Trusts seeking to apply for assessment as an advanced foundation trust will need to have the support of the ICB and NHS England regional system leaders, guidance has said.
NHS England guidance for advanced foundation trust programme applicants, which is under consultation until 11 January, details how trusts can apply for this status alongside what ‘freedoms and flexibilities’ will be awarded to them if they become one.
It sets out three ‘fundamental questions’ trusts will be assessed against. These are:
- Is the trust well led, collaborating with system partners to improve population health and tackle inequalities, and responsive to local communities?
- Does the trust provide high-quality services with robust quality governance in place?
- Is the trust financially sustainable with a focus on productivity improvement?
Trusts will need to supply statements of support from their ICBs and have a medium-term financial plan agreed with their ICB and NHS England region to apply.
The guidance said: ‘Trusts seeking to apply for assessment as an advanced foundation trust will need to demonstrate that their application is supported by their local ICB(s) and NHS England region system leaders.’
It comes as the first eight trusts nominated for assessment have been published. These include:
- Berkshire Healthcare NHS Foundation Trust
- Dorset Healthcare University NHS Foundation Trust
- Central London Community Healthcare NHS Trust
- Northamptonshire Healthcare NHS Foundation Trust
- Northumbria Healthcare NHS Foundation Trust
- Alder Hey Children’s NHS Foundation Trust
- Norfolk Community Health and Care NHS Trust
- Cambridgeshire Community Services NHS Trust
Once trusts are named as advanced foundation trusts, they will be given strategic and operational autonomy, a ‘capability based regulatory approach’ from NHS England, and greater financial flexibility.
Within this financial flexibility, advanced foundation trusts will be able to reinvest any surplus in capital projects and more ‘revenue flexibility’.
The capability-based regulatory approach meanwhile will give trusts more time to address performance issues.
On financial flexibilities, advanced foundation trusts will benefit from:
- Capital flexibility: the ability to retain and reinvest aggregate revenue department expenditure limit (RDEL) surplus (excluding any Deficit Support Funding) accumulated since 2024/25 in future capital projects.
- Capital autonomy: this will be supported by greater capital autonomy for all NHS Oversight Framework (NOF) segment 1 and 2 trusts, with no need for business case approval for up to £100m capital department expenditure limit (CDEL) spend, where trusts are using their own operational capital, and/or capital flexibility.
- Revenue flexibility: revenue flexibilities limited to non-recurrent spending to support implementation costs linked to capital investment and transformation. As with capital, this will allow the reinvestment of aggregate RDEL surpluses, excluding deficit support, accumulated since 2024/25, subject to the provider having corresponding cash reserves.
IHO contracts
The guidance added that advanced foundation trusts could also play more of a ‘substantial leadership role’ locally and nationally, which could mean taking on integrated health organisation (IHO) contracts.
In an Annex guidance document, NHS England said the new IHO model is to be a contract-based delivery mechanism, and not a new organisation. Those who have the contracts will hold capitated budgets for a defined population.
ICBs are to commission these where it is determined to be the ‘right solution’.
It said: ‘The IHO model is a contract-based delivery mechanism, not a new type of organisation. IHO contract holders will hold capitated budgets for a defined population, commissioned by their ICB where the ICB determines it to be the right solution for local transformation and allocative efficiency.
‘IHO contract holders will not be expected to provide all services under the scope of the contract and so will need to work with a wider network of providers to deliver services; this might include sub-contracting arrangements or some delegation of commissioning responsibilities.’
The document added that IHO contract holders would work with single and multi-neighbourhood contract providers ‘to deliver new models of neighbourhood-based care’.
‘The defining characteristic of an IHO contract holder is taking on responsibility for improving outcomes for a defined population,’ it said. ‘This is a shift from pathway and patient to population focus. Therefore, the capabilities required to hold an IHO contract will be additional to those required to be a high-performing trust. Trusts seeking IHO designation will need to meet additional criteria.’
The guidance added that the IHO model would evolve, with those made IHOs in 2026 set to work with NHS England and commissioners to develop the model into 2026/27. It added the first contracts would be awarded in 2027.
‘For trusts undergoing designation in 2026/27, the assessment will support a developmental understanding of what will be required to work towards mature IHO arrangements, while also looking for evidence of leadership capability and a step change towards population health and system benefits,’ it said.
‘There may be areas tested in greater detail as part of the contract assurance process depending on the maturity of the initial plans and in support of this co-development phase. We plan to revise the assessment criteria following the development of the first IHO contracts to ensure early learnings are incorporated as the model evolves.’
On the release of the eight trusts nominated as advanced foundation trusts, health secretary Wes Streeting said that ‘good leadership in the NHS has never mattered more’.
‘Under our plans, if trusts manage their finances well, innovate and deliver for patients, we will give them the space to lead,’ he said.
‘These reforms mark a fundamental shift from command and control to collaboration and confidence.’
Matthew Taylor, chief executive of NHS Confederation, said he ‘welcomed’ the news of empowering local leaders to deliver change.
‘Allowing the highest-performing NHS trusts to become ‘advanced foundation trusts’ will enable them to deliver faster, more personalised care to patients – an important step toward introducing the first integrated health organisations (IHOs) as part of shifting more services from hospitals into the community,’ he said.
‘Enabling NHS organisations to make decisions locally is the most effective way to drive reform, improve care, and deliver better value for money. Collaboration between providers will be essential to achieving this.
‘But while new foundation trusts will clearly have further flexibility and financial freedoms, this should not be the limit of the ambition. We hope that more capital funding will be provided in the forthcoming Autumn Budget to modernise NHS buildings and equipment so that safe, efficient and high-quality care can be delivered to patients and that all trusts can be empowered to spend money in a timely and efficient manner.’
Earlier this month it was revealed that ICBs must ‘increasingly look beyond’ traditional healthcare providers in their role as strategic commissioners.
It comes as deadlines have also been set for ICBs to submit their five-year plans to deliver the ambitions of the 10 year plan.
Within its Medium term planning framework, NHS England said ICBs will be expected to make their first submissions, which will include a three-year plan, before Christmas. Full five-year plan submissions will then be due in early February, with sign off expected in March.
