Actions taken in response to patients views and complaints, including how the organisation learns from the complaints it receives. This material should cover the work of the Patients Advice and Liaison Service (PALS) and actions taken specifically in response to the work of the PALS. c. Initiatives taken by the organisation to develop services that are responsive to patients, specifically relating to the following aspects of the patient s experience of care: Tackling waiting including meeting access targets in advance of the NHS Plan; Safe, high quality care; Building better relationships; A clean, comfortable, friendly place to be; and, Better quality, timely information and patient choice. d. Any other work or developments within the organisation relevant to the aim of improving responsiveness to patients. The assessment panel will include patient representatives who will be asked to review this material as part of the selection process. Section 2: Quality of Care 2.1 NHS Foundation Trusts must be able to demonstrate that they are providing high standards of service to patients. In the preliminary application this will be demonstrated in part by the use of clinically focused measures in the performance ratings, the use made of CHI (Commission for Health Improvement) reviews in these ratings and data on clinical negligence claims. Beyond this, applicants are asked to provide the following: a. Actions taken to provide timely, relevant and accurate information to patients. 9

12 a. A copy of your most recent CHI clinical governance review and/or inspection report and evidence of follow-up action; copies of the Trust s most recent Clinical Governance Development Plan and Clinical Governance Annual Report. b. Evidence of actions taken to ensure that NPSA (National Patient Safety Agency) safety alerts have been implemented. c. Evidence of what the organisation does to promote implementation of NSFs (National Service Frameworks) and NICE (National Institute for Clinical Excellence) guidance. d. Any other work or developments within the organisation relevant to the aim of promoting high standards. The assessment panel will include representatives of CHI and other agencies concerned with quality who will be asked to review this material as part of the assessment process. Section 3: High quality leadership and management 3.1 Applicants must demonstrate that the organisation is well led and that the management is of high quality to the benefit of patients and staff. In the preliminary applications 3 star NHS Trusts will demonstrate this, in part, by success against the staff focused measures included in the performance ratings, through the continuing achievement of key targets and a track record of performance improvement in all key NHS Plan areas demonstrated by their performance over the last three years. Beyond this, applicants are asked to provide evidence of the following: a. Long term vision alongside delivery of short term goals. b. Successful change management. d. Any other work or developments within the organisations that demonstrate high quality leadership and management. The assessment panel will include representatives of Strategic Health Authorities, the Modernisation Agency, DHSC (Regional Directors of Health and Social Care) and other agencies concerned with leadership and management who will be asked to review this material as part of the assessment process. Section 4: Commitment and support of staff 4.1 Applicants must demonstrate that their clinical and other staff are committed to and supportive of the organisation s core aims, participate in its management and are offered the opportunity to develop their skills. In the preliminary applications this will be demonstrated in part by the results of national and local staff survey results that should be attached to applications. In addition, applicants are asked to provide evidence: a. That clinical and other staff leaders are committed to and are supportive of the modernisation agenda, and are actively involved in the day to day management of the organisation. b. Of investment in clinical leadership development to enable clinical staff to participate in the national leadership development programmes offered by the Leadership Centre. c. Of actions to ensure that clinical staff are offered and take up the opportunity to develop their clinical skills. d. Of any other work or developments within the organisation to empower frontline staff including clinicians or to increase the commitment and support of staff. c. High quality HR management. 10

13 The assessment panel will include representatives from Professional Bodies and other staff who will be asked to review this part of the assessment process. Section 5: Partnership working and stakeholder support 5.1 Applicants must demonstrate that the organisation is committed to partnership working with local stakeholders. In the preliminary applications this will be assessed in part through the partnership working focussed measures included in the performance ratings. Beyond this, applicants are asked to provide evidence of: a. Actions taken to involve representation of patients and the public in the planning, implementation and delivery of services by the Trust. b. Involvement in clinical, service networks and wider partnership working across the local health system. c. Effective integration of services delivered within the local health community. b. Summary from the annual accounts of: Income and expenditure retained, surplus/deficit recorded in the annual accounts over the past three years. Evidence of compliance with the Public sector payment policy over the last three years as per the annual accounts. Clinical negligence liability amounts and trends over the past five years from annual accounts, in addition to your CNST ratings and NHSLA assessment on clinical negligence claims at 2001/02 outturn. c. Information on any non-recurrent support or brokerage made available by regional offices or commissioners during the past 3 years and the reasons. d. Details of all cost improvement programmes cash and non-cash in current and over the last three years and relative success. Assessment will be made by a panel of financial experts drawn from DoH and independent financial advisers. d. Any other work or developments within the organisation relevant to the aim of promoting partnership working and gaining the support of local stakeholders. The assessment panel will include representatives from local stakeholder groups (including PCTs) who will be asked to review this as part of the assessment process. Section 6: Finance 6.1 Applicants must clearly demonstrate a track record of good financial management and be financially viable. For the preliminary applications you are asked to provide the following information: a. Last three years annual accounts and reports. 11

14 Crown Copyright Produced by the Department of Health P 2k July 02 CHLORINE FREE PAPER The text of this document may be reproduced without formal permission or charge for personal or in-house use. First Published: July 2002 If you require further copies of this publication quote and contact: Department of Health Publications PO Box 777 London SE1 6XH Tel: Fax: Textphone (for minicom users) for the hard of hearing 8am 6pm Monday to Friday It is also available on our website at

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