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Foundation trusts told to be more 'pessimistic' about spending

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Foundation trusts have been told to reassess their future spending plans to better reflect the financial challenges of the recession.

Monitor, the foundation trust regulator, has warned trusts that their spending plans for the next three years – which they have to submit to Monitor – are too optimistic ‘given the potential funding challenge ahead’.

The regulator published its 2009-2010 Annual Risk Assessment today, which summarises the three-year plans submitted by the 115 foundation trusts in existence as of 31 March. 

Monitor has now called on trusts to re-submit plans that reflect a more ‘pessimistic’ view of economic conditions.

Stephen Hay, Monitor’s chief operating officer, said: ‘Although we have found that NHS foundation trusts are consistently improving the quality and robustness of their financial planning, we are concerned that the plans prepared earlier this year may now prove over optimistic – particularly for the years from 2011.

‘That’s why we have required all foundation trusts to submit a “downside” forecast for 2011-2012 to us by the end of September. These will outline what their financial plans could look like given a more pessimistic view on funding,’ he said.

Mr Hay added: ‘As funding begins to tighten, areas of financial and operational weakness may start to appear in some trusts. Boards should be scrutinising plans and ensuring these reflect the possible future financial environment.’

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