Monitor has issued a consultation on the guidance it proposes to publish on the use of its new de-authorisation powers introduced in the Health Act 2009 (but which are not yet in force). The guidance is intended to be used by Monitor to assist its de-authorisation decision-making and will inform NHS Foundation Trusts of the considerations such a decision will be based upon. The consultation closes on 26 May 2010.

Monitor's regulatory regime

As the independent regulator of FTs, Monitor authorises FTs as autonomous public benefit corporations and ensures that FTs maintain compliance with that authorisation. If Monitor is satisfied that an FT is significantly failing to comply it has the discretion to use specific powers to require the FT to carry out, or not carry out, specific actions within a set period of time and/or remove any or all of the directors or members of the board of governors and make interim appointments in their place.

Monitor's Role in De-authorisation

Monitor may give notice (the "Regulator's Notice") to the Secretary of State for Health that an FT is failing to comply with any terms of its authorisation or any requirement imposed on it under any enactment and that the seriousness of that failure and/or contravention would justify the Secretary of State making an order for de-authorisation.

In issuing a Regulator's Notice, Monitor must consider the following criteria (the "Criteria"):

  1. The health and safety of patients;
  2. The quality of the provision of goods and services by the FT;
  3. The financial position of the FT; and
  4. The way in which the FT is being run.

Before issuing a Regulator's Notice, Monitor must consult with the following:

  1. Secretary of State for Health (unless consideration is at the request of the Secretary of State); then
  2. The FT;
  3. Any SHA in whose area the FT has hospitals, establishments or facilities;
  4. Any other person the FT provides goods or services to under the NHS Act 2006 and which Monitor considers it appropriate to consult with.

Monitor must also furnish the Secretary of State with a report on why it considers de-authorisation justified at the same time that it submits the Regulator's Notice. Monitor will only serve a Regulator's Notice as a measure of last resort once it has exhausted its regulatory powers to facilitate compliance by an FT within a reasonable timeframe.

Upon receipt of a Regulator's Notice, the Secretary of State must make an order for de-authorisation.

Criteria Monitor must consider

In relation to each of the four Criteria that Monitor must consider to determine whether a de-authorisation is justified, the guidance will reiterate the relevant factors that the FT is required to comply with in its terms of authorisation or under any enactment. In order to determine whether any breach is significant, and therefore justifies a de-authorisation, Monitor intends to take into account further specific factors in relation to each Criteria. The guidance will set out each of these factors, but broadly speaking these include:

  • The FT's organisational capability;
  • The FT's financial position/profile and implications for service provision;
  • The views of the CQC and the potential impact of any de-registration of services by the CQC;
  • The ability of the FT to provide the requisite clinical and management expertise;
  • The views of other bodies, i.e. patients, governors, trust auditors and third parties;
  • The availability of local or central funds to ensure compliance;
  • Any proposals to merge with another NHS provider;
  • The willingness of the Secretary of State to provide financial support;
  • The outcome of any previous regulatory actions.

Monitor does not propose to take account of anything further than the four mandatory Criteria mentioned above.


The consultation poses five questions, four of which query whether the responder agrees with the proposed basis upon which Monitor will ordinarily consider de-authorisation on the grounds of each of the four Criteria – with any further information as to why and any other changes which may improve the proposals.

The final question is whether consideration of the four Criteria is a sufficient basis upon which Monitor will determine whether it makes a notice to the Secretary of State.

What does the Consultation mean for FTs?

FTs should review the content of the proposed guidance and consider whether they agree with the proposed Criteria. It is important that FTs provide their views to Monitor by 26 May 2010.

Once the guidance is published, FTs should use it as a tool to monitor their own compliance as part of their wider assurance framework.

The consultation is available through Monitor's website at www.monitor-nhsft.gov.uk under the "publications" section.


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